The $630 million allocated in the federal budget to combat cyber risk may kickstart an insurance market which has been struggling to fire.
The budget allocates $230M to implement the new Australian Cyber Security Strategy, released on 21 April 2016. A further $300-400M was outlined in the recent Defence White Paper to enhance cyber capability in the Department of Defence.
The Strategy, including a voluntary cyber ‘health check’ program for ASX100 companies, may encourage more Australian businesses to tackle the risk posed by cyber attack.
The combined $630M spend shows a government more alive to the risk of cyber attack, improving Australia’s cyber resilience, and hoping to grasp the opportunity to lead innovation in the field. It will be interesting to see how these measures impact on the market for cyber insurance in Australia, which remains patchy in terms of product offering, risk assessment and coverage provided.
The $230M to implement the Strategy is allocated to five action themes.
- $38.8 million for the ‘national cyber partnership’, which aims to set the strategic picture for the cyber landscape risk in Australia, including by creating new government leadership positions and relocating the headquarters of the Australian Cyber Security Centre within Canberra.
- $136.1 million for ‘improving cyber defences’, including:
- support for voluntary business cyber security governance health checks for ASX100 companies;
- $15 million giving small businesses access to cyber security testing by certified practitioners; and
- increasing the capacity of the Computer Emergency Response Team (CERT Australia), which advises and assists Australian businesses, particularly those providing critical services, on cyber risk.
- $6.7 million for ‘global responsibility and influence’. This includes the establishment of Australia’s new Cyber Ambassador and developing institutional capacity to respond to cyber risk in countries in the Indo-Pacific region.
- $38 million for ‘growth and innovation’, focusing on research and development, and enhancing Australia’s cyber industry sector. This includes establishing a Cyber Security Growth Centre that will ‘bring together Australian governments, businesses, start-ups and the research community to define and prioritise cyber security challenges‘, in areas that Australia is well positioned to produce marketable solutions.
- $10 million to build a ‘cyber smart nation’, responding to Australia’s critical cyber security skills shortage (the Strategy identifies that “the information security field is expected to see a worldwide deficit of 1.5 million professionals by 2020”), and to educate Australians on cyber risk.