Technology Industry insights from the 2024-25 federal budget

As the federal government outlined its 2024-25 federal budget on Tuesday, which covered $2.8 billion across four years for planned IT investments, the technology industry shared insights on how the spending could take shape across the country. 

Overall, victors from last night’s budget include Services Australia which secured more than $500 million over four years for mygov and PsiQuantum which landed $466.4 million in equity and loans to go to quantum computing ambitions.

However, as many industry players welcomed the budget, some warned more could be done on research and development (R&D) and the start-up landscape. 

The Tech Council of Australia (TCA)

The Tech Council of Australia (TCA) welcomed initiatives from the budget stating however noted there’s still more to do to uplift Australia’s productivity growth.

Tech Council Acting CEO Ryan Black said, “Australia’s tech sector is vital to the future of our economy and job creation, which is why we’re pleased to see some important new investments announced in this Budget.”

“The federal government has injected funding into some major priorities for the tech sector, including AI, migration, digital ID and tech workforce diversity, while also making some substantial investments in future high-tech industries,” Black said.

He said the spend “importantly” recognised “existing flagship initiatives like the National Reconstruction Fund and Industry Growth Program”. 

“The additional $38.2 million to improve diversity in STEM is a meaningful investment in building a more diverse and inclusive tech workforce,” he said. 

Black also said with the role quantum is set to play moving forward “we urge the Government to move quickly to inject more direct funding in Australia’s quantum businesses and research organisations to take advantage of our world-leading quantum capabilities.”

The Australian Computer Society (ACS)

Meanwhile, the Australian Computer Society (ACS) also welcomed budget tech investments but warned more could be done to ensure the country’s competitive stance. 

Helen McHugh, ACS President, said: “I’m pleased to see $39 million to support the safe and responsible adoption and use of AI technology and the commitment to developing a National Robotics Strategy. 

“However, we are concerned that more must be done to help Australian businesses, governments, and society deal with the challenges and seize the opportunities from these emerging technologies,” McHugh said. 

While McHugh was “delighted” to see STEM diversity spend, it was also said, “the $38.2 million falls short of what’s needed to get more people into the sectors that will be critical to Australia’s future prosperity.” 

The Australian Academy of Technological Sciences and Engineering (ATSE) 

The Australian Academy of Technological Sciences and Engineering (ATSE) compared Australia’s spend against the US, Japan and Germany which spend more than 3 percent of their GDP on research and development, according to the organisation. 

ATSE CEO Kylie Walker said, “Investments in battery manufacturing, renewable green hydrogen production and critical minerals processing are central to the nation’s net-zero ambitions.

“These are areas where we have a comparative advantage in the global supply chain and which are fundamental for the jobs of the future,” Walker said. 

“However, it is critical for the Government to recognise that developing these industries requires innovations that will only come from a strong and well-funded science and technology sector.”

The ATSE also supports the $1.1 billion over five years for the first stage of reforms of the Universities Accord.  

Science and Technology Australia (STA)

The nation’s science and technology peak body that represents over 225,000 scientists and technologists, welcomed the announcement of a review of the R&D system and the Future Made in Australia Budget commitments. 

STA president professor Sharath Sriram, “We need to increase R&D expenditure to 3 percent of GDP as fast as possible.

“If we had this level of investment right now, the economy would be $100 billion and 42,000 jobs better off.” 

Sriram the $566 million to Geosciences Australia to map Australia's resources and critical minerals, and a $1.7 billion Innovation Fund to support innovative green technologies “are positive first steps towards diversifying our economy.” 

 FinTech Australia, Giant Leap and Carbar

CEO of FinTech Australia Rehan D'Almedia said, "As expected, cost of living is front and centre of this budget and supporting existing proven industries such as fintech wouldn’t be a priority. 

"We, however, welcome some of the measures that will benefit fintechs, such as the much-needed funding to continue modernising the regulatory frameworks for payments and digital assets while ensuring ASIC can handle the licensing influx. 

“This was included in our pre-budget submission as well.”

While the peak body representing over 400 fintechs in Australia welcomed various green and cyber security investments, D'Almedia said there is concern that the fintech industry “receives limited support.”

"While existing funds are yet to run their course, there’s no new funding measures for the Consumer Data Right — a key piece of the government’s plans to help reduce cost of living pressures by raising competition. 

“To see this policy realised, after years of work, we’re now banking on funding for the CDR during a potential election-year budget.

"Nor is there much in the way of direct measures that will support a marked decline in fintech funding, which is down from a high of $3 billion in 2021 to $331 million last year.

"Fintechs and the startup ecosystem were perhaps expecting more, given the circumstances. But perhaps, while currently less of a focus, there are ways in which it can play a key role in other areas such as the Future Made in Australia policy and the National Reconstruction Fund," D'Almedia said.

Future investment 

Partner at venture capital fund Giant Leap, Adam Milgrom said there was “little in the way of direct support for the startup industry and it's unclear how the startup sector will interact with the Future Made in Australia policy.” 

"We are buoyed by the focus on the environment and resources aimed at improving health and educational outcomes but the lack of support for the startup ecosystem is a missed opportunity.

"There's plenty of policy changes and strategic investments the Government could make that include the industry to lever greater change.

Milgrom added that “perhaps that’s the message behind these measures, that the government still isn't convinced that it's their role to ensure Australia's startup ecosystem continues to thrive into its next growth phase."

CEO Des Hang at car subscription platform, Carbar followed with similar sentiments stating that “than fund support services or programs that benefit startups, the government is making a specific bet on industries, such as energy or quantum computing. 

“Given this, even the continuation of the instant asset write-off is a surprise.

"This makes sense given the government is towing a fine line between supporting the economy while trying to dampen inflation. 

“Support for the startup industry was bound to be in the firing line, as it can be an economic accelerator. 

“Still, each year, the sector acts surprised. Is it time to accept that the Federal Government won’t support the sector as we’ve seen in the past? And perhaps that raises questions about the sector’s relationship with the Federal Government.”

Hang added that “with cost of living biting, and EV price decline stagnating, more may need to be done to broaden out adoption and ensure that spending isn’t put to waste.” 

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