From a Government which had promised much in the way of innovation, the 2017 Budget is both underwhelming and, in one respect, potentially concerning. In terms of 'in' words, 'infrastructure' is very much in; 'innovation' seems to have fallen back when it comes to new Government policy and initiatives.
Okay, what did we learn?
- The Digital Transformation Agency has been granted funds to establish a Cyber Security Advisory Office to 'provide strengthened central governance and assurance for cyber security and broader project vulnerability across government. The CSAO will work with agencies to ensure they are appropriately managing the risks of cyber and other digital vulnerabilities on digital services.' You may very well see a connection between these funds and the Census debacle, but we could not possibly comment
- The Australian Federal Police has also been granted additional funds, where part of the rationale being to support high priority operations in relation to cyber-crime
- A 'Crowd-Sourced Equity Framework' will be introduced to facilitate, you guessed it, crowd-sourcing i.e. online fundraising where small amounts are provided in exchange for equity in, typically, start-ups. A win for start-up jobs and growth then
- Double taxation of digital currency will be removed by aligning the GST treatment of digital currencies with money. If you use digital currency at the moment, you bear GST on the purchase of the digital currency and then again when you use it to buy stuff. So, go forth and (digitally) spend!* (*NB: On this point, the budget papers state: 'This measure is estimated to have a small but unquantifiable decrease in GST collections and associated payments to the States and Territories over the forward estimates period'. Perhaps that is why the commentators have not highlighted this as a significant issue…)
- A "foreign worker" levy will be introduced to provide revenue for a specific training fund:
- Businesses with turnover of less than $10 million per year will be required to make an upfront payment of $1,200 per visa per year for each employee on a Temporary Skill Shortage visa and make a one-off payment of $3,000 for each employee being sponsored for certain permanent visas
- Businesses with turnover of $10 million or more per year will be required to make an upfront payment of $1,800 per visa year for each employee on a Temporary Skill Shortage visa and make a one-off payment of $5,000 for each employee being sponsored for certain permanent visas
So, worth cracking open that cold one to listen to the Treasurer's Budget speech then? Not if you thought the Budget would foster and grow technology and innovation.
The foreign worker levy is an interesting one for those who have outsourced functions to global service providers which themselves use 'fly-in, fly-out' workers. On the one hand, the levy will replace the current training benchmark financial obligations for employers of workers on 457 visas so you might assume it would be neutral.
However, on the other hand and with an anticipated gain in revenue from the levy of $1.2 billion, clearly this is not a simple replacement. (Someone who is far better at maths might also query whether the forward estimates for additional revenue have modelled the impact of the Government's previously announced changes to the temporary worker visa scheme which many consider will result in a drastic reduction in temporary foreign workers, but we digress).
To the extent any provider of technology outsourcing services uses temporary foreign workers an incurs additional cost as a result of this impost, it is a pretty binary (no pun intended) decision: absorb or seek to pass through. Might be worth taking a quick look at those pesky taxation, changes in laws and change control provisions in outsourcing contracts over the morning coffee.