Ealier this week, Labor brought down its first federal budget, and the tech sector has reacted with mixed emotions.
Treasurer Jim Chalmers reassured the public on Tuesday this budget was “the beginning of something new and responsible”, however, when it came to startups, there was not much new to announce, and it also included a surprise $197M cut to the long-standing Entrepreneurs Program.
Tech Council of Australia (TCA) CEO Kate Pounder said that while there were welcome measures in the budget, there were still issues that need to be addressed.
“The Budget will help put Australia on the path towards our shared goal with the Government of having 1.2 million people in tech jobs by 2030, but there is more work to do,” she says.
Despite Australia having comparative strengths in these areas, we are significantly under-investing compared to other nations and compared to other parts of the tech sector where Australia punches above its weight, such as business-to-business software and fintech.
Kate Pounder, Tech Council of Australia
Plus sides
The positive takeaways from the budget included $99.8 million for the Strategic Critical Minerals Development Program to support Australian critical minerals producers over three years.
$15.4 million will also be used to support the previously announced Startup Year Program, a HECS-style loan scheme (up to $11,800 per student) that will available for up to 2,000 eligible university students per year, to allow them to participate in a uni-run accelerator. Consultation for Startup Year is open for the next few weeks, and the first programs anticipated to start in July 2023.
$62.6 million will also be put towards SMEs to fund energy-efficient equipment upgrades to support the energy sector.
Ed Husic, the new industry and science minister, issued a release pointing to $111.3 million in grants for regional manufacturing.
“We are delivering on the commitments we took to the Australian people to build a stronger and more resilient future,” he said.
“We want to be a country that makes more onshore – and that means backing the businesses that are making things here and supporting manufacturing in regional Australia.”
The cuts
While $5.8 million will be put into the Women in STEM and Entrepreneurship program over the next five years, nearly $4 million has been removed from the Supporting Women’s Mid-Career Transition into the Tech Workforce component of the 2022-2023 March Budget.
Ms Pounder believes the industry will take a hit because of this.
“Women comprise only a quarter of the tech workforce, despite these roles being amongst the fastest-growing, most flexible and secure jobs in the country, with half the gender pay gap of other high-paying industries, so we are disappointed to see funding cut to a program which had the potential to help improve these numbers,” she says.
While we support the Government’s broader efforts to increase women’s workforce participation, including the $5.8 million over 5 years through the Women in STEM and Entrepreneurship program, we simply don’t agree that it is wasteful to support women to reskill into high-skilled, high-paid jobs.
Another big cut was $197M taken from the Entrepreneurs Program, the key plank of the previous government’s early-stage startup assistance, which included programs such as Accelerating Commercialisation grants and Innovation Connections. The AC grants alone give out up to $1M in matching grants, and have been a relatively significant funder of early stage innovators in Australia.
Apparently, the $197M is to be taken from “uncommitted funding” from the program at large, and will be “redirected” elsewhere. Earlier this year, the program endured a withering report into its “administation… [and] procurement” processes which had fallen short of the “appropriate standards of transparency, consistency and fairness”, particularly in late 2019 and early 2020.
However, since 2014, the program has supported 22,000 Australian companies, and companies in the growth program had experienced average increases of 3.5 new jobs, an additional $1.47 million in turnover and had raised an additional $3.75 for every $1 in grants awarded. 93% of companies said they would recommend the program.
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