The Australian Government handed down its 2021/22 budget on Tuesday evening. Building on their previously announced $1.67 billion Cyber Security Strategy, Australian Treasurer Josh Frydenberg outlined a new Digital Economy Strategy on budget night.
“We are investing $1.2 billion in our digital economy strategy,” said Mr Frydenberg. The Treasurer noted building and protecting digital infrastructure will increase economic competitiveness and fuel growth. He says cybersecurity is integral to that.
The 2021/22 Australian budget provides funding to improve standards for trusted identities that underpins the digital environment, sets up a National Data Security Action Plan to strengthen Australia’s data security settings, and funds pilot cyber hubs to improve the resilience and cybersecurity maturity of government agencies.
According to the Australian Government, trusted digital identities could unlock $11 billion per annum by reducing service costs, fraud costs and improving customer experiences.
“The Australian Government will work with states and territories to promote consistent national identity standards, prevent the misuse of duplicate and fraudulent identity credentials and make it easier for people to keep their personal information up to date.
“The Government is developing identity protection and restoration initiatives to help support Australians who engage online and to help detect the use of fraudulent documents.”
As part of this, the Australian Government will spend $200 million to improve the myGov website and $301 million on the My Health Record online platform. $111.3 million will be allocated to the Consumer Data Rights rollout.
Also receiving funding are initiatives to make it easier for foreign nationals and companies to prove their identity and do business in Australia. The Government says this sits alongside the Digital Identity system. Under this program, Australians can create a single, secure digital identity that they can use across multiple services.
New and existing measures will be brought together to create a National Data Security Action Plan. The Government calls this a “comprehensive approach to data security.” Saying the Action Plan should give Australian’s confidence when it comes to Government handling their personal data, the Government used budget night to lay out a roadmap for its implementation.
“The first priority of the Action Plan will be to ensure Australia’s control of sensitive data holdings by ensuring robust security settings for Australian Government data, building on initiatives such as the Government’s Hosting Strategy, and the Protecting Critical Infrastructure and Systems of National Significance reforms.”
The Departments of Defence and Home Affairs and Services Australia will provide pilot hubs to boost the Australian Government’s cybersecurity defences and better protect against malicious attacks. The Treasurer allocated $50 million on budget night to these cybersecurity measures.
“These pilot Cyber Hubs will provide standardised core services for the participating agencies, including cybersecurity operations centres, secure gateway and cloud services, monitoring and threat sharing.
“The pilot program will be coordinated by the Digital Transformation Agency (DTA) and draw on expertise from the Australian Cyber Security Centre (ACSC) and Attorney-General’s Department.”
Australia’s Minister for the Digital Economy, Senator Jane Hume, said the budget night funding boost represents a landmark investment in Australia’s digital future.
“Australians rightly expect the Government to keep up with them and to help chart the next step forward, and that’s exactly what we are doing with this Strategy.”
INDUSTRY COMMENTARY & FEEDBACK
Nick Ellsmore, head of Trustwave’s consultancy services and a long-time, straight speaking cybersecurity entrepreneur commented, “My initial feeling is that it’s interesting how they approach different areas with a really different model.
My initial read is that for Cyber it’s all quite Government-centric… ie: Developing Standards, Developing Plans, Funding Skills Development Programs, etc. So basically Government spending money, to try to either (a) make security better; or (b) force people to be more secure; or (c) reward people for helping.
But for “digital games” development, they introduce a 30% refundable tax offset, which is designed to stimulate others (ie businesses, maybe investors) to put their money into it. They don’t develop “digital games standards” and “digital games plans” … they just set up the tax system to reward investment in that area and let the market do its thing.
We all know that it’s the private sector who needs to do the spending here to “fix” the cybersecurity problem. So in many ways that’s what we need for cyber – we need something that encourages and drives businesses to do the spending. When it gets over-engineered, like the $2,100 grants for small business cyber security assessments (https://sb.crestaustralia.org/), it fails.”
Ian Yip, CEO of Avertro commented, “The government continues to prove that the most common way they know how to assist high-growth technology-driven businesses is through tax incentives. In addition, they seem unable to shift their perception of innovation beyond R&D that happens in a traditional science lab to be more inclusive of technology companies that innovate differently.
