Tech Leaders Criticise Federal Budget Priorities

The latest federal budget promises major economic benefits from AI, but fails to allocate significant funding for it, prompting criticism from the tech sector. While the government forecasts AI could contribute up to $600 billion annually by the end of the decade, industry leaders doubt how this will be achieved, given the budget’s lack of specific AI-focused initiatives. Instead, funding has been directed towards other areas, including $3.8 million over five years for Adelaide Zoo’s Giant Panda Program, leading some to argue that pandas are receiving more support than tech innovation.

The government has highlighted cybersecurity as a key focus, citing its importance for small businesses. A cybersecurity breach can cost businesses around $50,000 to resolve, yet, according to experts, the allocated budget translates to roughly $20 per business - raising concerns about whether this level of support is sufficient. Some had expected wider reforms, such as changes to research and development (R&D) tax incentives, but these were notably absent.

Other budget measures include plans to ban non-compete clauses for employees earning below $175,000, aimed at improving job mobility and wages. While this is expected to benefit around three million workers across industries like childcare, construction and hairdressing, some in the tech sector believe it will have minimal impact on startups, who typically do not rely on such restrictions. Instead, they argue for policies that support innovation and entrepreneurial growth directly.

Despite the lack of targeted AI investment, some industry leaders maintain that Australia still has an opportunity to strengthen its digital capabilities. Looking at international examples, countries like Singapore and Japan are making heavy investments in AI talent and infrastructure, positioning themselves as global leaders. In contrast, Australia’s approach appears more fragmented, relying on initiatives such as a $7.01 million extension to STEM education programs to indirectly support future AI growth.

Without stronger commitments, experts warn that Australia risks falling behind in the global technology race. While tax cuts and productivity reforms may provide indirect benefits to businesses, many argue that investing directly in digital transformation and AI is crucial to driving long-term economic growth and global competitiveness.

Source: The Australian, Innovation Australia, Vatican, Cyber Daily