Budget 2024: Tech sector reactions

- May 15, 2024 11 MIN READ
Carolyn Breeze
Scalare Partners CEO Carolyn Breeze
The answer to “how to you eat a shit sandwich?” when it comes to politics is: “With a grin”.

The startup sector put on a brave face tonight following the 2024 federal budget.

There were some big ticket items, but two years into its 3-year term, Labor offered little to tech specifically as it focused on signature policies such as Future Made in Australia instead and climate change issues, with the Australian Renewable Energy Agency (ARENA) scoring a record $7.1 billion for net zero transition.

But more broadly, a lack of investment for startups and tech was noted amid broader support for the small business sector.

Here’s how tech leaders responded.

Carolyn Breeze

CEO, Scalare Partners

It’s disappointing to see a lack of meaningful investment in local technology development in this year’s budget.

With at least $466 million in taxpayer funds going to US Quantum Computing, we hoped to see comparable backing for local solutions across spaces outside of manufacturing, such as artificial intelligence.

The government has reiterated its $39.9 million pledge for the development of policies and capability to support adoption and use of AI in a safe and responsible manner, but we would like to see more encouraging local talent to roll up their sleeves and develop world-class tech innovations.

New STEM Diversity programs and innovation visas look positive on paper, but it will be some time until the impact of these can be observed within the industry. The Government could have done more in this budget to enable businesses and individuals working on new technology today.”

The budget allocated to supporting women in the workplace is encouraging to see – $38.2 million to uplift diversity in STEM plus $55.6 million to support women in traditionally male-dominated fields is significant and potentially quite impactful.

However, it is not specific enough to benefit female founders or founders from culturally diverse backgrounds, which are demographics that are historically under-supported leaders in our business community.

If the Federal Government is serious about putting Australian innovation on the map and forging a path to sustained economic recovery, we need to bring traditionally disadvantaged people to the forefront and provide them with grant and funding opportunities that are designed specifically to benefit their platform and potential.

Rehan D’Almedia

CEO, FinTech Australia

Fintech Australia, Rehan

FinTech Australia CEO Rehan D’Almeida

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.

We also welcome the new funds for sustainable finance initiatives, net zero transition and programs designed to address financial scams and fraud.

Fintech has a key role to play here. We also look forward to the establishment of two new Austrade Landing Pads, which have been well utilised by fintechs in the past.

But we’re concerned that the fintech industry, with a proven track record for innovation and job creation, 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.”

Adam Milgrom

Partner, Giant Leap

Adam Milgrom

Giant Leap partner Adam Milgrom

This is perhaps Australia’s most impact-led Federal Budget yet; it resonates strongly with our investment focus and we’re excited to see new funding commitments for health, climate and education.

Unfortunately despite the support for these key high-impact sectors we see 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.

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.

Sally Bruce,
COO, Culture Amp

Sally Bruce

Culture Amp COO Sally Bruce

We welcome the new paid superannuation on parental leave measure announced in the Budget tonight.

We know women are disproportionately impacted when they take time out of the workforce to have and raise children, it impacts their retirement income with women having, on average, about 25% less superannuation than men.

This measure will also help increase women’s economic participation in the workforce to drive a stronger economy and encourage both men and women to take the time required to go on parental leave and return to work.

Women’s workforce participation rates are shockingly behind, and this is both our biggest underutilised asset and our biggest opportunity.

Jack Qi

Director, William Buck

Jack Qi

William Buck director Jack Qi

As anticipated, this Federal Budget sees slim pickings for Australian startups.

At a general SME level, there’s the extension of the $20,000 instant asset write off to 30 June 2025.

The signature policy of this Budget, Future Made in Australia, has two strong themes – emissions reduction and strengthening Australia’s position in a deglobalising world stage.

Unfortunately for startups, the main beneficiary will be larger businesses in the manufacturing and mining space. There is however a possibility that startups aligned with these themes will somehow be able to benefit, either directly or indirectly.

We will need to await additional details to be released by the Government.

Things to keep an eye on include the proposed $1.7b Future Made In Australia Innovation Fund to be established to “support innovation, commercialisation, pilot and demonstration projects and early stage development” in the priority industries, and the $1.5b injection into the Australian Renewable Energy Agency (ARENA) to further investment in renewable energy and related technologies.

Paul Barrett

CEO Hysata

Paul Barrett CEO Hysata (crop)

Hysata CEO Paul Barrett

Hysata is really pleased to see the Future Made in Australia policy as the centrepiece of the Federal budget.

The investment allocated to support clean technologies and innovation will help Australia keep pace with the US and Europe.

We are living proof of an Australian company that can deliver net zero transformation and provide an enduring comparative advantage for Australia – developing and manufacturing high efficiency electrolysers in Australia and exporting to customers around the world.