It is particularly curious that in his budget speech, the Treasurer announced the patent box scheme by first referencing the need to support Australian innovations like WiFi without acknowledging that because of the limited medical and biotech scope, WiFi would not be covered if the newly minted patent box scheme existed at the time.
While the budget touts $1.2 billion being allocated to our digital economy strategy, most of it will be spent on the adoption of technology instead of innovation. A better balance needs to be struck between helping Australia truly be a world-class producer of technology innovation that we consume locally and subsequently take to the world, instead of what we’ve traditionally done; be good adopters of foreign technologies resulting in Australian funds ending up in non-Australian companies.
A sliver of hope can be attached to the $33.7 million within the digital economy strategy to assist small businesses in developing AI-solutions that address national challenges. While this is a tiny amount compared to other countries that spend billions in this discipline, it’s a start and a step in the right direction.
“As expected, yesterday’s Budget, delivered little remotely actionable and useful when it comes to keeping Australian safe online. Cybersecurity was only mentioned nine times and often as a passing reference”, said Jacqueline Jayne, Security Awareness Advocate APAC at KnowBe4.
“Looking for the actionable steps or deliverable outcomes in relation to lifting the knowledge, skills and abilities of Australians to stay safe online should be the primary focus. The rhetoric is predictable year on year when it comes to cybersecurity and protecting our citizens, businesses and all organisations in our great country.
“Delivering the 2020 Cyber Security Strategy has come and gone but where are the measurable deliverables and outcomes? It would have been a delightful surprise to see an announcement and implementation of a National Cyber Awareness Education Campaign for everyone. Cybersecurity is after all everyone’s responsibility and we are far from being in a position where we are making better decisions when it comes to staying safe online.”
Carol Chris, Regional General Manager, GBG confirmed, “We cannot overlook the threat of cyber financial fraud.
This year, the government has dedicated $1.2 billion to their digital strategy, including $50 million to improve cybersecurity in the government. While both digital and cybersecurity investments are critical to keeping Australia safe and technologically competitive against our global counterparts, these investments require holistic, strategic, and measurable approaches to be effective.
For example, how cyber financial fraud is going to be managed has not been addressed in the federal budget, despite the fact that this has been a rapidly growing threat for Australians and Australian businesses, accelerated by the pandemic. Data mining through cyber attacks and leveraging advanced technology to create spoofs, synthetic IDs, and deepfakes are just some of the many ways sophisticated crime syndicates around the world are taking advantage of Australians’ growing use of digital channels, including consumers’ increasing levels of comfort with managing their finances online.
AI needs to be embedded in our approach to businesses’ digital readiness
The budget’s commitment of $53.8 million over four years to establish the National Artificial Intelligence Centre to drive AI adoption is a promising first step towards empowering Australian businesses with this evolving and valuable technology. The impact of this investment and growing availability of the technology will be measured by how well AI initiatives are embedded into industries in ways that build overall digital readiness.
For example, the financial services industry, like many others, experienced accelerated digital transformation in 2020, and is now focusing on how to build and sustain digital trust with customers. AI holds the keys to outpace fraudsters’ use of innovative methods to commit financial crimes and further accelerate financial institutions’ digital capabilities and operational efficiencies, however the industry won’t experience the true extent of these potential benefits if the AI policies in place are actioned in siloes away from the financial executives delivering everyday services to Australians.
Cyber spend without cyber standards will go nowhere
According to Neil Pollock, CEO of FirstWave Cloud Technology, “We’ve seen throughout the pandemic that a significant rise in cyber threats unfortunately does not lead to a significant rise in cyber resilience and prevention investments, particularly among small businesses. Our small businesses, which make up the lion’s share of jobs across the country, have never been more susceptible to a growing volume and range of cybersecurity attacks, from phishing to ransomware. However, it continues to be common practice for SMB owners to put cybersecurity in the ‘too hard basket’, hoping it will sort itself out. The government’s $50 million investment into cybersecurity cannot overlook this very real threat to our SMBs. We need to invest in designing, implementing, and upholding a cybersecurity standard, as they have done in countries like the UK, that empowers SMBs to address the fundamentals of cybersecurity and to keep cybercriminals at bay. Without some basic standards and best practices in place, what may seem like a lot of money to some, will simply become $50 million wasted.
