Business Council calls for radical reforms and tax incentives to unlock $210b digital boom

Business Council calls for radical reforms and tax incentives to unlock $210b digital boom

The Business Council of Australia has called for radical reforms to the regulatory environment and major tax incentives to fast-track the digital economy that it says will deliver a $210 billion boost to the Australian economy over the next 20 years.

A new report prepared by the Business Council in collaboration with accounting group EY seizes on the rise of digital commerce due to COVID-19 to establish a roadmap for the Federal Government's objective to make Australia a digital leader by 2030.

"People want easier, more convenient ways of doing business so becoming a leading digital economy is win-win; it makes everyday life easier for consumers and it creates new jobs," says Business Council president Tim Reed.

"The slow drift away from cash and paper before COVID-19 became a stampede during the pandemic, now we've got to build on the momentum to make lives easier and position ourselves for the future."

The Business Council report, which has been designed to inform the government's Digital Australia Strategy, has called for the removal of "outdated regulatory barriers" and a boost to the digital capability of small businesses and workers.

Among the first steps, the report has urged the government to appoint a dedicated cabinet minister for the digital economy to oversee the digital transformation.

It says a reduction in red tape is needed to support more businesses and customers to move to a cashless, paperless and virtual society.

This will require a lift in digital skills among employees by setting minimum digital literacy standards for school students and introducing micro-apprenticeships focused on short-term, flexible courses with work placements.

Tax incentives should include grants of up to $10,000 for small and medium businesses to invest in digital skills training, a shift to e-invoicing and improving cyber security.

The report also calls for businesses to be given a 20 per cent investment allowance for digital services to encourage digital investment in cloud-based services.

"Focusing on these priorities will accelerate the adoption of digital technology, keep costs down, make Australia an easier place to do business and create new jobs,'' says Reed.

"The analysis shows that better and more effective regulation could make Australians $119 billion better off over the next 20 years. And we'll need the best skilled workers in the world to take advantage of new jobs in new and developing industries."

Research compiled by PwC for Telstra in February estimated digitisation could be worth an additional $90 billion to the Australian economy by 2025, creating an additional 250,000 jobs.

"If we are bold and if we act now, it will shape our economy, our society and our future for the benefit of all Australians," says Telstra CEO Andrew Penn, who is chair of the Business Council working group that prepared the latest report.

"The Prime Minister has set a goal for Australia to be a leading digital economy by 2030 and is already backing this goal up with investments, including $800 million for the Digital Business Plan to enable businesses to take advantage of digital technologies.

"It is critical that as a nation we continue to build on this momentum to drive connectivity, productivity and efficiency and importantly create a new wave of much-needed employment. We can't afford to miss this opportunity for far-reaching reform and the once-in-a-generation chance to create and accelerate a powerful digital economy in Australia."

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Business News Australia

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