Published on the 31/03/2022 | Written by Heather Wright
Plus $10b ‘Redspice’ cybersecurity boost…
Australia’s small businesses are getting some much-needed boost to invest in digital technology and skills training, with ‘bonus’ tax deductions announced as part of Budget 2022, while cybersecurity has been given a spicy upgrade.
Small businesses – defined as those with annual turnover of less than $50 million – will be able to claim 120 percent of the cost of new technology and training courses to upskill staff, as deductions under the new schemes.
Treasurer Josh Frydenberg says the deal will reward small businesses investing in skills and new technology and help them become more productive and competitive.
The incentive will provide rocket fuel to Australia’s small businesses.
“We are backing small businesses that are embracing the digital revolution,” Frydenberg says.
“From tonight [Tuesday 29 March], every $100 these small businesses spend on digital technologies like cloud computing, eInvoicing, cybersecurity and web design will see them get a $120 tax deduction.”
‘Portable payment devices are also included in the eligible expenditures but no specifics around whether packaged software would be included were provided.
Investments of up to $100,000 per year will be supported by the new measure, with around 3.6 million small businesses able to claim for any costs incurred from last night. There is no limit on spend for training courses, though the course must be delivered by an approved education provider.
The Skills and Training Boost, which runs until 30 June 2024, is expected to provide $550 million in tax relief, with the Technology Investment Boost budgeted to cost the government around $1 billion.
The moves which come in the lead up to the May election, follow last year’s Budget measures, including helping drive awareness and adoption of e-invoicing, investment in Digital skills and intangible asset incentives that introduced a means of depreciating intellectual property and in-house software.
The initiatives have been applauded by MYOB, which says the government’s endorsement of digital is a ‘big win’ for Australia’s economy.
Helen Lea, MYOB chief employee experience officer, says the incentive ‘will provide rocket fuel’ to Australia’s small businesses.
In 2020 MYOB said a digital tax incentive would deliver a $10.5 billion return to the economy.
The Manufacturing Modernisation Initiative has also received an additional $750 million to ‘support transformational manufacturing projects and catalyse private sector investment in Australian manufacturing’.
An additional $200 million is also being provided as part of the Regional Accelerator Program to strengthen supply chain resilience and sovereign manufacturing capability and $54 million has bene committed for round three of the Manufacturing Modernisation Fund to help small and medium manufacturing businesses. The money will co-fund capital investments by manufacturers across the priority areas to adopt new technologies, including integrating production-related software directly related to their capital investment, to enable them to scale up, grow and compete internationally.
Cybersecurity gets spice
Cybersecurity has also been given a spicy boost, with a whopping $9.9 billion earmarked over 10 years for offensive and defensive cyber capabilities, in what Frydenberg says is ‘the biggest ever investment in Australia’s cyber preparedness’.
The funding, intriguingly named Project Redspice (resilience, effects, defence, space, intelligence, cyber and enablers), will enable the Australian Signals Directorate to almost double in size, with 1,900 jobs created, including more data analysts, computer programmers and software engineers to boost Australia’s capacity to prevent and respond to cyber threats.
The first $4.2 billion have been allocated for spend in the first four years, with savings from other defence areas offsetting the package for a $588.7 million new spend over the four years.
Minister for Defence Peter Dutton says Redspice will ‘substantially increase ASD’s offensive cyber capabilities, its ability to detect and respond to cyberattacks and introduce new intelligence capabilities’.
In what appears a clear reference to the increasingly tense relations with China, whose moves to establish a military base in the Solomon Islands triggered alarm from Australia last week, Dutton says the investment in ASD ‘recognises the deteriorating strategic circumstances in our region, characterised by rapid military expansion, growing coercive behaviour and increased cyberattacks’.
“It acknowledges the nature of conflict has changed, with cyberattacks now commonly preceding other forms of military intervention – most recently demonstrated by offensive cyber activity against Ukraine,” Dutton says.
“Redspice ensures Australia keeps pace with the rapid growth of cyber capabilities of potential adversaries. It provides new intelligence capabilities, new cyber defences to protect our most critical systems, and is a real increase in the potency of ASD’s ability to strike back in cyberspace.”
Separately, $1.16 billion has been allocated for a 15-year an earth observation national space mission, which will see Australia design, build and operate four new satellites.
The National Space Mission for Earth Observation, led by the Australian Space Agency, will ‘make Australia more self-sufficient when it comes to critical earth observation data, while also growing capability and job opportunities, Minister for Science and Technology Melissa Price, says.
The mission is expected to generate 500 jobs over the first four years of the build phase, and will involve more 100 local companies across Australia.
“Developing and launching these first four Australian satellites will create the foundation of industry know-how for more complex space missions next decade,” Price says. “That means more expertise and more jobs right here in Australia in this critical industry.
“It will also solidify our relationships with like-minded countries so we can continue to draw on the data from their satellites for the benefit of all Australians.”
Also announced was $10.4 million to enhance and redesign the Payment Times Reporting Portal and Register, making it easier to view the payment practices of Australia’s largest organisations.
The government’s previously announced patent box scheme providing concessional tax treatment to companies commercialising patents, is also being expanded to include agtech and low emissions technology, as well as biotech and medtech which were announced in the last budget.
The expansion of the initiative comes despite it not having passed through Parliament yet.
It wasn’t all a money scramble, however, with the Digital Transformation Agency seeing its budget slashed by $5.8 million.
