Tech industry’s budget wishlist
Australian investment in tech r&d and more cybersecurity initiatives are firmly on the budget wish list for the tech community.
Hello and welcome to The Download, The Australian’s technology blog for the latest tech news.
Chris Griffith 5.30pm: Cybersecurity is a dominant concern
The tech community will watch closely for the federal government to follow through with its commitment to cyber security in the budget.
Pieter Danhieux, CEO and co-founder of Secure Code Warrior, says it would make sense for cyber security to sit high on the budget agenda as it‘s an industry with an alarming skill shortage, a growing political threat horizon, and one that attracts significant foreign investment into Australia.
“While the National Cyber Security Strategy is a step in the right direction, increased funding will further organisations like AustCyber, ACSC and business leaders alike to establish a robust security posture while protecting the nation against threats,” says Mr Danhieux.
“Moreover, with the growing cyber security skills shortage — with a need of 18,000 experts by 2026 — funding the foundations that bring the cyber security industry to the forefront is a win-win for all; higher employment rates, more training and cyber security awareness across industries and ultimately a safer online world for Australians.”
He hopes to see the government invest in diversity-led STEM educational pathways to enlarge the talent pool by encouraging a more inclusive and less intimidating tech industry. “Companies that fail to embrace the vibrancy that diverse voices bring are the tech dinosaurs of tomorrow.”
Nick Lennon, country manager for Mimecast ANZ, says it is pleasing to see the federal government show its commitment to making Australia a more resilient nation through strengthened cyber security.
“When it comes to SMBs, most want the best cyber security possible, but it’s not always affordable, easy to implement or easy to access,” he says.
“It is also encouraging to see the thirst for government to work with larger businesses on increasing the cyber security capacity of smaller companies and contractors.
“The next step is to roll out the strategy in a way that incentivises businesses of all sizes to invest not only in technology, but also in awareness and training, considering human error accounts for over 90 per cent of incidents.”
He says providing financial incentives to access leading security technology is crucial, so businesses can save on the reactive side of security and invest more heavily in the preventative side. He says this can make a huge impact on the security posture of the nation and build a network of cyber trust in Australia.
Chris Griffith 3.50pm: R&D support is key to the tech industry
Australian investment in technology research and development and selecting local tech firms for government projects are firmly on the wish list for the tech community, with the federal budget to be delivered in hours.
In particular, not proceeding with $1.8bn of cuts to the R&D tax incentive scheme is a common ask. The government introduced legislation for the cut last year before the pandemic, when budget savings was top of the agenda. Priorities have changed with COVID and tech firms see more R&D money as an investment in growing the economy both at home and internationally.
“To support the continued growth of the technology industry, it is vital that the government invests in innovation as a national export,” says Mark Blum, CEO and co-founder of smart connectivity firm Cognian Technologies.
“The Australian companies who have received Accelerating Commercialisation grants, such as Cognian, have already been earmarked for success in global markets. And with predecessors including Canva and SafetyCulture showcasing the best of Australian innovation on the world’s stage, we know there is a huge opportunity to continue growing our innovation export industry.”
Blum also wants more Australian technology used by government. “To help set our home grown innovators up for success, we call on the Federal Government to not just provide R&D grants but also, as one of the biggest buyers in the country, actually invest in using Australian technology within government.
“ Many companies that have devised great technology designed for export fail when it comes to securing their first customers and sales pipeline. A show of support from the government in this regard would go a long way.”
One area of focus is the government's Consumer Data Right (CDR) which allows consumers to request their data from various organisations. Rob Nicholls, associate professor from the school of taxation and business law at University of NSW, questions why its administration has been taken away from the Australian Competition and Consumer Commission (ACCC) which developed it in liaison with industry.
“The decision to take responsibility for the Consumer Data Right (CDR) away from the ACCC and the CSIRO and transfer these to Treasury is odd,” Dr Nicholls says. “Treasury is a policy department and the CDR requires both implementation and regulation. It’s not clear that Treasury has the capacity required to administer the CDR, even with an additional $28 million.”
He says support for small businesses to go digital will need to scale up rapidly. “Capacity building for 10,000 small businesses is tiny when there are 2.2 million such enterprises. However, using online educational techniques such as MOOCs (massive open online courses), could readily facilitate the scaling required to improve digital transformations.”
