Kitty Bare for ICT in Current Federal Budget

Kitty Bare for ICT in Current Federal Budget

There are some excellent initiatives in this budget, particularly in the industry statement, but the government has failed to grasp the nettle when it comes to support for Australia's transition to a knowledge economy

While there were plenty of cash handouts for everyone from the elderly to apprentices in the federal Budget, there was very little in the way of new money for ICT.

According to the Australian Internet Industry Association's (AIIA) CEO, Sheryle Moon, there are some excellent initiatives in this Budget, particularly in the industry statement, but the government has failed to grasp the nettle when it comes to support for Australia's transition to a knowledge economy.

"In the Treasurer's speech last night he highlighted the fact that Australia has now recorded the longest economic expansion in its history. Government has acknowledged that our productivity growth in particular has been underpinned by the application of technology by industry right across our economy," Moon said.

"Yet if we look at the budget for the Department of Communications, Information Technology and the Arts (DCITA) there is little in the way of new money to allow the ICT industry to grow rapidly and to continue to play its role in supporting productivity growth. "There is almost nothing in terms of support in this budget for the development of infrastructure, particularly broadband, which will underpin Australia's economy in the post-resources boom era."

Moon went on to highlight the positives in the industry statement which would have significant flow-through for the ICT industry. Changes to the beneficial ownership test for the 175 per cent premium R&D tax concession which will allow claims for R&D projects undertaken in Australia - regardless of where the intellectual property is held - will encourage investment in local research by ICT multinationals.

"This is an issue which AIIA has raised in the past and we are pleased that this Budget makes the necessary changes to encourage foreign investment in Australian ICT R&D," Moon said.

"We are also pleased with the government's ongoing commitment to business skills for entrepreneurs. If we want to have more companies with the necessary scale to export then we must ensure that management has more than just the necessary technology skills but that they have the necessary business skills."

Moon said that AIIA was also fully supportive of the technology transfer concept and was encouraged by the funding in the industry statement to support export projects.

The Budget also contained funding for an additional 5000 skilled migrants coupled with $85 million to maintain the integrity of the skilled migration program.

"The flexibility to supplement the workforce with skilled migrants is important when the ICT labour market is so tight. We want to ensure, however, that all ICT employers are meeting their sponsorship obligations, and the additional $85 million will assist with that," Moon said.

"Australia's ICT industry is worth 4.6 per cent of GDP - or as much as six percent if we consider software produced for in-house use. "AIIA has a number of items on its 'election year' wish-list, and looks forward to working with both sides of politics in the months ahead to ensure that policies and programs are developed which help the ICT industry - a key enabler of productivity across the economy - to grow."

The 2007/08 Budget provides for an underlying cash surplus of $10.6 billion, the government's tenth surplus.

All taxpayers will benefit from a further $31.5 billion in tax cuts over the next four years.

This includes $5 billion which will be invested in a new Higher Education Endowment Fund to provide a perpetual source of funding for university capital works and research facilities. Additionally, a further $3.5 billion of additional funding will be made available for education and training.

Some of the ICT initiatives announced last night include $3.4 million over the next four years to support organizations wishing to represent the interests of consumers or conduct research into telecommunications issues through the Telecommunications Consumer Representation and Research Grants program. Grants are made available to consumer bodies and researchers following competitive application-based selection processes.

The federal government will provide $13.6 million over four years to help protect Australians from sophisticated online attacks targeting their home computers and small businesses, the Minister for Communications, Information Technology and the Arts (DCITA), Senator Helen Coonan, announced.

Moreover the Do Not Call Register, which is a commitment to protect consumers from nuisance telemarketing phone calls by allowing individuals to opt-out from receiving unsolicited calls, will receive $33.1 million over four years. This will create the register, along with $15.9 million to be recovered from industry over that period.

The federal government is providing $3.1 billion for the Connect Australia telecommunications assistance package to further encourage competition, future proof services in regional areas and provide major targeted funding assistance.

"Connect Australia will provide many opportunities for both industry and regional, rural and remote communities," according to Senator Coonan. "It will give Australians access to better telecommunications services, help revitalise community economies, allow more people to work remotely or from home, and encourage small businesses."

The Connect Australia programs will roll out broadband to people living in regional, rural and remote areas, extend mobile phone coverage, build new regional communications networks and set up vital telecommunications services for remote Indigenous communities. The programs are Broadband Connect ($878 million), Clever Networks ($113.4 million to rollout innovative networks for new applications to improve the delivery of health, education and other essential services).

A further $29.5 million has been made available for Mobile Connect, to extend terrestrial mobile coverage and continue satellite handset subsidies for more remote areas. This is in addition to Backing Indigenous Ability ($89.9 million to deliver a package addressing phones, Internet and videoconferencing in remote Indigenous communities).

"The $2 billion Communications Fund will deliver an income stream to fund government responses to the recommendations of future legislated reviews into regional telecommunications," Coonan said.

The first regular review will commence before the end of 2008.

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