Australia’s economic future in high-tech, says Shadow Treasurer



news Shadow Treasurer Chris Bowen has given a landmark speech in which he argues that much of the future for Australia’s economy lies in high-tech jobs, innovation and entrepreneurship, in sentiments which run directly contrary to the thrust of the Coalition Government’s first budget.

In this year’s Federal Budget, the Government made good on the threat delivered by its Commission of Audit to “abolish” key early stage innovation industry support vehicles Commercialisation Australia and the Innovation Investment Fund (IIF), with the pair and others to be rolled into a new body dubbed the ‘Entrepreneurs’ Infrastructure Programme’.

The Government also cut the funding of ICT research group National ICT Australia and chopped the Interactive Games Fund, which had been supporting the video game development scene.

The moves have been widely criticised by industry groups such as StartupAUS, the Australian Private Equity & Venture Capital Association and the Game Developers’ Association of Australia.

In a major speech to the National Press Club in Canberra yesterday, Shadow Treasurer Chris Bowen said the cuts represented “particularly short-sighted policy” that had “not yet received much public attention”. The full speech is available online in Word format.

“In an attempt to bolster his right-wing credentials with the more extremist elements of his party-room, the Treasurer has felt obliged to follow up his “age of entitlement” rhetoric with a counter-productive assault on government programs that encourage innovation, venture capital, commercialisation and start-ups,” Bowen said.

“Ultimately, the best way to return the budget to surplus is economic growth. Growth through new jobs for the future, through innovation, through science and entrepreneurship. Together with the cynical decisions to make university degrees more expensive and saddling aspiring students with more and more debt, the government has chosen to undermine innovation and research and development.”

Bowen pointed out that groups as diverse as the CSIRO, Commercialisation Australia, Enterprise Solutions, the Innovation Investment Fund, Industry Innovation Councils, Enterprise Connect and Industry Innovation Precincts had all received funding cuts or been abolished in the budget. He added that funding for Cooperative Research Centres had also been slashed and the Research and Development Tax Concession had been watered down.

“A Government truly concerned about creating jobs, about diversifying the economy and about generating new opportunities for those affected by the decline in mining construction as well as the pressures of manufacturing would be embracing the need for innovation, for high technology jobs, for venture capital and the need to encourage start-ups,” Bowen said.

“It would be disappointing if the Budget did nothing to encourage this; it is devastating that it actually takes our national policy backwards. An ideologically driven assault on government programs to foster entrepreneurism and innovation makes no sense.”

“The potential here is big and real. It is not about a few jobs for graduates in t-shirts who happen to fall upon a good idea and strike it rich. It is about creating jobs for hundreds of thousands of Australians that are not vulnerable to being outsourced to other countries or subject to a race to the bottom in wages.”

“The pay-offs for our economy of relatively small government investment of money are, potentially very substantial. In his excellent book “The New Geography of Jobs”, Professor of Economics at Berkeley University, Enrico Moretti, found that for each new job in the high-technology sector, five more jobs are created elsewhere. The ramifications of this are very important. If we get more venture capital, more start-ups, more jobs of the new economy, then the main impact will be jobs for all, spread right through the economy for those many of us who would no more know how to write a piece of software or create a new app than would know how to engage in brain surgery.”

“Australia does not need a carbon copy of Silicon Valley, but we can find our own niche, our way to create thousands of good, well-paying jobs. We can do much, much better.”

Bowen also highlighted the fact that the growing area of crowdsourced funding was still regarded as illegal in Australia due to the lack of regulatory change in the area, and that other aids to the technology sector — such as a potential Entrepreneurs’ Visa, which would allow overseas entrepreneurs to set up shop in Australia — had not been establishd.

“Australia has plenty of entrepreneurially minded people,” the Shadow Treasurer said. “Unfortunately, too many feel the need to move to Silicon Valley or elsewhere to find a culture and environment more welcoming of start-up companies. But we should not only encourage Australians to start innovative companies here, but also invite entrepreneurs from around the world to come and create jobs here.”

Ultimately, Bowen said that if the Coalition was “determined to remove support” from the high-tech/startup sector, then Labor would be willing to lead the debate in this arae.

