On Tuesday night, the Australian Government handed down the 2022/23 Federal budget.
In our full Federal Budget Report, we reflected on the fact that Australia remains a ‘lucky’ country in having a stable political environment, vast natural resources and low unemployment. The challenge for the Government will be capitalising on those advantages and being able to smooth short term issues while still ensuring long term prosperity.
Will the strategic digital initiatives provide an opportunity for longer term prosperity?
The previous two Budgets announced a comprehensive 2020 Cyber Security Strategy and 2021 Digital Economy Strategy – both landmark investments into Australia’s digital future. This year, the Government is further enhancing those strategies by investing in data sharing, protection from cyber threats, growing Australia’s space sector and further increasing its investment into supporting small businesses and regional areas.
Data and cyber threats
The Budget demonstrates further recognition from the Government that investment into data use and sharing, and protection from cyber threats, is critical to Australia’s digital future. Key measures include:
- $38.4 million over 3 years from 2022-23, and $12.6 million per year ongoing from 2025-26, to implement and accelerate the Government’s response to the Inquiry into the Future Directions for the Consumer Data Right. This Inquiry details how enhancements in the Consumer Data Right can make our digital economy more effective, inclusive and safer for use by Australian consumers, and develop an innovative, productive and competitive data ecosystem (see further KWM insights here and here);
- $9.9 billion over 10 years to deliver a Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers (REDSPICE) package, designed to enhance the Australian Signals Directorate cyber and intelligence capabilities (although we note that only approximately $600 million will be spent in the first four years). The commitment is also designed to strengthen Australia’s international partnerships such as the AUKUS trilateral security partnership with the United Kingdom and United States. AUKUS’s priorities include cyber capabilities, artificial intelligence, quantum technologies and undersea capabilities.
Supporting small business growth, regional telecommunications and manufacturing capability
The Government has announced a Technology Investment Boost and a Skills and Training Boost – both designed to support small businesses to digitise and upskill their employees. From 29 March 2022 to 30 June 2023, businesses with an aggregated annual turnover of less than $50 million will be able to deduct a bonus 20% for the cost of external training courses, business expenses and depreciating assets that support digital uptake. This is expected to provide $1 billion in tax relief and support investment into cloud computing, cyber security, accounting and e-invoicing software and website design.
The Government will also invest $1.3 billion into enhancing connectivity in regional Australia. Key measures include:
- a new $811.8 million Connecting Regional Australia initiative to rectify mobile blackspots along key transport routes, improve the resilience of telco infrastructure against natural disasters, and encourage new technology trials; and
- $480 million to upgrade NBN Co’s Fixed Wireless Network and enhance satellite service, improving connectivity for up to 1 million households and businesses.
The Government is also investing a further $328.3 million into the Modern Manufacturing Strategy, to enable small to medium manufacturers to harness new technologies and innovate their manufacturing processes.
Growing Australia’s space sector
The Government has already announced that it will provide $1.3 billion from 2021-22 (and $38.8 million per year ongoing) to prioritise the growth of Australia’s space sector and space manufacturing industry. This includes:
- $1.2 billion to establish a National Space Mission for Earth Observation to access key earth observation data streams, build Australia’s sovereign capability and enter agreements with international partners to procure and operate Australian Satellite Cross-Calibration Radiometer satellite;
- $65.7 million over 5 years to set the conditions for rocket launch from Australia and fast-track Australian research projects and the launch of space assets; and
- other funds to clarify future funding opportunities, align Australia’s space efforts and continue building relationships with internal space agencies.