How did tech fare in the budget?

In our Pre-Budget submission, Professionals Australia flagged the IT sector as a key driver for rebuilding a competitive Australian economy and called for upskilling and reskilling of Australia's tech workforce and a plan to support digital adoption and transformation.

The 6 October Budget announced a range of measures to support the IT sector.

The Government has committed $2 billion to Australian R&D through a series of tax incentives. It has committed to better targeting of the R&D tax incentive and dropped proposed cuts to the scheme with the changes to the R&D tax offset reversed. From 2021 small companies – businesses with less than $20m turnover – will see an increase in the offset with no cap on annual cash refunds and larger companies will see a streamlined intensity test and the cap on eligible R&D expenditure lifted from $100m to $150m.

The Federal Government has also updated the previously announced cybersecurity plan, pushing spending to $1.7b, $350m more than the amount announced in June. The $1.7 billion for Cybersecurity over the next decade includes $1.4 billion to enhance the capabilities of the Australian Signals Directorate and Cyber Security Centre - $366.7 million over the forward estimates to the Australian Signals Directorate and $470 million investment in the cyber security workforce, with the creation of over 500 new jobs in the ASD.

As part of the Budget, the Government has announced 50,000 new higher education short courses which include IT subjects. Alongside this, the Budget included funding for $240m to support female cadetships and apprenticeships in science, technology, engineering and mathematics – an initiative that may assist with increasing supply in an effort to address the under-representation of women in the tech workforce. In addition, the 6 October Budget included the following commitments:
  • $800 million Digital Business Plan is targeted at building Australia’s digital transformation to drive productivity growth, encourage innovation and create jobs and to boost the digital capacity of businesses and promote the adoption of new technologies;
  • $26.2 million to enable small businesses to access the benefits of digital technology and to look after themselves and their businesses as they manage the stress of the COVID-19 crisis; FBT exemptions for reskilling or retraining workers facing redundancy.
Professionals Australia welcomed the Government's recognition of the key relationship between Australia's digital economy and rebuilding after the pandemic, the innovation stimulus outlined in the Budget and the commitment to investing in digital skills development for tech workforce in the form of FBT exemptions for reskilling or retraining workers facing redundancy. We are still concerned about the lack of a clear plan for technology skills development in the key emerging areas of cybersecurity, AI, machine learning and cloud computing.

We also see problems with solely relying on increasing the supply of qualified women to the tech workforce as a solution to the under-representation of women – we think it is just as critical to address the factors that contribute to the attrition of women from the IT workforce.

We also see a strong need to look at the complex issues around skills gaps including ensuring strong commencements and completions for undergrad and post-graduate IT courses, that there are sufficient incentives to hire graduates from Australian IT courses, that uni IT courses are aligned with industry needs and addressing the underpayment and exploitation of skilled migrants and IT workers hired under temporary visas.