Pre-election 2025-26 Federal Budget: What’s in it for the tech industry? Not much

The pre-election 2025-26 Federal Budget hasn’t been terribly exciting for the technology sector as it was mainly skewed towards cost-of-living and infrastructure investments particularly in the face of impending election .

Treasurer Jim Chalmers pointed to the previously disclosed $3 billion that has been put towards upgrades to the national broadband network, investments in STEM education, clean energy transition and investments in the Future Made in Australia program with a touching mention on AI. 

Some of the key projects that were allocated funding across various agencies included $228.7 million towards supporting the digital health agenda and modernising My Health Record; $207 million towards the uplift and second tranche of ASIC’s business register; $151 million to continue enhancing the NDIA’s fraud detecting IT systems and $53 million towards the digital implementation of the Aged Care Act 2024. 

The federal government has also been on a three-year process to axe or shift funding, including $720 million in cuts to consultants, contractors and labour hire. In November last year, it was also revealed that $527 million worth of work would be brought back in-house during 2024-25, including just over $49 million worth of ICT and digital solution core work within agencies and excluding the Department of Defence.

The Australian Information Industry Association (AIIA) acknowledged this was very much a pre-election budget but highlighted the lack of strategic vision for the digital economy and to respond to the clear challenge outlined in the budget speech where Artificial Intelligence (AI) was stated as one of the five seismic shifts occurring across global economies including Australia’s.

Notably, the AIIA pointed out that key policy frameworks underpinning AI and research and development (R&D) remained under review, with funding decisions likely deferred until those processes conclude. The Treasury also forecasts in this budget that R&D funding will fall by almost $650 million over the next five years.

“The AIIA supports the government’s efforts to lay the groundwork for future reforms, but with the world around us accelerating their AI investments, our productivity at record lows and technology moving at pace, we are falling further behind,” AIIA CEO Simon Bush said.

“Australia has the talent and ambition to lead in digital innovation. What we now need is a strong, forward-looking strategy – backed by investment – that places technology and digital capability at the heart of Australia’s economic story.”

The Tech Council of Australia (TCA) also weighed in supporting a range of initiatives to grow skills and to support the development of energy technology to advance Australia’s economic growth. 

However the TCA was disappointed that no explicit tech sector investment was included in the package of budget measures, stating it was a missed opportunity to build national competitiveness.

RSM Australia national leader Mathavan Parameswaran also weighed in stating that the development of the National AI Capability Plan back in December was a positive first step, but the lack of continued investment in this year’s Federal Budget will make it even tougher to achieve success and for Australia to be competitive globally.  

“Investment into AI training and implementation has been very much front of mind for the technology sector on the back of lower productivity and concerns around Australia’s competitiveness on the global AI stage,”  Parameswaran said.

“After missing out on a substantial investment into AI in last year’s budget, we are disappointed to see no further announcements in relation to investment into AI.

“More broadly, technology will be critical in overcoming Australia’s productivity woes and investment into digital literacy nationwide is critical in driving further technology adoption and investment would have been welcomed by the sector had it been provided.”

While tax cuts will benefit thousands of workers, the ACS also expressed concerns the government wasn’t aligning itself to take advantage of AI. 

“We would like to see greater government investment and incentives for the private sector that would see increased funding for developing skills, investing in local data centres, boosting AI sovereignty, and bolstering Australia’s cyber security readiness, particularly in the small to medium enterprise sector,” ACS CEO Josh Griggs said.