Treasurer Wayne Swan’s 2013 Budget does not fully support the ICT sector or investment in ICT required to drive productivity and competitiveness, according to advisory firm, Grant Thornton.
“Existing policy positions that have disadvantaged the ICT sector and ICT investment, such as the taxation of equity based employee compensation schemes and the net reduction of R&D concessions, remain unaltered,” Grant Thornton technology partner lead, Simon Coulton, said.
“Amendments to the thin capitalisation rules reducing interest deductibility, increasing tax paid by corporate Australia and targeting large companies and multinationals, many of which will be ICT businesses, will further adversely impact the investment in ICT and Australia’s digital economy.”
Coulton noted there were no announcements that were likely to significantly benefit the ICT sector.
“Funding announced in the Treasurer’s speech such as to connect local councils to ubiquitous high speed broadband and training regional businesses and communities in early rollout sites is not a new initiative,” Coulton said. “Nor is the funding of innovation precincts a new commitment, and in any case is not focused primarily on encouraging innovation related to the development of Australia’s digital economy”.
Coulton highlighted the Government needed to do more to educate the public and businesses on the benefits of a digital economy, and encourage private sector investment in related technology.
“The Government’s mentality seems to be ‘build it (the NBN) and they (the economic benefits) will come,” he said. “The digital economy and the NBN is not just about connecting rural Australia and providing households with better internet speeds. Only in making the proper investments will Australia realise productivity gains and improvements in competitiveness required to succeed in the Asian Century and simply realise an adequate return on its massive investment in the NBN”.
Coulton said it was hoping to see changes that would encourage innovation in respect of the NBN and the digital economy as well as the take up of new technologies, particularly by the private sector.
“This would have gone some way to support Treasurer Swan’s claim that the NBN will ‘turbo charge’ Australia’s economy. This budget delivered on none of those hopes,” he said.