Opposition Leader Bill Shorten, Bowen said, had made it clear that science would be “front and centre” of Labor’s agenda in Government, taking personal responsibility for the portfolio. In addition, Bowen said, Shorten and he had asked Bowen’s Parliamentary Secretary Ed Husic, “who has a passionate interest in the potential of high technology” to consult with the technology sector on potential legislative remedies for some of the issues he raised in his speech.

Wow. Simply wow. Amazing speech from Chris Bowen. I recommend you read it in its entirety (Word doc).

With the exception of a few politicians such as Kate Lundy, Ed Husic and Stephen Conroy, we tend to hear very little about the technology sector from our nation’s political leaders, especially on issues which are so important for the technology startup sector but which receive so little media attention, such as the Employee Share Option Plan which both sides of politics have acknowledged is an issue but which neither has done anything about.

To hear Bowen speaking about these kinds of issues in public is almost like hearing someone talk about a taboo subject. All we tend to hear from our politicians generally is “mining, mining, mining, farming, manufacturing and a little retail”. To hear someone senior finally acknowledge that the technology and knowledge industries which employ (at a rough guess) somewhere north of half a million Australians are important is a little … stunning.

Reading between the lines here a little, it’s obvious that much of the impetus for this speech comes from Husic himself, who has demonstrated an enduring passion for technology issues. Shorten personally doesn’t appear to be aware the tech sector even exists (having avoided the topic of the NBN almost perfectly for the past six months), while Bowen has never demonstrated much interest in it.

Husic, with his peerless behind the scenes networking and relationship-building ability and knowledge of the tech sector (both rooted in his history as a key union official for Telstra’s main union), as well as his personal interest in these issues, has successfully gotten these important technology topics onto the main political stage.

Regular readers will be aware that I haven’t personally been against many of the cuts which the Coalition made in the budget to programs which were supporting the technology sector. This isn’t because I don’t think the technology sector is worthy of support — it’s more that I think the programs that were cut, such as Commercialisation Australia, the IIF and the Interactive Games Fund — were largely ineffective in their roles. I would much rather see comprehensive tax reform targeted at the entire technology and knowledge work sectors, rather than these kind of direct intervention programs.

However, it’s still fantastic to see Bowen at least discussing the issues in public. At the very least, it gives me hope that we can, after all, have a national conversation about innovation. And that would be a very, very valuable thing.

Image credit: Parliamentary Broadcasting


  1. Agree. Wow.

    Frustrating that there was so little action on the matter while Labour were in power though.

    To be clear, by action I don’t mean handouts.

    I mean a public acknowledgement of the potential for tech innovation to be a key part of the Australian economy in the years to come and thought around how to best achieve this in the Australian context.

    The cynic in me worries that this is more about polemics than tech.

    The optimist in me thinks this could be a landmark speech.

    Time will tell which one is correct.

    • That’s precisely my problem with the speech as well. Labor screwed up the ESOP program in power, ignored the industry for six years, and is now trying to take the high road. Well, you had six years … FFS

    • +1 – wow. really hope this becomes a consistent thrust by Bowen et al – i too dont want to see it as a flash in the pan, something to get the rubes onside. if they are actually getting onside with hacker news and continue to push in this kind of direction im sold – it is FAR more vision than “mining, mining, mining, farming, (some) mfring and a little retail” offered by those holding the tiller now.

      respect where it is due, will be watching Bowen for more, and i sincerely hope there is.. i do not want this to be a flash in the pan.

  2. Manufacturing is practically dead in AU since the loss of the automobile industry. (Well maybe we still have a future in chocolates? as long as we label it as “tourism”? =P)

    The government has pretty much shown it’s throwing all it’s eggs on one bread basket – mining. With the existing subsidies *and* additional funding allocated for “exploration”. It’s become a one trick pony

  3. I’ve actually encountered one of their staffers on Hacker News asking for policy suggestions regarding supporting startups earlier today. On. Hacker. News. Respect. My god Labor, if you’re going to walk that walk you’ll be decades ahead of the coalition. Even if you screw up some implementation and marketing details. Although neither of those are a particularly novel situation.

  4. As an entrepreneur/developer in Sydney, it’s good to see these topics being raised. I know many excellent people who have been sucked away to SV or singapore and it’s absolutely critical that the government makes more effort to keep talent here. Given the status quo of doing absolutely nothing, it’s pleasing to see the topic even being mentioned.

