While technology-industry figures have welcome a smattering of relevant Budget allocations, many have warned that its failings in areas such as skills development and cybersecurity defence will have dire long-term consequences.

Despite announcing $1.2b in tech-industry support and tax breaks, this Budget’s biggest technology-industry investments related to the $301.8m expansion of the My Health Record system and $200.1m overhaul of the myGov portal – leaving just $700m to spread across a range of research, skills development, and other initiatives.

Startups were cautiously optimistic about some of the initiatives, which include $111m to speed the Consumer Data Right (CDR) rollout – which will create new opportunities for data-exchange startups – and explicit support for Australia’s video game industry.

Yet behind the headline announcements were a host of skills-development initiatives that many industry observers believe are singing the right song, but far too quietly.

Budget funding targets four key sectors of the digital skills market, with allocations including $10.7m for a Digital Skills Cadetship Trial; $43.8m to expand the Cyber Security Skills Partnership Innovation Fund; and $22.6m over six years to provide over 200 competitive national scholarships through the Next Generation Emerging Technology Graduates Program.

A $24.7m allocation, over six years, will help develop domestic AI skills through the Next Generation Artificial Intelligence Graduates Program – one of several initiatives that helped make Australia’s artificial-intelligence (AI) industry a big winner.

Yet “to effectively plug skills shortages and tailor the Australian workforce to the needs of our economic recovery,” Avaya ANZ managing director Simon Vatcher said, “we need to expand our focus.”

“As well as targeting areas like AI and cybersecurity, education and training need to be enabled to address fields like computer science and distributed education from the early stages – in schools via improved IT curricula – through to professional roles.”

Emulating the cybersecurity industry’s successful AustCyber strategy, the government also announced plans to create a $53.8m National Artificial Intelligence Centre that will unify the country’s AI development and commercialisation efforts by “coordinating Australia’s AI expertise and capabilities”.

An additional $33.7m will support public-private partnerships to develop “AI-based solutions to national challenges”, while a $12m grants program will support development of AI-based solutions to local or regional problems.

A new, tax-beneficial ‘patent box’ policy is designed to encourage medical and biotechnology innovation, offering a lower corporate tax rate on profits coming from patents that is expected to return $206.4m to innovators’ hip pockets.

Funding the cyber cold war

Cybersecurity funding was a particular focal point for industry leaders, given that the Budget has been handed down in a climate of escalating political uncertainty where a rising tide of cyberattacks has become a bugbear for military, social, and business leaders.

That threat has gained immediacy as military leaders warn of a regional war over a restive China’s claims over Taiwan – which this week led to China threatening missile strikes against Australia – and an Australian Senator argues that the country should launch punitive cyberattacks against China to punish it for ongoing transgressions that have treated Australia like “a hacker’s training ground”.

“As the world becomes an increasingly dangerous place,” Ivanti ANZ area vice president Matthew Lowe agreed, “we cannot afford to take a Band-Aid approach to cyber security. Instead, government needs to invest in ensuring that our cyber defences continue to evolve and grow.”

Daniel Lai, chief executive of Australian cybersecurity success story ArchTIS, warned that while $42.4m to prop up Department of Home Affairs’ cyberattack resilience is “a fantastic first step”, the allocation was nonetheless “reactive, and falls short of addressing the critical proactive steps to stop a cyberattack in the first place.”

Budget allocations were equally inadequate in closing Australia’s yawning cybersecurity skills gap, industry figures warned.

Despite a “healthy” $43.8m investment over three years to expand the Cyber Security Skills Partnership Innovation fund, McAfee ANZ director of systems engineering Sahba Idelkhani warned, the government’s Budget allocations are still unlikely to produce enough cybersecurity skills to meet increasing demand.

“Any help to bolster the state of cyber skills right now is positive,” Idelkhani said, “but the Budget has fallen short to provide enough support needed for those wanting to enter the cyber workforce.”

Government programs are built around commendable ideas but, he warned, restricted funding – and the need to train and hire staff domestically due to COVID-era bans on overseas hires – will limit their practical value.

“The small pool of people allowed to apply for the proposed Next Generation Emerging Technologies Graduates Program isn’t nearly enough to solve today’s critical need for talent in the backdrop of a highly volatile threat environment accelerated by COVID-19,” he said.

Although conceding that the government’s skills-development investments are “positive”, Cognizant ANZ CEO Jane Livesey agreed that they were longer-term strategies that would have little effect on the “immediate need to provide programs to support young, technology-literate Australians into digital apprenticeships…. to grow the national pool of talent available to execute on the critical digital and cyber programs being undertaken in both the public and private sectors.”

The industry would, she said, like to see “rebates or other tax breaks that would incentivise industry to address this critical national issue”.