He says there were instances where a small amount of funding goes a long way. “The adoption of e-invoicing and prompt payment at the commonwealth and state level has a price tag of less than $4 million. For many small businesses, being paid within five days will provide a lifeline and secure jobs.”
Jane Livesey, ANZ CEO of IT services multinational Cognizant, says COVID-19 has proved that Australia has more digital agility than we thought.
“We need to capitalise on this renewed digital focus with a budget that supports stimulating Australia’s digital economy further, with a regulatory shift to help boost innovation and investment,” says Ms Livesey.
She says the announcement of a $7-billion digital fast-track is a move in the right direction.
“The investment in identity management, cyber security and the network are the foundations of any digital transformation, and provide confidence that we are really serious about getting this right. Australia’s ability to put these foundations in place could become the envy of many other countries in the world especially when it comes to managing identity of citizens and businesses. It is impossible to truly digitise when you don’t know who your customer is.
“What is less clear at this stage is how we are going to build on these foundations with more specific initiatives to realise the value, and how we plan to overcome the barriers to digitising our economy. The government is signalling some significant transformation of government services, support for small and medium businesses to “go digital”, and a boost for fintech. We would hope to see the budget include a broad set of incentives and offsets to support Australian businesses to leverage the cloud, improve security and develop new digital products and services.”
She says there are also question marks on whether Australia can achieve the regulatory reform, as well as provide enough skilled talent to support the programs and projects that the investment is targeted at. “We would also hope to see the budget bring a renewed focus on improving support for start-ups in Australia.
“We have a captured audience of entrepreneurs who would typically look to migrate to Silicon Valley and the like. We need to improve the ecosystem and get behind these businesses to give them a greater chance of success at home than away. The value we will achieve from the investments will be greater when coupled with innovation.”
1.50pm: Ten year old Oracle V Google battle heads back to court
A decade-old legal battle between Silicon Valley giants Oracle and Google over software rights moves to the Supreme Court on Wednesday, in a case with enormous implications for copyright in the digital era.
The top court scheduled oral arguments in the case which dates back to a lawsuit filed in 2010 by Oracle seeking billions from Google over its use of Java programming language in its Android mobile operating system.
Two separate jury trials ended with a determination that Google’s “software interface” did not unfairly use Java code, saving the internet giant from a possible multibillion-dollar verdict.
But an appeals court in 2018 disagreed, saying the software interface is entitled to copyright protection, prompting Google to take the case to the highest US court.
Oracle, which in 2010 obtained the rights to Java when it acquired Sun Microsystems — which had supported Google’s use of Java for Android — sought $US9 billion in damages in its original complaint.
Google and many Silicon Valley allies have argued that extending copyright protection to bits of code, called application programming interfaces, or APIs, would threaten innovation in the fast-evolving digital world.
According to Google, a win for Oracle would “up-end the longstanding expectation of software developers that they are free to use existing computer software interfaces to build new programs.”
The Developers Alliance, a non-profit group which includes app makers and other tech firms, filed a supporting brief making a similar argument, arguing that “without shared APIs, every device and program is an island, and modern software development simply cannot happen.”
The American Antitrust Institute argued in an amicus brief that allowing Oracle to maintain copyright protection “may slow innovation and competition in software-dependent markets,” and “may cement software-based monopolies.” The hearing comes amid heightened scrutiny of large technology firms and with Google having seen its fortunes and dominance grow in the online world.
The political overtones are also apparent in light of Oracle founder Larry Ellison’s close ties to US President Donald Trump and Google facing an antitrust investigation.
The US government filed a brief supporting Oracle, arguing that copyright cannot be taken away from creators simply because it exists in digital format.
Google “copied 11,500 lines of (Oracle’s) copyrighted code” as well as the “complex architecture of the 37 packages at issue,” a Justice Department brief said.
The Hudson Institute, a conservative think tank, said in a court filing that allowing Google to walk away with “intellectual property theft” would make it hard to protect any digital property from Chinese misappropriation.
Also siding with Oracle, the American Association of Publishers argued that weakening copyright protection would make it more difficult “to create and disseminate original works of authorship.” The two companies will argue on the question of “fair use” of copyrighted material for a “transformative” purpose. This standard which allows someone to create a completely new work does not require permission or licensing from the original author.
