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Channel doesn't make budget

Channel doesn't make budget

Short sighted, and disappointing would aptly describe how the IT channel community summarised what the 2000 Howard Government's budget did for the industry. While conservative spending, and the imminent introduction of the GST has received broad support, the Government's failure to address industry concerns has left players shrugging their shoulders and turning once again to the real issue: surviving the period of deferred expenditure in the lead up to the changes in the tax system.

Perhaps Colin McKenna, Avnet Intergrand's managing director, best summed up the industry response with a simple equation: "We didn't expect a lot and we didn't get a lot."

According to Australian Information Industry Assoc-iation (AIIA) sources, funding to the National Office of Information Technology (NOIT) is set to continue, but the Government has failed to announce any initiatives to either curb the skills shortage, or encourage R&D spending in the IT&T sector.

While he admitted that he was not surprised by the budget's contents, MicroTouch MD Craig Stockdale bemoaned the Government's continued lack of foresight.

"If you want to foster manufacturing and R&D, you have to set up an infrastructure that allows that process to occur. Implementing something now in my opinion is probably too late - the horse has bolted. We needed someone who had a vision five to 10 years ago who was prepared to push something through and foster and develop that sort of thing. I know, from a business perspective, we would not set anything up in Australia, we would have to set it up somewhere in Asia because of the spin-offs that the Governments would provide in these countries. You can get seven to 10 years tax free in some countries in Asia. The Federal and state governments in this country just don't get it."

However, not everyone agreed that the responsibility for encouraging IT R&D rested with the Government. "Although we would definitely like to see the Government getting actively involved in encouraging R&D in the industry, it certainly doesn't depend on the Government. The Australian IT&T industry has to invest in ongoing R&D, that is simply a fact," commented Graham Orford, ASI national sales and marketing manager.

Commentators were similarly divided over the Government's role in addressing the industry skills shortage. AIIA executive director Rob Durie responded that: "The Association remains very disappointed that there was no increase in the number of university places devoted to IT&T."

Denis Mackenzie, financial director of Northern Territory reseller NT Technology, would like to see more Government spending on IT education as regional areas are feeling the skills shortage pinch. "It is very, very difficult to get people in the NT," he commented.

On the other hand, Volante managing director Simon Duncan is of the opinion that "relying on the Government to take the full role on that is too ambitious. The IT industry must become more effective in organising education strategies for itself."

The unfulfilled wish list aside, the principal concern facing the channel is the GST. While the fallout of the introduction of a broad based consumption tax in New Zealand saw 20 to 25 per cent of SMEs close shop, the word from the channel is that preparations are on track for the July deadline.

McKenna's comments were echoed throughout the channel: "There will be a lot of work in the transition stage, but it is not going to be a major issue. The problem at this stage is getting through the problems created by deferred expenditure. We are looking forward to an acceleration in the marketplace after the introduction of the GST."


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