2005-06 Budget: ACS welcomes tax reforms –
but calls for greater industry alliance to
put ICT issues on the agenda in Canberra
Thursday, 12 May 2005 - The ACS (Australian Computer Society) has welcomed the tax reforms proposed in the 2005-06 budget and its strong macro effects for the industry and the individual ICT professional – but said it is disappointed by the absence of any significant new funding for ICT initiatives.
ACS National President, Edward Mandla, also called on the ICT sector to join forces to increase the impact of its representation in Canberra.
Key issues arising from the 2005-06 Budget release that the ACS will be following up with Government include (expanded information below):
1. The importance of closely involving the ICT industry in the proposed Venture Capital review;
2. Deeper tax reform to address work/life balance issues including: tax deductibility for child care, savings incentives for choice of up to 12 months parental leave and removal of fringe benefits tax on gym and health clubs;
3. The need to establish a body responsible for the global ICT brand for Australia – aimed at promoting Australia as an onshoring destination and technology nation;
4. The need for a ‘true broadband’ strategy across Australia.
Commenting on the 2005-06 Budget outcomes, Mr Mandla said:
“We currently have many disparate voices representing the ICT sector. For the right kind of impact moving forward, we must develop a united voice on the hard-nosed medium and long term programs for our industry.
“The ACS has invested in developing a solid policy platform during the past 12 months, and we will be working towards a stronger industry alliance to create a 10 – 15 year vision which addresses job creation, increased multinational participation and the establishment of an Australian ICT brand,” he said.
Specific response to 2005-06 Budget:
1. Venture Capital
The ACS said it welcomes the proposed review of the Venture Capital industry, but called close consultation with the ICT sector as part of this review.
“Venture capital in Australia for the ICT sector is currently too risk averse and more likely to fund those who don’t really need money than those who do,” said Mr Mandla.
“Minister Coonan is committed to developing programs for angel funding and the ACS looks forward to being actively involved in finding ways to get funding for the ideas of clever Australians - many of which do not originate from research laboratories.
“A number of the industry’s brilliant ideas come from employed technical people implementing systems in large environments – however, often their own companies are too rigid to develop the solution. These people need to be encouraged and funded.
“We have excellent programs; what we don’t have is a pipeline of exciting technology companies. So many industry professionals express a desire to do creative work and we need to develop opportunities for them,” he said.
The ACS also called for the Government to consider allowing government departments to invest around 0.5% of their technology acquisition budgets to pilot installations of Australian innovations.
“This would allow innovations to be fully developed, the SME to gain real practical experience in implementing their innovation and provide reference sites for commercialisation and to attract investors,” said Mr Mandla.
The ACS will be presenting a number of recommendations on Technology Innovation to the House of Representatives (Science and Innovation Committee).
2. Tax Reform
The ACS welcomed the tax cuts proposed by the Government, but called for continued reforms in the future.
“Our industry has felt the burden of bracket creep and it is a welcome relief that many computer professionals will move below the highest tax bracket for the first time in years,” said Mr Mandla.
“We encourage the Government to continue with tax reform to help the brain drain of Australian ICT professionals. To increase participation rates in our industry, we must ensure that we do not lose our best and brightest solely to the lure of lower tax regimes.
“Multinational CEOs often say the reward for setting up Asia Pacific Headquarters or R&D facilities in Australia is a payroll tax bill. Our industry is labour intensive and pays a disproportionate amount of payroll tax. We encourage the government to continue to battle with State governments over taxes and charges, which reduce competitiveness and employment opportunities in Australia,” he said.
Work Life Balance & Tax Reform: The ACS highlighted its policy in the Work/Life balance area, released earlier this year, and said it has so far received a very positive hearing from industry and in Canberra. However, the ACS believes the government must go further in the next budget with social change.
“As outlined in our Work / Life policy, we are seeking tax deductibility for child care, savings incentives for a choice of up to 12 months parental leave and the removal of fringe benefits tax on gyms and health clubs,” said Mr Mandla.
“The ICT industry can no longer afford to lose ICT professionals due to a lack of flexibility in the work place and the high costs of balancing work and life, particularly when our industry provides the technology for more flexible work arrangements. We will continue to drive these programs into the Government agenda,” he said.
3. Establish a united Australian ICT brand to promote Australia as an onshoring destination.
The ACS said it is encouraged to see industry representational bodies such as Tourism Australia receiving $453 million in this year’s budget – and that the ICT industry must also work with Government to create a body that can attract a significant level of funding to similarly promote Australia offshore.
“Minister Coonan has indicated funding could be found to scope out such an organisation. We continue to work with her department on this project,” said Mr Mandla.
“In the meantime, the ACS is pleased to be increasingly involved in trade discussions and we look forward to participating in COMICTA (Committee for Marketing ICT of Australia) and the Austrade ICT Advisory Panel.”
4. Telecommunications & the need for a ‘true broadband’ strategy.
The ACS applauded the focus on the Metropolitan Broadband Blackspots Program and the HiBis (Higher Bandwidth Incentive Scheme), but reminded the Government that 256Kbp/s ADSL is not true broadband and Australia remains at the back of the global broadband race.
“Fair dinkum Broadband or 3MBp/s is years away for Australians, and we’re also being left behind in our broadband penetration,” said Mr Mandla. “Let’s not forget, they don’t give out 25th place ribbons and that’s where Australia is in terms of broadband penetration.
“We believe the challenge for the Government is to look at how we can be a leader in broadband and not just a subsidy provider to Telstra. The ACS supports the idea of National Senators Fiona Nash and Barnaby Joyce that $7 billion of the $33.8 billion Telstra proceeds should be spent on a national fibre network.
“We don’t see this as taking $7 billion away from the future fund; this is an investment that will provide huge returns,” said Mr Mandla.
Media information: Fleur Brown, Email: fleur@launchgroup.com, mobile: 0419 270 863.
About the ACS: The ACS (Australian Computer Society) is the recognised professional association for those working in Information and Communications Technology, seeking to raise the standing of ICT professionals and represent their views to government, industry and the community. A member of the Australian Council of Professions, the ACS is the guardian of professional ethics and standards in the ICT sector, committed to ensuring the beneficial use of ICT for all Australians. It provides both members and non-members with opportunities for professional education, networking and certification, as well as enabling them to contribute to the development of their profession. Visit www.acs.org.au for more information.
This media release is located online at www.acs.org.au/news/120505.htm