    That said, my cynicism about politics and politicians has reached an all time high. It’s become increasingly clear that politicians will say anything to get elected, with no intention of following through, and party policies mostly consist of “the opposite of what the other party says”, whether that happens to be good or bad. There’s a lot of bad blood, and a lot of faith needing to be rebuilt, and that includes the ALP.

    It’s a positive first step. There’s a long way to go, though, so let’s see.

    • “politicians will say anything to get elected” I’m not sure that is always true. The Coalition has not said or done too much to win over the tech community and it is not as if Labor’s NBN was unpopular. Apart from rusted on LCP supporters who likes their offering?

      And Abbott’s insistence on autobahns rather than public transport is not impressing many.

  5. Under Rudd, Labor made a pretty severe change to the way stock options were taxed and then proceeded to grandfather it in retrospectively.

    If you receive stock options now you have to pay the tax on their assessed value (which is a ludicrously complicated calculation) upfront. Basically giving staff options or shares is now a significant tax problem.

    That ripples through new startups all the way to businesses like Atlassian.

    Equity is capital that startups can call on to build their businesses while letting staff share in the wealth creation.

    All of this hand wringing over the cutback of a government handout program confuses the issue. The government needs to foster an environment where staff can take some risk and reap some reward without being bludgeoned at every step by the ATO.

    • Every action has a consequence. Give something there – the market will adjust. Take something away or make it harder – the market will respond. Too few look at consequence now until it becomes obvious and then it becomes so much harder to rectify and indeed may well cost more than if the original action had not been taken.

  6. The Liberal party will pay lip-service to it and say “we believe that the future is high-tech, but we are going about it the right way, unlike Labor” and then put money into stuff like roads that go nowhere.

    The Liberal party is not the party of “business”, it’s the party of already-existing, deeply-entrenched business (usually meaning big business). They are not the party of free markets and competition, they are the party of free markets and exploitation of market positions. The Liberal party could never support start-ups and innovation, because doing so would jeopardise the market positions of its corporate sponsors.

    The Labor party’s much the same, but in a different way. The best way to see the difference between the two major parties’ fiscal and economic policies is like this: The Labor party protects jobs, including unproductive jobs. The Liberal party protects businesses, including unproductive businesses.

    Having said that, I feel like the new Labor party (so far) has become a party of less nonsense and more good sense (maybe because they’re in Opposition and have less to lose), so they’re still the lesser of two evils. It seems, at least, from more recent statements (especially this one of Chris Bowen’s) that the Labor party wants to develop the new industries to absorb the loss of jobs from old industries. The Labor party, at least on the face of it, seems to want to acknowledge the transition and work to manage it. The Liberal party’s vision though? Agriculture and mining, Australia’s past and its future.

  7. Excellent speech. Thanks for the article Renai.

    The Coalition talks about jobs that will magically appear if we give enough money to the already well off.

    Bowen is talking about what the government can actually do to create real jobs for people.

    That’s a very big difference and one far too many people don’t get. Or perhaps they just believe in magic.

  8. “Husic, with his peerless behind the scenes networking and relationship-building ability and knowledge of the tech sector (both rooted in his history as a key union official for Telstra’s main union), as well as his personal interest in these issues, has successfully gotten these important technology topics onto the main political stage.”

    Really? I’m at a loss to see where or how.

    Imo Senator Conroy is still the ALP figure head of the NBN. And unfortunately the likes of Kate Lundy and Husic have done little to fill his shoes. And the most recent Senate Select Committee hearings were a perfect example of this.
    Without Sen Conroy (and also Ludlum) the NBNCo rep Mr Adcock was able to get away with blue murder.
    Lundy, Husic, et al need to step up to the plate and bring Turnbull and his lackeys to account.

    • I believe it means crowd sourced venture capital.
      Kickstarter is closer to preordering (you get no equity in the company, only a product) than crowd sourced funding as being referenced in the article.

      It is worth noting that very few places are really that supportive of crowd sourced venture capital, but the idea is they should all be moving to try to make it easier.

  9. I agree that Australia should not want to copy the Silicon Valley model, but develop its own niche. This will help create countless jobs and give creative people a chance to show their potential. And then there are plenty of brilliant people in the country who can help lay the foundations of a high-tech environment without having to spend a fortune. This will also help start-up businesses establish well and contribute with all their strength.

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