It’s a positive indicator to Luke McCormack, vice president and managing director, APAC at Pega, “To see the government commit to investing over $500 million to enhancing government services is truly exciting news for Australian citizens. It shows the government is prioritising the right areas as Australians seek improved digital experiences when engaging government services.
Looking ahead, it’s important for this to be a starting point and not the finish line in enhancing government services. The best experience has to be the standard across the public sector, with Australians expecting consistency, convenience and a seamless experience, every time they engage with a government agency or department.”
Tax assistance and digitisation
- Employee share scheme reforms, a patent box tax regime to keep homegrown medical innovation in Australia, and incentives and streamlined assistance to better attract international investors and financial services providers will grow our economy
- An extension of the full expensing mechanism will continue to help Australian businesses grow themselves out of economic difficulty
- A $1.2 billion package to shore up Australia’s future as a leading digital economy and help businesses grow
PwC Chief Executive Tom Seymour has congratulated the Federal Government for delivering a budget that supports the next phase of Australia’s business-led economic recovery and positions business at the centrepoint of Australia’s return to growth.
“This is a Budget that puts business squarely in the engine room of our economic repair and recovery. Tax measures and deregulation initiatives mean businesses have the confidence they need to take risks, grow, employ more Australians and lead through innovation,” Seymour said.
“We are pleased the Federal Government has heeded calls for reforms to grow our startup and innovation industries with changes to employee share ownership rules and the introduction of a ‘patent box’ to incentivise investment in the medical and biotechnology industries.
“We know that in order to return to a consistent position of economic growth, we need to back the sectors that best drive our future economy. That’s why we’re delighted to see support for our burgeoning innovation sector and targeted incentives to attract international talent which has the potential to propel our growth to new heights.
“We are pleased to see a continued focus on deregulation as the Federal Government continues with its agenda. While regulation is important, the settings badly need a refresh so that it strikes the right balance between providing the consumer protections our nation needs, but not at an unnecessary impediment to productivity and growth.
“COVID-19 has prompted the world to fit a decade’s worth of digitisation in a few short months. Our handling of the pandemic puts us at an advantage over many parts of the world, but we can’t protect those hard-won gains without fully embracing the digital transformation. The Budget helps businesses embrace digital opportunities through a $1.2 billion package that includes upskilling, artificial intelligence capabilities, enhanced government services and through unlocking the value of data to the economy.”
Budget on business-led recovery
“This is a Budget that helps propel the nation from a state of economic rescue to a position of economic growth. We know that it’s the businesses across the nation that are critical to ensuring Australia maintains its advantage over the rest of the world to achieve this growth – and this is a Budget that helps them do just that,” said Seymour.
“2020 saw unprecedented measures designed to protect and preserve livelihoods and shield as many businesses as possible from the brunt of the pandemic, but this time around, the Federal Budget is a blueprint for sustainable and achievable economic growth – all while improving the nation’s fiscal position.
“The Budget helps address the challenge of how we progress the litany of projects in our infrastructure pipeline, and ensures we can take a longer-term and bigger picture approach to building Australia’s future. Rather than waiting to see how COVID-19 dictates our new normal, we have an opportunity to shape it.
“Perhaps most importantly of all, the Budget recognises the challenges working parents face every day juggling their dual roles. We know that what’s good for parents is invariably going to be good for our economy, thanks to increased productivity, workforce participation and household income – it makes so much sense.
“Funding to deliver aged care reforms will give Australian families a system they can count on. We believe these are essential reforms that will give more families, older Australians and their loved ones the flexibility, support and confidence they need.”
Sustainable tax measures
Tax measures announced by Federal Treasurer Josh Frydenberg in the Federal Budget will further drive our recovery and return Australia to sustained economic growth – encouraging those businesses ready to take the next step in their recovery, and supporting those who are not.
“As we recover from the pandemic and find our new normal, Australia’s great strengths as a leader in research and development, innovation and technology will become more important than ever before. We have the talent here in Australia to make big inroads in this sector, and now, we have the support needed from the tax system to grow that innovation here – and keep it here.