Our world-leading electrolysers will be critical in producing the green hydrogen required to decarbonise hard to abate sectors such as steelmaking, chemical manufacturing, heavy industry.

We look forward to working with the Australian Government as it progresses this critical policy.

Ryan Black

Acting CEO, Tech Council of Australia

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.

We welcome measures to invest in safe and responsible AI, while continuing to encourage the Government to develop a comprehensive plan to drive AI development and adoption across the economy.

Importantly, this year’s Budget builds on existing flagship initiatives like the National Reconstruction Fund and Industry Growth Program, through which we hope to see funding roll out to the tech sector as soon as possible this year.

Australian tech businesses continue to face challenges with attracting the best and brightest talent to our shores due to an outdated, slow and unresponsive migration system.”

The government’s migration reforms, including the announcement of a refreshed National Innovation Visa as part of the permanent migration program, will give tech companies more ability to scale, innovate and compete on the global stage.”

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

We agree there’s an important role for Government in driving more co-investment into innovation and advanced industries where Australia has clear strengths.”

Private investment will continue to do much of the heavy lifting here, which is why we’re pleased to see the Government prioritise FIRB reforms and a commitment to develop a ‘single front door’ to attract and facilitate major investment proposals in Australia.

Quantum is an area where we have huge potential to create a multibillion-dollar industry and thousands of jobs.

Following the significant investment in this budget, 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.

Des Hang

CEO, Carbar

Des Hang

Des Hang

There’s a change of tone in this federal budget. Rather 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, event the continuation of the instant asset write-off is a surprise.

This makes sense given the government is towing a fine line of 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 federalgovernment 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.

With regard to the auto industry, there’s also questions as to whether the government’s level of support for the EV rollout is enough. There is a genuine tug of war between EVs and hybrids going on in Australian new car sales.

The government has continued to pour funds — to the tune of $60 million — in creating new infrastructure for EVs. With cost of living biting, and EV price decline stagnating, more may need to be done to broaden out adoption and ensure that spend isn’t put to waste.

Tim Buckley

Founder, Climate Energy Finance

The development of the production tax credit (PTC) model for critical minerals and green hydrogen to incentivise onshore value-adding is a very strong step forward, a clear acknowledgement that Australia can’t simply leave it to free markets when other countries have made such significant public interest interventions, undermining global trade.

This will leverage Energy Minister Bowen’s 82% Renewables by 2030 initiative, turbocharged by the 32GW Capacity Investment Scheme which is driving the rollout of utility scale firmed renewables by underpinning and catalysing private investment, meaning Australia can power our refineries with renewable energy so as to export embodied decarbonisation.

The world is in a rapidly accelerating technology, trade and finance decarbonisation race to the top as the global energy transition speeds up. This is Australia’s biggest investment, employment, and export opportunity in a century to reorient from our fossil fuel reliant past, but we clearly needed this budget to respond strategically, proportionally and fast, which it has done.

Tonight’s budget shows a government that understands both this imperative to act to transition Australia to its future as a clean, green superpower and the opportunity cost and risks of not acting to secure Australia’s place in the new net zero world economy.

We applaud the extra $3.2bn funding into ARENA, but continue to call on the Government to give the Future Fund a $20bn value-add equity mandate for mining value-adding, to leverage the new investments galvanised by the combination of the $4bn Critical Minerals Fund, $7bn critical minerals PTC, $6.7bn Hydrogen Production Tax Incentive and the 32GW Capacity Investment Scheme. We note the reference to leveraging Export Finance Australia’s National Interest Account, expanded to support for projects where domestic capability is critical to protect our national security interests.

We particularly note the absence of any additional stimulus on ‘electrifying everything’, and only $28m of new funding to better integrate consumer energy resources into the grid. This is disappointing when household electrification and grid modernisation is key to cheap, clean, secure energy for all Australians. $3.5bn in new energy bill relief for households will help offset a fraction of the fossil fuel sector hyperinflation.

Helen McHugh

President, ACS

Helen McHugh

ACS president Helen McHugh

I’m pleased to see $39 million to support the safe and responsible adoption and use of artificial intelligence (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.

Equally, while I’m delighted to see the measures to increase diversity in the STEM (Science, Technology, Engineering and Mathematics) fields, however the $38.2 million dollars falls short of what’s needed to get more people into the sectors that will be critical to Australia’s future prosperity.

Luke Fossett

GM, GoCardless

Luke Fossett

GoCardless GM Luke Fossett

Given the shifts in the global investment landscape over the last 18 months, it’s clear that our federal government needs to take a more proactive approach to support the tech sector.

There’s a critical need to champion the next generation of Australian tech entrepreneurs. With the decline in international funding for startups that are pre-revenue or even pre-profit, local support has become essential.

