Channel partners weigh in on the federal budget

Australian technology solution providers are mostly encouraged by what they saw in last night’s federal budget announcement. In particular, it is the security specialists that are cheering the increased investment announced in the last budget before the upcoming federal election.

You can read about all the tech announcements in last night’s budget from our friends at iTnews here, but the TL:DR is that Treasurer Josh Frydenberg announced two major cyber security measures and some more pork for regional Australia.

First, for every $100 that small businesses spend on cybersecurity, they will receive a $120 tax deduction. Second is a $9.9 billion investment in ASD’s cyber capabilities, including a new cyber and critical technology centre.

This will effectively double the size of the cyber workforce in government and put more pressure on the labour market.

The third big thing is that the federal government is set to put another $811.8 million behind improving mobile coverage in regional Australia, in what is likely to be a boon for Telstra.

This is what some Australian solution providers had to say about the federal budget. We also got a lot of pitches from vendors but we will spare you from those.

Haventec CEO David Maunsell

It’s encouraging to see the focus of the 2022-23 Australian Federal Budget include both technology boosts and digital strategies, especially after a period where we’ve seen a huge reliance on technology accelerated by the pandemic.

For Aussie businesses, the changes to government procurement contracts which will both encourage investment in local technology innovation as well as help level the playing field for small and medium contractors to win infrastructure, defence, and security projects, is a welcome announcement.

Importantly, the Technology Investment Boost is supporting businesses to go digital and uplifting their capability. From the perspective of an Aussie digital privacy business, the investment will open the door to Australian organisations looking for innovative partners to securely digitise their operations.

Whilst this funding is welcomed, highlighting the need for better accessibility in digital services would have reinforced the previous positioning with investment to the eSafety Commission, and the regulatory power handed to the Australian Communications and Media Authority which was a move towards greater digital inclusion. We run the risk of leaving parts of the population behind if accessibility is not taken into account when organisations are investing in digital services.

HCL Australia country manager Michael Horton

Pleasing to see that $550 million in additional support is being allocated into training for small businesses with a particular focus on digital and $1 billion per year on cyber skills. What we do need to be cognisant of though is: who is going to provide this training and is it up to the level of what is required to make people effectively ‘job ready’ in the digital world?

PwC Australia partner – cybersecurity and digital trust Pip Wyrdeman

Last night’s budget has given a real shot in the arm to Australia’s future cyber security capability with the government very much focusing on the future in what I see as a very positive light.

We’ve seen significant funding for increased offensive and defensive cyber security by way of a $9.9 billion package that will increase Defence and ASD capabilities over 10 years.

This funding was very much focused on increasing the numbers of cyber security skilled people. But pleasingly, there are other measures in the budget tonight that support this increase in skills, particularly technology skills and getting more people into skilled, secure employment. Cyber security will be a sizable portion of that and that can only be good for all of us at the family, business and government levels.

But this will be a challenge – finding or training another 1,900 cyber skilled personnel won’t be easy and it’s not just as simple as throwing money at the problem. In fact we know the size of the problem is much bigger than 1,900 – AustCyber estimated Australia would need 17,000 cyber security workers by 2026 with 3.5 million vacancies globally. There’s much to do so there’s some details we need to see.

PwC Australia’s recently published 25th CEO Survey showed 100 percent of CEOS are concerned about cybersecurity so we know it is the number one issue on our client’s minds.

This budget has provided some targeted measures that will ameliorate some of this concern. For example, a measure to encourage and increase business spend on technology and skills by way of tax deductions on spend by small business on upskilling their workforce and purchasing new technology such as cloud, e-Invoicing and cyber security.

The budget also included some supporting measures including uplift to regional communities including Telecommunications support as well as a boost to innovation and collaboration between government, businesses and universities including the Patent Box construct.

This is a very future-focused and positive support package that aims to give Australia the ability to take advantage of the opportunities presented by new technologies.

This budget recognises a number of challenges Australia faces around cyber security and the uncertain geopolitical climate. That recognition and some of the measures we’ve seen in this year’s budget should enable us to recognise and act against potential vulnerabilities and then take advantage of the opportunities presented.

Security Centric principal Sash Vasilevski

The Federal Government has discussed the increasing threat posed to Australian business and now recognises that this extends to the SME market. This is an important step towards protecting Australians from cybercrime given the latest Annual Cyber Threat report from the ACSC indicated that losses related to cybercrime had increased for small businesses compared to the previous year and that medium businesses had the highest average loss per cybercrime report. With competing priorities for budgets, SMEs will appreciate the additional purchasing power made available by the budget to provide visibility and risk reduction of the cyber threat.

