Technology sector leaders have lambasted the lack of investment in the federal budget, labelling it a missed opportunity to enhance competitiveness and productivity.
Australian technology leaders have lambasted the lack of tech investment in the federal budget, labelling it a missed opportunity to enhance competitiveness amidst global trade volatility and a domestic productivity decline.
Treasurer Jim Chalmers handed down his fourth budget yesterday, with cost-of-living measures including enhanced tax cuts headlining government’s the pre-election pledges.
Noticeably absent was any new funding for tech – particularly in the AI and startup space – which several industry leaders have labelled a missed opportunity.
StartupWA chair Charlie Gunningham said the budget had left many in the sector fearful for what the future would bring.
“This was obviously, with a few weeks to go to the election, not about looking to the years ahead – but rather the weeks ahead,” he said.
“Nothing looking forward, nothing looking at the innovation, startup, early stage ecosystem. In fact, they're saying that there's going to be less money spent on the R&D Tax Incentive, and there's going to be a big R&D tax review.”
No explicit changes to the Research and Development Tax Incentive scheme were announced in the federal budget, however, budget papers note payments related to the R&D incentive program were expected to decrease by $640.6 million in the years to 2028-29.
“The R&D tax incentive has been probably the biggest funding of early stage startups for the past twenty years. It has helped countless now large businesses stay alive during the early stages,” Mr Gunningham said.
The Tech Council of Australia shared Mr Gunningham’s sentiments, with a spokesperson saying the council – the peak body for Australian tech companies – was disappointed by the budget.
“This is a missed opportunity to build our national competitiveness at a time of domestic productivity decline, and of critical global trade volatility,” the spokesperson said.
“We encourage the government and the opposition to formalise their support of our Tech Investment Target: to expand both R&D investment and technology adoption to comprise 4.6 per cent of Australia’s share of GDP within the next decade.”
Australian Computer Society chief executive Josh Griggs said tax cuts announced in the budget would help attract the international talent the sector was so desperate for.
“As the Australian digital economy grows, ensuring ICT professionals are fairly supported financially is critical. These measures will enable tech professionals to invest more in their careers, upskill, and contribute to Australia’s growing technology sector,” he said.
“However, ACS is concerned the nation is not positioning itself to take advantage of the major changes artificial intelligence offers to the economy.
“We would like to see greater government investment and incentives for the private sector that would see increased funding for developing skills, investing in local data centres, boosting AI sovereignty, and bolstering Australia’s cyber security readiness, particularly in the small to medium enterprise sector.”
Anisha Sinha, co-founder of online small business insurer UpCover, said Australia risked falling behind other developed nations.
“Australia has delivered a budget that does not mention AI once,” he said.
“While this isn’t the first time this has happened, it is now becoming increasingly unusual as other major global governments and funds prepare to spend billions on securing a foothold with this new technology.”
Mr Sinha said he welcomed funding for cyber security, although said it didn’t go far enough.
“When you do some napkin maths, the federal government committed roughly twenty dollars per business towards protecting them,” he said.
“Considering the hardship faced by a breach, and the impact (a cyber breach) can have on a business this hardly seems appropriate.
“That, in itself, sets the tone for a federal budget that has so little to say about technology, that any sparse mention of a policy becomes a focal point."
Chief executive of car rental subscription service Carbar Des Hang said Australians may be better off becoming a zookeeper in Australia than a startup founder.
“The federal budget found funds for pandas in Adelaide, but many of the big-ticket startup-impacting items flagged ahead of the budget, like a re-examination of R&D tax incentives, were given a firm swerve,” he said.
“In their place, we got reform to encourage overseas investment into business; albeit via yet another new committee.
“It's getting harder and harder to see how the federal budget will genuinely impact founders or anyone planning to innovate in Australia. Perhaps this is the goal? But it’s an alarming trend with state government’s nationally not being in a fantastic position to pick up the slack. “
