Pandemic a chance to bolster technology

Australia’s emergence from shutdown has opened up a once-in-a-generation reform opportunity, according to Yasser El-Ansary.

Yasser El-Ansary, chief executive of the Australian Investment Council. Picture: Simon Bullard

Australia’s first-mover advantage in emerging from the coronavirus shutdown has opened up a once-in-a-generation opportunity to bring about meaningful economic reform that will boost the nation’s prosperity, according to Yasser El-Ansary, chief executive of the Australian Investment Council.

The acceleration and development of domestic technology would help to future-proof Australia and give the nation a competitive edge over other developed economies, Mr El-Ansary said as he called for a doubling of the size and output of our technology industry by 2030.

“We have a fantastic opportunity to move ahead of other countries and globalised marketplaces, so we need to use that to our advantage. And technology becomes a pretty central part of our thinking here, which is that we can do a lot over the coming months and into the next couple of years to grow our technology capability,” Mr El-Ansary told The Australian.

“And a big part of that is growing the pipeline of investment capital moving into the technology sector and into businesses across all sectors to enable technology to really turbocharge the growth and acceleration and expansion.”

Speaking to The Australian ahead of the release of a member survey conducted by the Australian Investment Council — the peak industry body representing private capital investment firms in Australia — that looked at the impact of the COVID-19 pandemic on the sector and the policy priorities that would boost Australia’s economic recovery and future growth, Mr El-Ansary said private capital could play a central role to the technology-led recovery in the coming months and years, alongside targeted government policy.

 

In the short term, that would mean looking at sectors that can create jobs to fill the gap created by the economic crisis, while over the medium and longer term, the industry would push for more capital to flow to technology businesses as well as lobbying government to ensure the nation’s foreign investment policy framework supported a greater flow of inbound capital from offshore to help support the growth of businesses across the economy.

“In particular tech-enabled businesses which we know have the capacity to grow and expand rapidly and to create new jobs alongside that in a fairly rapid fashion,” he said.

“Ensuring that we get foreign investment policy settings right and calibrated in the right way to allow us to continue competing for capital coming into Australia from offshore is hugely important to our future economic position.”

The Australian Investment Council is calling for the removal of the temporary requirement that all foreign investment in Australia receive FIRB approval. The measure was announced by the federal government in March as fears grew that cashed-up international buyers would swoop on vulnerable companies hit by the coronavirus pandemic.

Prime Minister Scott Morrison on Friday unveiled a sweeping overhaul of the foreign investment rules to include a national interest test for sensitive sectors, but the temporary measures may remain in place until legislation is passed on the new rules.

“What the government announced on Friday opens the door to having a pretty constructive discussion over the next few months in the lead-up to January 1, which is when they want to have any rules implemented and ready to come into force.

“So over the next few months, we’re going to be working with the government to try and get those settings calibrated in the way that we think is most effective to drive greater flow of inbound capital into Australia,” Mr El-Ansary said.

In the member survey, conducted in May, the Australian Investment Council identified four barriers to business recovery: business and travel restrictions; cash flow and access to funding; economic uncertainty and consumer confidence; and social distancing and second-wave concerns.

Reform priorities, meanwhile, centred around taxation reform; market deregulation and red tape reduction; innovation, technology and skills; industrial relations reform; infrastructure spending; international competitiveness; and superannuation and Australia’s ageing population.

“We know that businesses tend to be most innovative when their backs are against the wall. And one of the criticisms that has probably been a fair one in respect of Australia over the last 20 or 30 years, is that we haven't really had the burning platform moment,” Mr El-Ansary said.