ICT bodies give budget partial tick

The federal budget has received a mixed reaction from Australia's peak ICT bodies.The Australian Computer Society (ACS) expressed its disappointment on the lack of "any significant new funding" for ICT initiatives, adding it would soon be following up several issues with the government.

The federal budget has received a mixed reaction from Australia's peak ICT bodies.

The Australian Computer Society (ACS) expressed its disappointment on the lack of "any significant new funding" for ICT initiatives, adding it would soon be following up several issues with the government.

ACS president Edward Mandla said the body was pushing for the government to consider allowing its departments to invest around 0.5 percent of their technology acquisition budgets in pilot installations of Australian innovations.

This, Mandla said, would allow innovations to be "fully developed" and small-to-medium enterprises to "gain real, practical experience" in implementing their innovation.

The ACS welcomed a proposed review of the venture capital industry, but wanted "close consultation with the ICT sector" as part of the review process.

"Venture capital in Australia for the ICT sector is currently too risk averse and more likely to fund those who don't really need money than those who do," he said.

Mandla added that most of the ideas from the industry come from employed technical people implementing systems in large environments whose own companies are "too rigid" to develop the solution.

"We have excellent programs; what we don't have is a pipeline of exciting technology companies. So many industry professionals express a desire to do creative work and we need to develop opportunities for them," he said.

Australian Information Industry Association (AIIA) general manager for strategy policy services, James McAdam, said they shared the ACS' support of the venture capital review.

"The AIIA views access to capital is a key issue to a growing Australian ICT industry. Any move on how to operate and make it more competitive compared to the rest of world is good," McAdam said.

As for tax reform, Mandla said it was a "welcome relief that many computer professionals will move below the highest tax bracket for the first time in years."

"We encourage the government to continue with tax reform to help the brain drain of Australian ICT professionals. To increase participation rates in our industry, we must ensure that we do not lose our best and brightest solely to the lure of lower tax regimes.

"Multinational CEOs often say the reward for setting up Asia Pacific headquarters or R&D facilities in Australia is a payroll tax bill. Our industry is labour intensive and pays a disproportionate amount of payroll tax. We encourage the government to continue to battle with State governments over taxes and charges, which reduce competitiveness and employment opportunities in Australia," he said.

The AIIA also welcomed the changes to tax legislation which allow companies to write off against local income losses they make while developing their business overseas.

"Losses incurred [offshore used to have] no tax relief. This is something we whole-heartedly welcome," he said.

On the negative side, the AIIA said there should be some initiatives which encourage companies to export more.

"We think there could have been things done in promoting Australia as an investment market. There is not a lot in there about relief to encourage individuals to invest in high risk undertakings. There is not much encouragement in getting investors to invest in higher risk alternatives," he said.

The ACS is continuing to push for the Work/Life policy incorporated in their proposal to the government in March. Mandla said the government should consider tax deductibility for child care, savings incentives for a choice of up to 12 months parental leave and removal of fringe benefits tax on gyms and health clubs.

"The ICT industry can no longer afford to lose professionals due to a lack of flexibility in the work place and the high costs of balancing work and life, particularly when our industry provides the technology for more flexible work arrangements," he said.

The ACS also applauded the government's focus on broadband blackspots but reminded the government that 256Kbp/s ADSL is "not true broadband".

Mandla said Australia is being left behind in terms of broadband penetration and that the country is in "25th place" compared to the rest of the world.

"We believe the challenge for the government is to look at how we can be a leader in broadband and not just a subsidy provider to Telstra. The ACS supports the idea of National Senators Fiona Nash and Barnaby Joyce that AU$7 billion of the AU$33.8 billion Telstra proceeds should be spent on a national fibre network. We don't see this as taking AU$7 billion away from the future fund; this is an investment that will provide huge returns," Mandla said.

The ACS will soon be presenting a number of recommendations on Technology Innovation to the House of Representatives Science and Innovation Committee.