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Canberra urged to fast-track IT spending

PEAK IT industry associations have labelled last week’s Federal Budget a disappointment, claiming only minor spending has been directed at one of Australia’s fastest growing industries.

According to WA Internet Assoc-iation spokesperson Kim Heitman, Treasurer Peter Costello missed a golden opportunity to kickstart the economy by boosting IT spending.

“Within the information and com-munication sectors, we strongly believe IT and online business could be a major driver of the economy,” Mr Heitman said.

“As a consequence, the failure of the Government to invest in the information and communications industry is a missed opportunity.”

Internet Industry Association chief executive Peter Coroneos said the technology sector could drive the growth of the economy if the Budget was more expansionary towards the IT industry. He said it now would be up to old economy sectors to turn the economy around.

The Budget’s only direct contri-bution to online activities comes in the form of an $8.3 million grant for the Federal Government’s Business Entry Point website.

The site initially was used to enable small businesses to register for an Australian Business Number online, but will extend its activities to allow businesses to apply for tax concessions.

However, it seems for many industry groups the most important factor should have been the creation of a clear-cut strategy on the future of the WA information and commu-nications sector. Both the WAIA and the WA branch of the Australian Computer Society said the Budget had failed to do this.

ACS chairperson (WA) Gee Lightfoot said the society consis-tently had called for leadership from the Government.

“Without question, the most consistent call of ACS officials over the past six years has been for our political leaders to exercise leader-ship in regard to the ICT industries,” Ms Lightfoot said.

“(The Government must) deliver a vision and strategy to grow our

local industry and provide new jobs and economic benefits for the community.”

Mr Heitman agreed with the ACS, saying the Federal Government had shown a lack of understanding of the rapidly growing sector.

“I think one of the problems is the Federal Government doesn’t really ‘get’ information technology,” he said.

“Most of the decisions it has made in the course of its office have been adverse to the industry rather than helpful for it. Digital TV, for example, decisions on the third generation spectrum and of course the constant attempts to censor the Internet.”

Mr Heitman said the industry was being left behind by international competitors because the local indus-try was working under restrictive regulations.

The good news for the IT sector came a week before the Budget was handed down. Federal Communi-cations Minister Richard Alston announced a $163 million program over four years to improve Internet access to remote communities. The plan will provide $12 million to guarantee minimum Internet connec-tion speeds of 19.2Kbps, with a further $38 million to be spent by Telstra.

A total of $37.7 million will go towards upgrading mobile phone reception in remote and rural areas.

Ms Lightfoot said the package was a step towards equal services in the bush.

“We welcome the new commit-ment of $163 million to improve tele-communications services to those in regional, rural and remote areas,” she said.

“It is another important step towards providing equitable access for all Australians.”

Ms Lightfoot said the ACS also was encouraged by the increase in tax concessions to 175 per cent for businesses undertaking research and development, but said the Federal Government could have delivered more.

Mr Heitman said the initiatives were not enough and still left WA behind the rest of Australia.

“I think in WA we do have a Cinderella status compared with the investment in infrastructure in the eastern states,” he said.

“For example, we don’t have a significant cable network which is able to deliver video on demand and Internet to homes. Neither do we have the coverage in the state for mobile phone and Internet tele-phony.”

Many industry commentators believe the IT sector’s Budget snub is due to the Government’s extensive innovations package announced earlier this year. The $3 billion “Backing Australia’s Ability” plan is aimed at providing 21,000 new undergraduate university places in areas such as information and com-munications technology.

However, the funding is spread over four years and it is expected only $150 million will be spent this year.

Ms Lightfoot called on the Government to bring forward the implementation of strategies in the innovation package.

“We are asking them to bring forward or expedite some of the items in the innovation statement which have the potential to benefit our research and commercialisation efforts in the short term,” she said.

The industry criticism is at odds with Senator Alston’s beliefs.

“The Federal Budget represents a further significant step forward in creating a world-class environment where all sectors and communities have access to a full array of innovative communications and information technology services,” Senator Alston said.

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