The federal government should fork out more cash to individuals and businesses to help build the country’s digital skills and head off a serious projected tech talent shortfall, the Australian Computer Society (ACS) has said in its submission for the upcoming federal budget.

ACS, the publisher of Information Age, has proposed two measures that would see taxpayers front the cost of workers looking to develop their digital skills or transition into tech careers.

“Australians are under increasing economic pressure,” the ACS submission reads. “Most workers cannot fund extended periods of retraining as demands on income increase annually.”

The professional body is proposing the government create a Career Transition Scheme to pay workers while they reskill in technology.

It would only be available for people over the age of 30 and would see them paid “at the rate of minimum wage or half average annual earnings” for a period of six months while they train the skills needed for a digital economy.

ACS proposed a pilot program of 1,000 people each pulling in a minimum $23,000 over six months to pay for their retraining.

If the scheme was adopted with a target of 5,000 participants a year over 10 years, ACS said, it would “enable an additional 46,000 individuals to upskill and potentially move into new careers”.

That 10-year program would cost at least $1 billion, not taking into account administration costs or future increases to the national minimum wage, but ACS said its proposal would return “over $3 billion through higher wages and business productivity” if the program were adopted in full.

“Additional personal income and company tax collections over a decade would be the same as the government’s outlays on the scheme,” ACS said in its submission.

For nearly 10 years, ACS has been warning that Australia has failed to adequately train its domestic IT skills in keeping with growing demand.

Most recently, its annual ACS Australia’s Digital Pulse report – in which ACS first suggested its Career Transition Scheme proposal – projected a gap of nearly 240,000 workers with tech skills by 2030.

The suggestion to up- and reskill the workforce isn’t new, but the ACS proposal at least recognises that existing government incentives fail to cover the real cost of training for mid-career Australians.

“In addition to FEE-HELP loans to pay all or part of students’ tuition fees, Austudy provides a means-tested $280 per week for those aged over 25 years or older,” the 2023 Digital Pulse report said.

“However, these payments fall short for employed professionals looking to reskill, with the weekly minimum wage in Australia being $812.60.

“Greater support is needed for professionals to provide them with appropriate payments that enable them to retrain, above and beyond existing payments.”

ACS has also recommended greater incentives for businesses to train their workers through a $10,000 per employee tax credit for staff who get “vocational technical training and apprenticeships” in areas like artificial intelligence and cyber security.

The government put in place a similar program last year, offering businesses with less than $50 million annual turnover the option to write off 20 per cent of the cost of training for staff.

That temporary program was backdated to 29 March 2022 and runs until 30 June 2024. Treasury estimates it will cost the government $1.5 billion.