Sekuro MD Noel Allnutt

The $9 billion investment into cyber defence is a welcomed one from the industry. It’s a sign that the government is recognising what the industry has been saying for years – that cyber security is a massive threat to our nation and that it needs to be treated as such.

Combined with a bigger slice of the action for SMEs by making it easier for them to gain defence contracts, this is good news for the sector. However, as always, the devil (and the red tape) is in the details, so we’ll be watching carefully to see how this plays out in the coming months.

In saying that, we still haven’t seen any investment from the Liberals (unlike their Labor counterparts) in a dedicated cyber security ministry. And it’s hard to walk to talk if you’re not prepared to have dedicated resources to fight what is now the frontline of modern warfare.

Stax MD Adam Beavis (for the ISV angle)

It’s great to see the Government committing funding to the Space sector and the Patent Box economic accelerator to ensure Australian research can be commercialised into strong business opportunities. We also welcome the focus on cybersecurity. However, the Australian tech sector is struggling to access enough digitally skilled talent to help them realise the opportunities in these areas. We need a concerted focus on creating an environment to support local and international talent, to encourage new graduates to the technology sector and increase the skilled resource pool.”

To build the talent pipeline, we need to foster a genuine interest and passion for STEM subjects at primary and secondary school. We need to encourage more women, as well as culturally, linguistically and neurodiverse groups, to venture into STEM. This could be in the form of increased investment in scholarships and training opportunities for students, as well as programs to help those wanting to pivot into technology.”

“We welcome the government’s focus on reskilling and tax rebates for small business that facilitate staff training, as well as regional telecommunications support for our digital-first future – which is greatly needed as more tech workers look to work from regional locations. Australia produces high-quality technology talent who develop excellent technology products and services to drive innovation locally and globally.”

Changes to the Employee Share Scheme will help tech companies attract and retain talent. However, a strong focus on supporting skilled migration is also needed to help reach this future. The government’s redistribution of 10,000 places from the Partner visa category within the Family stream to the Skill Stream will help, but our sector is 260,000 people short of what will be needed by 2025, according to research from Accenture for the Tech Council of Australia. We need to create incentives to encourage skilled workers to migrate to Australia.”

“Over the past two years, as a result of the pandemic and borders being closed, the cost of building new innovative products has increased as businesses struggle to source the right talent. The technology sector is a key driver of overall economic growth. A focus on skills, cutting red tape for migration and strong support for R&D are essential to making it viable for businesses from Australia to grow in 2022 and beyond.”

StickmanCyber founder Ajay Unni

We are not surprised to see this investment, given the increase in cyber attacks aimed at the nation, including businesses of all sizes. But we’d like to see it go further so the
measures in place to secure our digital world are even half as considered as the measures in place to protect our physical health and secure our borders.

Without helpful mandates or more defined guidance on how the funds can be used by Australian businesses, businesses are playing with fire. We don’t need another pink batts situation – businesses need help to understand how to best direct their cybersecurity investments as critical compliance and protection for their business. For example, downloading new anti-virus software isn’t going to cut it!

Australian businesses need to act now to ensure their cyber security posture is in place and up to date to ward off any potential attacks. It’s not a matter of if, but when. And now the federal government has provided an incentive to encourage businesses to proactively protect themselves and their customers, rather than waiting for something to go wrong.

Australian businesses are under significant siege from cyberattacks with the Office of Australian of the Australian Information Commissioner (OAIC) noting that 55 per cent of the 256 data breaches from July to December 2021 were a result of malicious or criminal attacks, and 68 per cent of those were cyber attacks.

We have security systems and controls for car manufacturing, appliances and home construction. The same stringent measures need to be applied to anything digital that goes live with systems and controls in place that stops the risk of public data and information being exposed.

Tecala CEO Pieter DeGunst

It’s pleasing to see the government support Australian SMEs to invest in cyber security technology. It’s an underfunded area and budget constraints is a key issue that is holding back cyber preparedness for many businesses. In addition, in the midst of the biggest tech resource crunch in our history, the investment into STEM development is a welcome development.

TechConnect CEO Mike Cunningham

“As a provider of solutions which help organisations maximise the value of their data, and migrate to cloud environments, we welcome the focus the Federal Budget brings to helping advance the adoption of these technologies across the economy. TechConnect is employing highly skilled Australians to develop and apply world class, industry data insight innovation, and any stimulus which helps our customers benefit from maximising the efficiency and security of their data is a good thing. We would like to see more initiatives, however, around supporting the commercialisation of Australian made technology innovation. We also encourage all governments to expand their investment in education opportunities and training for cyber skills, cloud skills and technology in general to meet the accelerating demand from industry for these skills.”Got a news tip for our journalists? Share it with us anonymously here.

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