The Federal Budget handed down by Treasurer Josh Frydenberg last night focused on delivering Australia’s plan for a stronger future. Avocado recently outlined a Budget wish list of IT measures in support of a thriving digital and technological future. We are pleased to see that many of these measures were included in the budget. Most notably: incentives for digital transformation for small business; initiatives that encourage women in STEM and importantly, a focus on the digital economy and key digital infrastructure.
In this article, we outline the key measures for measures for a strong digital and technology economy, with insights from our CEO, Gerardo Barranquero on what this means for the IT sector and wider economy.
Technology Investment Boost and a Skills and Training Boost for small business.
Small businesses will now be able to invest more in their digital footprint with the government announcing $1.6 billion in tax relief measures. The Technology Investment Boost and a Skills and Training Boost starts immediately and incentivises to spend on modernising their infrastructure with cloud and cyber services headlining.
The Technology Investment Boost is for small businesses, with aggregated annual turnover less than $50 million. They will be able to deduct a bonus 20 per cent of the cost of business expenses and depreciating assets that support digital uptake up to $100,000 of expenditure per year. Eligible expenditure includes items such as portable payment devices, cyber security systems and subscriptions to cloud-based services.
Frydenberg said, “From tonight, every hundred dollars these small businesses spend on digital technologies like cloud computing, e-invoicing, cybersecurity and web design will see them get a $120 tax deduction.”
The Skills Training Boost covers spending on training incurred by eligible businesses up until 30 June 2024. There is no limit on how much they can spend on training courses however, there are conditions which small business should understand such as who can be trained and the type of eligible training.
Overall, this ‘boost’ is aimed at encouraging small businesses to invest more in digital products, ultimately strengthening their business confidence and accelerating their digital transformation.
Avocado Consulting CEO Gerardo Barranquero says, “This measure will provide transformational change to business, and the wider economy. For businesses like Avocado that are moving all operations to the cloud and invests heavily on staff training, these measures are a welcome announcement.”
“Businesses should take advantage of this short-term incentive, to plan their longer-term roadmap by adopting modern solutions for their sector and upskilling their staff to support the new virtual, digital, technological world in which we operate.”
Additional funding to encourage women to consider careers in manufacturing and the technology workforce.
It’s always great to see funding that supports the pursuit of women in tech. While a smaller piece of the Budget pie, a still significant $3.9 million over two years will ‘support women to pursue career opportunities in Australia’s growing tech workforce’.
Gerardo says, “With Avocado Consulting management made up of 60% women we are very proud of our record and continued support of women in IT.”
Continued investment in the Digital Economy Strategy to position Australia as a top 10 digital economy and society by 2030
An exciting initiative that will impact Australian businesses and consumers is the continued investment in the Consumer Data Right (CDR).
In the Budget announcement, the Government has committed $38.4 million over 3 years from 2022-23, and $12.6 million per year ongoing from 2025-26 to implement the Government’s response to the Inquiry into the Future Directions for the Consumer Data Right (CDR). This additional funding builds on the existing over $254 million investment to develop and accelerate the rollout of the CDR scheme.
With Treasury already consulting to expand the consumer data right from banking, energy and telecommunications to further sectors including non-bank lending, insurance, superannuation and payments data, Avocado supports continued funding into the Consumer Data Right and Open Finance, which will boost competition, innovation and give more power to consumers.
“At the heart of CDR and Open Finance is data. The use of this data is boundless, and we are excited to work with clients that extract value from this data by mining, refining, analysing and displaying it across all levels of an organisation. It helps them give their customers more control, while providing more personalised products and services and redefining the consumer experience,” says Gerardo.
Other Digital Economy funding
- The Government announced $30 million for the Digital Transformation Agency to continue the centralisation of their networks through cyber hubs to protect Commonwealth-held information, including data on citizens and other government clients, with the hubs strengthening cyber monitoring, detection and response capability across government.
- The Digital Transformation Agency has also received $1.8 million in continued support of the development of the digital identity system and legislation.
- $18.6 million over four years (and $3.2 million per year over the forward estimates) to “shape global critical and emerging technology standards”
- $13.6 million over four years to “continue the Office of Future Transport Technology and support the digitisation of the transport sector”
- $4.8 million to continue the Digital Technology Taskforce for a further two years
- Funding for the Department of Industry, Science, Energy and Resources to invest in Australia’s quantum computing industry.
Enhancing the offensive and defensive cyber and intelligence capabilities
With increasing threats, the Government is addressing cyber-attacks by enhancing the offensive and defensive cyber and intelligence capabilities of the Australian Signals Directorate (ASD). The government will provide $9.9 billion over 10 years to deliver a Resilience, Effects, Defence, Space, Intelligence, Cyber and Enablers (REDSPICE) package. Gerardo says, “The government’s investment in cyber and intelligence capabilities is critical to protect our citizens, our businesses and our most sensitive data.”
“As Australia and the world continues to become digitally centric and connected economies, we must also take pragmatic and proactive steps towards defending from Cyber threats. Avocado’s Monitoring Practice currently works with some of the government’s largest agencies and welcomes this boost in funding.”
Want to know more on how to start your digital journey? Avocado Consulting is a professional services company supporting Australia’s largest corporate entities and government agencies on their IT initiatives. If you would like to know more about how Avocado can help you, contact us.