“The full expensing mechanism from last year’s Budget has and will continue to help Australian businesses grow themselves out of economic difficulty – it is the very hallmark of a business-led recovery. We have long called for this initiative to be extended. We’re equally pleased to see a further extension to the temporary loss carry back regime – another tool to help businesses recover.
“We know that there is enormous potential for economic growth in our financial services sector. Our competitiveness with our neighbours is critical when it comes to attracting investment in Australia. The Budget helps incentivise this investment.”
But according to PwC Australia, while now is not the time for wholesale tax reform, a broader and more substantial overhaul of Australia’s tax legislation is ultimately required to address the over-reliance on personal and corporate taxes, intergenerational inequities, a reliance on unsustainable tax bases, the misalignment between revenues and responsibilities, and tax avoidance through the cash economy.
“While it’s reasonable to hold off on wholesale tax reform while we recover from the COVID-19 economic crisis, these are conversations that have to be had,” said Seymour.
“Now is the time for our leaders to be planning these major reforms. Tax reform will become all the more important as the Government seeks to find new ways to support expenditure, improve equity and promote economic growth.”
For Ben Breen, Managing Director, Asia Pacific at Project Management Institute, “While it’s great that the Government has invested significant funds into higher education, what pleases me most is the government’s investment in non‑university higher education providers with the aim of adding an additional 5,000 Commonwealth supported short course places this year. The future of Australia relies on upskilling today’s youth for the range of jobs that they will undertake in the future. Project Management certifications and short courses are some of the best ways for Aussies to upskill for a range of jobs.”
“Extension of the HomeBuilder scheme allows construction companies an additional year to commence work on projects allocated under the grant. This demonstrates that the delivery of projects on time will be essential to unlocking the true benefit of the scheme. Ensuring the construction workforce has the project management skills, including essentials such as leadership and communication, will be vital to opening the full potential of this cash injection for the sector.”
“The additional $15.2 billion to infrastructure projects over the next ten years is great to see as it will add significant jobs across all states. However, it’s critical that the commonwealth works with the states to ensure these projects get rolled out and completed in time and within budget. When projects run over budget or exceed their timeline it erodes public trust in the state and federal government. If we want to continue rolling out critical projects, we need certified Project Managers leading these projects.”
“The Federal Government’s $60m commitment to developing a natural disaster recovery agency highlights the severe, wide-ranging impacts and cost of recent events such as bushfires, drought and floods. The significantly larger $615m grant to prepare for and reduce the risk of such disasters demonstrates the opportunity to employ project management skills to help mitigate against the impact of natural disasters in Australia.”
Geoff Coley, Director, Strategy & Architecture, Asia South and Pacific, Veritas Technologies provided, “Veritas commends the government for recognising the importance of a unified digital approach in becoming a leading digital economy, through the Digital Economy Strategy. The challenge now for businesses is to not become complacent in managing the growing risks that are associated with the exponential growth of data, and the inherent risks that come with digital data, specifically ransomware. As services continue to turn digital, businesses must tackle ransomware resiliency with the mindset of when, rather than if.”
“If the pandemic taught us anything, it showed that many of us must be more prepared when disaster strikes. It is important and worthy of praise to see the government drawing its attention to privacy and the threat of cyber security. Veritas believes that it is useful to include more funding towards packages that close the transformation and resiliency gaps in Australia. Businesses must have support in order to effectively implement ransomware resiliency plans to better protect sensitive data. The public and private sector need to work together so that businesses are better placed for quick detection, mitigation and an even quicker recovery from online threats.”
“Veritas believes that businesses that take advantage of funding from the Digital Economy Strategy will greatly benefit from the investment. But for small and medium-sized businesses, which account for half of Australia’s workforce, it is critical that effective resources are made available to help them utilise these emerging technologies and minimise the digital transformation gap.”
“Greater investment from the government in cybersecurity comes at a good time, as online breaches don’t show any signs of slowing down. The financial and reputational damage from cyber-attacks can be substantial, and often last for months or even years after the cyber-attack takes place. Veritas research shows that in the case of a ransomware attack, 32% of Australian organisations paid the full ransom and 56% paid part of the ransom to regain control of their data, which is quite significant and often in vain.”
