11 May 2021

The Digital Economy

This article was written by Jane Ma. 

This year’s budget is a landmark investment in Australia’s digital future. A modern digital economy is key to securing Australia’s economic recovery from COVID-19 and Australia’s future. The Digital Economy Strategy targets investments that will underpin improvements in jobs, productivity and make Australia’s economy more resilient and globally competitive.

The Government will invest $1.2 billion over six years from 2021-22 in Australia’s digital future through its Digital Economy Strategy, to support Australia’s future as a modern and leading digital economy and society by 2030.

The strategy targets investment in emerging technologies including development of artificial intelligence technology and aviation technologies, encouraging business investment via tax incentives, digital skills training, enhancing Government service delivery, helping small and medium businesses digitise their processes and enhancing the value of electronic invoicing.

The key initiatives under the Digital Economy Strategy are:

  • Tax investment incentives to empower businesses to invest in digital technologies and support business growth, including tax incentives by:
    • investing $18.8 million to provide a refundable digital games tax offset of 30 per cent which will be available from 1 July 2022 for qualifying Australian games expenditure to eligible businesses, similar to existing offsets for films, with the Government to consult further on its design, scope and implementation. Initial details include that the maximum offset a developer will be able to claim in each year is $20 million, the game must not have gambling elements to qualify and a minimum of $500,000 qualifying expenditure needs to have been spent on the game; and
    • allowing taxpayers to self-assess the effective life of certain depreciating intangible assets such as patents, registered designs, copyrights and in-house software for tax purposes (rather than being required to use the effective life currently prescribed by statute) – under this measure which commences from 1 July 2022, taxpayers will be able to bring deductions forward if they self-assess the assets as having a shorter effective life to the statutory life, in many cases allowing matching to accounting effective lives.
  • Reviewing the venture capital tax concessions to ensure that incentives are provided to invest in start-ups.
  • Strengthening cyber security, safety and trust via the following new investments and initiatives:
    • $31.7 million to enhance the security of Australia's mobile networks and accelerate the commercialisation of sovereign network and data security solutions;
    • $18.8 million to pilot Cyber Hubs to improve resilience and cyber security maturity of government agencies;
    • $2.8 million to strengthen Australia's national system of identity settings; and
    • $1.8 million to deliver a National Data Security Action Plan.
  • Enhancing Australia’s capability in Artificial Intelligence (“AI”) with initiatives to drive adoption of AI across the economy by:
    • investing $53.8 million to create the National Artificial Intelligence Centre led by the CSIRO and four AI and Digital Capability Centres that will drive business adoption of AI technologies by coordinating Australia's AI expertise and capabilities;
    • providing $33.7 million to provide grants to support Australian businesses to partner with government to pilot projects for AI‑based solutions to national challenges;
    • investing $24.7 million in the skills of the future by establishing the Next Generation AI Graduates Program to attract and train AI specialists through national scholarships; and
    • providing $12 million to catalyse the AI opportunity in our regions by co-funding up to 36 competitive grants to develop AI solutions that address local or regional problems.
  • Supporting emerging aviation technologies by delivering:
    • $32.6 million for an Emerging Aviation Technology Partnerships program to support the use of emerging aviation technologies benefitting regional economies and communities;
    • $1.6 million to establish the New Drone Rule Management System to support the automated management of Commonwealth and state drone regulations; and
    • $1.5 million to support the development of the National Drone Detection Network to manage drone security risks and support future automated regulatory enforcement.
  • Unlocking the value of data in the digital economy and setting the standards for the next generation of data management, with initiatives including:
    • $111.3 million to support the acceleration of the Consumer Data Right rollout in banking, energy and telecommunications, giving Australians greater access to and control over their data;
    • $40.2 million to deliver the Digital Atlas of Australia;
    • $16.5 million for a pilot program to make the Australian Government's data assets discoverable and support whole-of-economy reuse; and
    • an Australian Data Strategy to create a data-driven economy through better data use.
  • Supporting digital skills for Australians in a modern economy including a new pilot program for work based digital cadetships and scholarships for emerging technology graduates, by committing:
    • $43.8 million for the Expansion of Cyber Security Skills Partnership Innovation Fund to fund additional innovative projects to quickly improve the quality and quantity of cyber security professionals in Australia;
    • $22.6 million for Next Generation Emerging Technology Graduates Program that will provide up to 234 competitive national scholarships in emerging technologies;
    • $16.4 million for the Peri-Urban Mobile Program to improve mobile phone connectivity in the bushfire prone areas of the peri-urban fringe of Australia's major cities;
    • $10.7 million for the Digital Skills Cadetship Trial to deliver work-based learning opportunities for in-demand digital jobs which offers a flexible way for workers to build digital skills; and
    • $7.7 million for the Australian Competition and Consumer Commission to continue and extend the Measuring Broadband Australia program.
  • Enhancing Government service delivery by committing:
    • $421.6 million to continue the My Health Record system and funding for the Australian Digital Health Agency, including for the Intergovernmental Agreement on National Digital Health;
    • $200.1 million to enhance the myGov online portal to deliver a simpler and more tailored experience for Australians based on their preferences and interactions;
    • $10.0 million for the Digital Transformation Agency to support the delivery of the Government's Digital transformation priorities; and
    • $3.2 million to extend the Digital Technology Taskforce until 30 June 2022 to support implementation of the Digital Economy Strategy.
  • Helping small and medium businesses by committing:
    • $15.3 million to promote and accelerate the adoption of e-invoicing by businesses and across all levels of Government; and
    • $12.7 million to help Australian small businesses build their digital capabilities through the expansion of the Digital Solutions – Australian Small Business Advisory Services program.

 

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