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Analyst View - PM’s doorstop $1.2B digital economy announcement has big industry and agency implications

by Judy Hurditch •
Free resource

On Thursday 6 May, five days before next Tuesday’s 2021-22 Budget, the Prime Minister repeated something he has said several times over the last year. He told reporters in a doorstop interview that “digital transformation is central to Australia's economic plan and securing our economic recovery”.

Intermedium has been saying for some time that, given how often he repeats this priority, the industry should expect high levels of digital spending in this budget. 

We already knew about the sort of funding that was going towards Regulatory Technology (RegTech), and coincidentally had just finalised a comprehensive article on what we see happening as governments fully embrace the idea of making it easier for businesses to manage their regulatory obligations.  

The real news from the doorstop is how much the government is planning to spend. Morrison told reporters that Tuesday’s budget would include a $1.2 billion investment in digital technologies. A press release from Minister Stuart Robert provides some details which account for just over $300 million. 

No doubt we’ll have to wait for the budget for the rest of the details, because we don’t yet know over how many years the funding will be made available, and we also don’t have an exhaustive list of the initiatives it will go towards.  If I were a betting person, though, I would say that a significant amount will go to the Digital Transformation Agency (DTA). 

In fact, if I were, I might stick my neck out even further and say that there is a chance that this funding might come with strings attached, along the lines of the NSW Digital Restart fund, which was allocated $1.6 billion over three years in the last NSW budget.

As we noted in our article this week, the government now sees the DTA as vitally important. This was affirmed first in the decision to retain Stuart Robert as the responsible Minister despite his move to the Industry portfolio, and secondly in the decision to move the DTA back to the Department of Prime Minister and Cabinet.

This will be the second budget in a row to feature extraordinarily high ICT New Policy Initiative funding.  According to our analysis, the total ICT related funding in the 2020-21 Budget was the highest we have ever seen, and at $2.8 billion was almost ten times higher that the $391 Million allocated in the previous, pre-election Budget. This funding came on top of the COVID-19 related announcements of earlier in the year, which included the $1.6 billion Cyber Security package.

Over $1 billion was committed in the 2020-21 Budget broadly towards ensuring industry complied with government rules. This involved improvements in regulatory assessments, compliance and approval processes across a wide variety of industries, affecting how organisations ranging from SMEs to the largest multinationals interact with government. The funding is explicitly intended to help the economy recover and grow post COVID 19 by using RegTech to make it easier for businesses to interact with government. 

We already know, courtesy of earlier announcements, that the 2021-22 Budget will earmark $120 million (presumably part of the $1.6 billion) specifically towards what have been termed ‘deregulation’ measures. This continues the ‘JobMaker’ approach of the 2020-21 funding – the measures are intended to make it easier for businesses to deal with government regulations through RegTech solutions.

This ‘deregulation’ theme has been with the government ever since the Abbott-era deregulation units best exemplified when the now Department of Finance was called the “Department of Finance and Deregulation”, making cutting red tape part of its core mission. But whereas the Coalition’s old approach to ‘cutting red tape’ was to slash regulation, this time the focus is on providing user-centric solutions to make complying with government requirements easy without having to reduce the complexity of the underlying regulation.

An increase in end-to-end processes enabled by RegTech will require a focus on improved data sharing, inter-agency and inter-jurisdictional collaboration, all of which have been improved during the COVID-19 pandemic and remain a focus of the Data and Digital Minister’s Meetings.

 
Jurisdiction
  • Federal
Category
  • IT Services
Sector
  • Finance & Services