Jason Waller, CEO of InteliCare concludes, “While the federal government announced some promising inclusions for aged care in the 2021 budget, we feel there is still a missed opportunity to do more.
80,000 new home care packages to those who need it is an excellent step in the right direction, and so is the additional $10.8 million to design and plan a new support in home care program, but there are still gaps in the deployment and speed of which these initiatives are rolled out.
We welcome the targeted growth of assistive technology, however, these changes will take time. Specifically regarding the Multi-Purposes Services program, unfortunately the opportunities for rural and regional areas have been missed and the government could have done a lot more with technology that is available right now.”
AIIA welcomes $1.2b investment in digital, but says more needs to be done to further AI and health tech sector
Australia’s peak industry representative body for innovation technology, the Australian Information Industry Association (AIIA), welcomed the Federal Government’s Budget as a good start to position Australia as a leading digital economy by 2030.
The Federal Government’s $1.2 billion investment is about securing Australia’s economic recovery in a world of continuing uncertainty. The budget is focused on improving systems across artificial intelligence (AI), health, digital skills, cyber security and digital payments for SMBs.
The federal funding allocates $124.1 million to the nation’s capability in AI aiming to ensure Australia becomes a global leader in AI research and commercialisation. While the budget allocation falls short of the $250 million required to fully fund the National AI strategy, the AIIA recognises that this investment is a significant improvement of previous funding.
Additionally, $500 million will be allocated to give consumers greater access to their health and government data via a makeover to the MyGov website and the My Health Record service. A further $100 million has been committed to the development of digital skills in the workforce, including the creation of cadetships. However, the ICT sector will continue to advocate for greater investment to achieve a globally competitive industry.
AIIA CEO, Mr Ron Gauci said: “We applaud the Federal Government’s recognition that this transformation is not merely a national one but a global one that is happening. The AIIA has been calling out our need to keep pace with the global trend. The investment of $1.2 billion is recognition of the fact that the ICT sector is at the heart of every industry and the Federal Government must continue to invest in this sector to secure our economic independence for years to come.
“We have been advocating for significant investment in health, skills, cybersecurity, digital payments and AI. Tonight’s announcement committing an investment of $124.1 million for AI shows the Federal Government’s continued commitment to ensuring Australia becomes a leading digital economy. However, in April we demonstrated that to fully fund a National AI Strategy, $250 million was needed. While investment in R&D is important, more needs to be done to ensure that there is significant investment in the commercialisation of AI here in Australia to deliver jobs and economic growth. Without it we will continue to fall behind the rest of the world.
“We have a once-in-a-lifetime opportunity to reshape the technology at the core of the Australian health system. We are pleased that the Morrison Government has taken our recommendation to implement a patent box, ensuring that business is able to receive tax incentives to ensure that IP is developed locally. It’s understandable that MedTech and BioTech are the first beneficiaries, we will work to ensure that these incentives are extended to other areas of the ICT industry.
“Now is the time to create lasting structural change as a result of setting up a strong and efficient national ICT health backbone and the investment of $500 million will go some way to bringing this to reality. The AIIA remains committed to working with the Federal Government in its COVID-19 vaccination roll out delivering integration across platforms.
“The AIIA recognises the Federal Government’s $100 million allocation towards the development of digital skills in the workforce, including the creation of cadetships. We represent the technology employers of Australia so we look forward to working with the Government to deliver its Digital Cadetship policy to ensure that people can embark on their digital careers and build skills and capability.
“With long held skills shortages in Australia’s ICT sector, the AIIA’s Skills Hub is one measure to help improve the supply of skilled Australian workers as well as mapping employee skills to career pathways and relevant training courses. The AIIA Skills Hub is in active discussions with an additional 15 universities and TAFEs as well as industry courses from leading technology companies. Once these are onboarded, the AIIA Skills Hub will exceed 5,000 courses available to members by the end of 2021.
“Australia’s ongoing prosperity depends on its ability to innovate, requiring leadership, clear policies and a national innovation strategy. As a nation, we must support our innovators and ensure Australia can retain ownership of our brilliant creations and ensure we do not fall behind our international peers,” concluded Mr Gauci.