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Federal Budget 2020-21 & The Digital Economy
24 November 2020 | Minutes to read: 4

Federal Budget 2020-21 & The Digital Economy

By Eric Flammang

Australian businesses have had to shift their mindsets and quickly adapt to changing circumstances as a result of COVID-19.

The Australian government is aware of these challenges and the utmost necessity for the nation to enact a well-rounded and proactive plan to support these businesses. This especially applies to the SMEs which are not equipped with the necessary resources to efficiently move to the digital realm on their own.

In the context of its 2020-21 budget, the government announced a four-year “Digital Business Plan”, allocating an estimated $796.5 million as part of the wider “JobMaker Plan” targeting the enhancement of the following four categories:

  • The establishment of modern digital infrastructure
  • The reduction of regulatory barriers
  • The introduction of enterprise support and capability for SMEs, and
  • An easier and electronic way to deal with the government.

Additionally, the government announced that it will:

  • Establish the “Australian Broadband Advisory Council” to assist in maximising the economic benefits of increased digital connectivity for Australian businesses and consumers
  • Allocate money to help older Australians increase their digital literacy (including $28.3 million over four years from 2020-21 to extend the existing “Be Connected Program” which supports Australians over 50 to gain the skills they need to participate in the digital economy), and
  • Fund the continued operation of the Australian Digital Health Agency (Tasked with improving health outcomes for Australians through the delivery of digital healthcare systems and the national digital health strategy).

Modern Digital Infrastructure

Over $22 million has been allocated to establish the Australian 5G Innovation Initiative, and a further $7.2 million has been specifically allocated to support the accelerated deployment of 5G infrastructure mainly through the improvement of the allocation and management of “spectrum” (the radio frequencies that carry data from user equipment (UE) to cellular base stations).

New investments of $4.5 billion are also proposed to further expand and / or upgrade the NBN.

Reduction of regulatory barriers

From a policy making point of view, the government has announced the following two funding initiatives:

  • Six million dollars over three years from 2020-21 to strengthen Australia’s role in international standard-setting and supporting businesses to early-adopt and / or apply these standards, and
  • Over $11 million to deliver a “Regtech Commercialisation Initiative” to streamline government administration and simplify regulatory compliance through the Business Research and Innovation Initiative.

Further significant amounts ($28.6m) are allocated to the implementation of the Consumer Data Right. This will give consumers greater access to, and control over, their data. In addition, this will result in the streamlining of Government administration and simplified regulatory compliance including the support for fintech start-ups. This measure will also assist with the government’s willingness to encourage foreign investment and job creation in Australia

An additional $6.9 million over two years will support industry-led pilots to demonstrate the application of blockchain technology. This is in order to reduce regulatory compliance costs and encourage broader uptake of blockchain by Australian businesses.

Notably and very helpfully for many, reforms will be made to the Corporations Act 2001 to allow meetings to be held with virtual attendance and to provide certainty that company officers can electronically execute a document. This will likely formalise, in a permanent manner, the changes quickly passed earlier this year in various States and at the Commonwealth level to allow for electronic signatures and remote witnessing.

Introduction of Enterprise Support and Capability for SMEs

SME digital capability will be supported with $19.2 million in funds allocated to expand the “Australian Small Business Advisory Services – Digital Solutions program”. While $3 million is penciled in to develop a “Digital Readiness Assessment tool” to help businesses self-assess their digital maturity as well as support leaders of Australian organisations to improve their digital literacy and decision-making.

There will also be an additional $2.5 million to support an industry-led “Digital Skills Finder Platform” to enable Australian workers and SMEs to easily find digital skills training courses for reskilling and upskilling in digital literacy.

An Easier and Electronic Way to Deal with the Government.

The Government is also taking significant steps to update its technology with nearly $420 million allocated to transfer existing business registers to a modernised platform. This will allow the creation of a single, consolidated, easily accessible and trusted source of business data.

Along with the existing 2020 Cyber Security Strategy, a further $256.6 million will expand “Digital Identity” to improve access to government services and payments online. This robust system should reduce the likeliness of cyber frauds and attacks. Amongst other innovative measures, this funding would enable the implementation of biometric verification and the integration of myGov as well as onboarding additional services to support businesses and individuals to access more government services online.

Smaller amounts have also been dedicated to incentivise and facilitate the adoption e-invoicing across government and to review the governance and regulation of Australia’s domestic payments system.

The responsibility for the plan’s execution will be shared by 16 government departments (Services Australia, The Australian Taxation office, Department of Industry, Science, Energy and Resources, the Australian Competition and Consumer Commission and the Digital Transformation Agency are receiving most of the funding).

The success of this plan will therefore be contingent on State and Federal Government working cohesively to deliver on the government’s vision and commitment to becoming “digital-first”. History has shown that this could become a great success or end up being a real disaster and waste of taxpayer’s money if not properly executed.

One concept the government understands very well and prioritises in the 2020-21 budget is that the success of their digital solution program is not solely reliant on the research and development of cutting-edge digital technologies and solutions but also on their adoption by the Australian people, businesses and the government agencies themselves.

Prime Minister Scott Morrison said in a recent budget briefing, Australia has “arguably the most advanced real-time payments system in the world. However, for this to be implemented across Australia, businesses need to be online”.

What does this mean for your business? Are you and your stakeholders ready for the challenge?

If you are an SME, how can you and your employees benefit from the government measures? While a lot of these measures have not yet been enacted as at the date of this article, a lot can be done to prepare yourself and your business for the rollout of the digital solution program. It’s important for your business to have a clear vision to unlock its digital agenda. It needs to understand digital across all the component parts to give an essential context against which to make decisions. This is something your business needs, with or without government-based initiatives.

For more information contact your local William Buck advisor.

Federal Budget 2020-21 & The Digital Economy

Eric Flammang

Eric is a registered tax agent and member of the Institute of Chartered Accountant of Australia and New Zealand and holds a Master of Professional Accounting and Master of International Tourism & Hospitality Management.

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