Trade Resources Industry Views 2013 Budget Is Hailed as Sound for The IT Industry

2013 Budget Is Hailed as Sound for The IT Industry

Tags: Sound Budget, IT

The 2013 Budget has been hailed as "sound" for the IT industry but could have been better if certain measures were employed earlier, analysts say.

"It's quite a sound budget from an IT perspective," Ovum Australia research director Kevin Noonan said.

"It's well argued ... there's a balance of structural work and new systems," Mr Noonan said.

He said he would have called it a good budget "if this were at the start of the electoral cycle rather than the end of the electoral cycle".

"A lot of the things that they're (government) doing now in the budget are things that you would have really expected at the beginning of the cycle," Mr Noonan said.

The election falls on September 14 and while Labor is fighting tooth and nail to hang on to power, polls indicate the Coalition will win office.

Mr Noonan said that unlike the previous budget or Mid-year Economic and Fiscal Outlook, this year's budget "actually spelt out where the savings would come from".

One example is the Department of Human Services where a number of efficiency measures will deliver net savings of $62.4m over five years.

This includes replacing the use of cheques with electronic funds transfers to GPs and specialists when making pay-doctor-via-claimant payments, and increasing the rate of online transactions undertaken by Austudy recipients.

Advisory firm Grant Thornton Australia said the budget did not fully support the ICT sector or contain adequate measures to boost productivity, innovation and competitiveness.

According to Grant Thornton technology lead partner Simon Coulton, more could have been done for the start-up community.

"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," Mr 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," he said.

Mr Coulton said there were "no announcements that are likely to significantly benefit the ICT sector" in the budget.

"The government's mentality seems to be 'build it (the National Broadband Network) and they (the economic benefits) will come".

He said the government had to do more to "educate the broader public and business community about both the social and economic benefits of a truly digital economy and must encourage private sector investment in related technology".

The digital economy and the NBN isn't just about connecting rural Australia and providing households with better internet speeds, he said.

"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.

"What we were hoping to see were changes that would encourage a culture of innovation in respect of the NBN and the digital economy and encourage the take up of new technologies, particularly by the private sector.

"This would have gone some way to support Treasurer (Wayne) Swan’s claim that the NBN will ‘turbo charge’ Australia’s economy. This budget delivered on none of those hopes.”

The government has, however, pledged an additional $12.9 million to showcase the potential of the NBN as part of the budget.

The funding will provide training to small- and medium-sized businesses and not-for-profit organisations, and offer up to $375,000 to selected councils to use the NBN to improve service delivery.

Source: http://www.theaustralian.com.au/australian-it/a-sound-budget-for-it-ovum/story-e6frgakx-1226642586122
Contribute Copyright Policy
A Sound Budget for IT: Ovum