AFP
David Swan 12.40pm: Douugh climbs on ASX debut
Neobank and financial wellness app Douugh has climbed on its ASX debut, up to 6 cents per share after opening at 5 cents.
The Australian tech company, which raised $6m in an oversubscribed Series A round, launched in beta with US consumers last year and is preparing a full market launch, including in Australia, in coming weeks.
“Most of the well-known neobanks are just rebuilding the same old banks in digital form – selling traditional products competing on price, reliant upon getting their customers into debt to turn a profit while outsourcing their software development,” chief executive Andy Taylor said in a statement.
“This is an incredibly capital-heavy approach and I’m not sure, in the end, how ‘neo’ it really is or whether it resonates with the Millennial and Gen Z target market. Our research shows that money management is the fundamental problem that needs solving in banking, and that calls for a new kind of business model.”
David Swan 10.30am: Tech industry’s budget wishlist
Australia’s tech start-ups say they want tax relief targeted towards local start-ups, more focus on STEM education and an emphasis on a digital-first economy in tonight’s budget.
Speaking to The Australian ahead of tonight’s all-important budget, Sam Pratt, the CEO of Render, said he wanted a focus on tech education and even faster internet.
The government recently announced a fibre upgrade to the NBN network, but Mr Pratt said there’s scope for further expansion of the network into 2025, with a goal to provide 10 gigabit internet speeds to as a many Australians and businesses as possible.
“Emerging technology brands in particular need this infrastructure to participate in the prosperity of the global digital economy, and enable Australia to be a global hub for fast internet innovation,” he said.
“Increased investment in technology education and STEM programs in schools and universities will deliver long-term pay-offs for the government and the tech sector. If we don’t focus on this now, it will hold us back for years to come. Broadening the R&D Tax Incentive would also be an incredibly welcome move. This policy is what’s keeping many companies who have expanded overseas tied to Australia.”
A group of start-ups including Atlassian, Canva and Airwallex recently wrote to the government calling for it to reverse a proposed $2bn cut to research and development incentives and called on software development to be added to the tax break.
Des Hang, the chief executive of car subscription service Carbar, said the government needs to start planning for bigger issues beyond the 2020 pandemic.
“While the aim of this budget will be to cushion the blow of the recession, I think there’s a real opportunity here to address future problems with smart technology-focused solutions. There’s also scope for the government work in tandem with start-ups on these issues too,” he said.
“Take climate change, for example. Small changes now, like incentivising the adoption of EV cars for instance, could both stimulate the economy and pay dividends well into the future.
In the current economic climate, anything that doesn’t directly create jobs or keep business going will likely be left out of the budget. But I hold out hope that there will be some long-term thinking in this budget.
“Surely COVID-19 has shown us that we are all in this together. If we can come together to beat this pandemic, then we can do the same with other issues too.”
Karl Redenbach, LiveTiles co-founder and chief executive officer, said he’d like to see the government adopt the Australian Information Industry Association’s recommendation to allocate money to schools for training students and teachers on digital skills, with a focus on the underprivileged.
“Digital skills were in demand during the global financial crisis and they’re in demand during this pandemic. When something else goes pear-shaped a decade from now, we want young Australians who are just starting their careers to be able to ride that out.
“We note the $14.9 million allocated for cyber skills via the Cyber Security Strategy 2020 and some additional money for online safety. That’s a good start, but the AIIA whitepaper called for the digital economy and industry 4.0 capabilities to be prioritised in the curriculum as well. We feel there’s a lot more that could be done for Australian students.”
That sentiment was echoed by Alex Dreiling, co-founder and CEO of video creation platform, Clipchamp, who said if COVID-19 has shown one thing, it is how inevitable technology is to the transformation of society and business.
“If we look at what Australia’s Department of Industry promotes as the strategies for the future, where is ‘information technology’? There are bits and pieces around innovation and STEM, but there is no focus on a thriving industry. Not even an acknowledgment of this industry at a federal level, let alone any push for becoming a world-leading technology hub,” Mr Dreiling said.
“Other industries, such as agriculture, mining and aviation get top attention, but the level of federal support shown to them simply doesn’t exist for the tech industry. This is surprising if we consider that even before COVID-19 there were reports that Australia was on the brink of a tech jobs boom, with the broader sector contributing billions to the economy per year and employing more than the agriculture and mining industries combined.”
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