If we don’t address this issue, we risk either diluting our unique entrepreneurial culture or losing our best talent to more robust VC markets like the US or UK.

While the current budget makes some strides in enhancing digital capabilities and fostering innovation, it doesn’t quite meet the urgent need for substantial funding required by early-stage tech companies. It’s imperative that future budgets provide stronger backing to ensure our homegrown talents can thrive and compete on a global stage.

What isn’t in this budget is any kind of significant over-the-till support for businesses.

The extension of the $20,000 instant asset write-off and energy bill relief assistance is somewhat helpful, but there’s nothing here that will encourage patrons to support local businesses or ease the pressure of slowing cash flow, dwindling patronage and escalating overheads.

Without significantly bolstering financial and administrative support for SMBs in this federal budget, we risk undercutting our own economic recovery. While $8.6 million for digital advisory support services is a good start, but there’s more that can be done.

The government’s continued support for mental health and financial counselling services is a vital lifeline for many small business owners, as the connection between late payments and the stress and genuine fear of business failure at critical stages is significant.

Sally-Ann Williams

CEO, Cicada Innovations

Sally-Ann Williams

Cicada Innovations CEO Sally-Ann Williams

We are pleased to see the $22.7 billion Future Made in Australia package being used to drive Australia’s potential to become a renewable energy superpower, including by attracting investment in priority areas such as $6.7 billion in hydrogen production over the decade, $466.4 million to build the world’s first commercial‑scale quantum computer, and $448.7 million to monitor the earth’s climate, agricultural production, and natural disasters.

The government is committing $4.3 billion over 10+ years towards reforming Australia’s tertiary education system, with a particularly promising focus on initiatives that will directly augment its clean energy investments and programs.

“For instance, the New Energy Apprenticeships Program will be expanded to support 10,000 new apprentices in the clean energy sector, while $30 million will be used to turbocharge clean energy VET courses, and $50 million to upgrade and expand clean energy training facilities. We must see more government policies connect the dots between investment and enablement.

To fully realise our national economic potential, however, it’s critical all Australians have the opportunity to upskill and participate.

Initiatives like the $55.6 million Building Women’s Careers program will help to support women’s participation in critical industries like clean energy and advanced manufacturing. But diversity must go beyond gender to also include our First Nations people, people in regional and rural areas, and people with disabilities.

So we are also pleased to see $2.4 billion being directed towards creating new opportunities in jobs, health, education, justice, and housing for First Nations people
Aussie science and innovation needs immediate and sustained investment to power a future made in Australia.

Kylie Walker

CEO, The Australian Academy of Technological Sciences and Engineering (ATSE)

Kylie Walker

ATSE CEO Kylie Walker

Australia lags behind the United States, Japan, and Germany, who all spend more than 3% of their GDP on the research and development which powers their economies. Ultimately, Australia’s investment in R&D will make or break the Future Made In Australia investments announced tonight.

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.

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.

We welcome the development of a needs-based funding system which supports students who would typically miss out on a university education. We look forward to working with the government to design this system in a way that supports under-represented students and prepares the STEM workforce of the future.

ATSE welcomes support for teaching students to undertake their unpaid work placements, and urges the Government to extend this support to university engineering students – in recognition of the dire shortage in engineers, whose skills will be critical to the clean energy transition.

Daniel Hunter
CEO, Business NSW

The federal government must focus on reducing SME’s tax burden. As Business NSW has said previously, NSW’s unfair deal at the hands of the federal government’s GST policy has again highlighted how important tax reform is in reigniting growth for SMEs.

The Future Made in Australia fund represents a significant investment in the local manufacturing industry.

While Business NSW welcomes the focus on domestic manufacturing, there needs to be a solid understanding on the three things that are the fundamentals of innovation: lower taxes, lower energy prices and an industrial relations system that is flexible, modern and internationally competitive.

If it costs too much to do business here, businesses will simply go overseas. Emerging enterprises will reach their limit here and then move on to friendlier business environments.

Guy Callaghan

CEO, Banjo Loans 

Once again, the budget measures are falling well short of what the SME sector needs as it grapples with high inflation, high interest rates and falling demand across many sectors.

When will the federal government wake up and finally provide the support that small business needs? There are initiatives in this budget for big business, but the engine room of the Australian economy is small business and they’ve once again been overlooked in favour of easy headlines at the top end of town.

While we welcome the continuation of the instant asset write-off, we hope that it’s finalised quicker than the extension announced this time last year, which is still languishing in Parliament.

SMEs need more assistance — such as additional funding rebates — and they need the tax burden shifted off them so they can pay staff more and fund expansion plans. Small businesses are tired of waiting for the federal government to realise they can’t be taken for granted.


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