No-one in the tech sector was expecting it to rain Bitcoin during budget week.
In the weeks leading up to the Treasurer’s Tuesday speech and the traditional Thursday night sequel from Opposition Leader Peter Dutton, expectations were already hovering at basement altitude.
Both major parties have talked a big game about tech lately — keeping kids safe online, capitalising on the AI boom, protecting Australians from scams and cracking down on cybercrime, just to name a few examples.
Nevertheless, there was a sense of realism from all concerned, who understood that any self-respecting pre-election budget was about slam dunk vote-winners. You know, like tax cuts. Or energy prices, perhaps.
In light of those low expectations, there’s something impressive about the fact that budget week still managed to genuinely surprise and worry even the most devoted realists in the tech economy.
Tech certainly wasn’t a “winner” in Labor’s budget.
To be fair, there were no major cuts, so it wasn’t exactly a “loser” either.
It’s more accurate to say that tech wasn’t in the race at all.
AI, cybersecurity, quantum and online safety were all ignored completely or relegated to vague mentions, with no new spending attached.
Two days later, Peter Dutton followed suit, although the vague mentions were at least greater in number.
The opposition leader promised to “encourage new areas of the economy”, listing artificial intelligence, automation, cybersecurity, space, biotechnology and nanotechnology as examples, without explaining how he planned to do so.
At the risk of resurrecting memories of the Coalition’s famous attack ad of 2022 — devastatingly effective as an earworm if not as a vote switcher — there’s a hole in the budget.
Stay tuned for the club remix, There’s a Hole in the Budget Reply Speech.
The difference is that this time, the call isn’t coming from inside Parliament House. It’s coming from every corner of Australian tech.
‘Zip. Zero. Zilch’: AI misses out
The biggest (though not the only) complaint about the budget’s tech failings concerns the budget’s silence on artificial intelligence — in terms of boosting both Australia’s AI capacity and safety.
“Nothing for AI Safety. Zip. Zero. Zilch,” said John Pane, chair of the digital rights advocacy group Electronic Frontiers Australia (EFA).
Many stakeholders were harbouring modest hopes for an AI Safety Institute, after Australia’s commitment to establish one at a global summit last May, but they were disappointed.
“Australia remains the last signatory [to the Seoul AI Summit Declaration] to stand up an AI Safety body or regulator,” Mr Pane says.
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It’s emblematic of a more enduring and serious gripe within the sector that Australia is yet to reveal a plan for AI regulations, let alone implement it.
Minister for Science and Industry Ed Husic indicated in January the government was on the verge of unveiling its long-awaited AI guardrails, but has since gone quiet on the subject.
“The absence of these guardrails not only jeopardises individual rights but also undermines public trust in AI technologies,” John Pane says.
That trust was already looking shaky — an Ernst and Young survey from November 2024 found 55 per cent of Australians were worried that AI would threaten their jobs, while 65 per cent were concerned about the impact on vulnerable people, and 68 per cent were concerned their personal data would be used to train AI — a scenario that’s already playing out.
As well as those concerns about a growing lag on AI safety, the budget has also renewed an existing anxiety that Australia is falling behind in its AI capabilities.
“AI ambition seems to have dried up,” said Chris O’Connor, the co-founder of Australian AI company AtomEthics.
“The absence of a clear, well-funded capability plan increases the risk of [Australia] losing top AI talent.
“This budget jeopardises the government’s own ambition to add $600 billion annually to Australia’s GDP by 2030,” warned Mr O’Connor, adding that without serious investment, “Australia will continue to fall behind other countries”.
Where else did the budget fail on tech?
AI wasn’t the only corner of tech that felt hard done by.
Quantum computing didn’t rate a mention, and there was no apparent spending on either of the government’s flagship tech policies — the teen social media ban or the News Media Bargaining Incentive (aka the tech tax that isn’t designed to collect any revenue).
Cybersecurity was at least name-checked in the main budget overview, but only in reference to previous spending: $60 million to help small businesses protect themselves from data breaches at the hands of cyber criminals.
“The Federal Budget for 2025 treats cybersecurity as background noise,” said Evan Vougdis, Cyber Director at cybersecurity firm NSB Cyber.
“It’s disappointing … more decisive action feels urgently needed.”
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If there was an outright “loser” in tech this year, it might have been research and development (R&D).
Mr Husic had only last month bemoaned Australia’s plummeting investment in R&D, declaring it “must stop”.
But this week’s budget revealed the government would wind back tax breaks for R&D by $640 million over the next four years.
A spokesperson for Mr Husic told the ABC that the federal government had made several significant investments in the tech sector, pointing to half a billion dollars for PsiQuantum “to build the world’s first ‘useful’ quantum computer” in Brisbane, announced in April last year.
“In just the last few weeks, our $15 billion National Reconstruction Fund has invested almost $100m in world-leading Australian tech companies across quantum, AI and cybersecurity,” the spokesperson said.
“We have spent our first term laying the foundation for a thriving tech sector, setting a target of 1.2 million tech jobs by 2030, establishing first national strategies for robotics and quantum.”
Funding restored for a key tech regulator, after cuts last year
There was some relief for at least one regulator tasked with keeping big tech companies in line — the Office of the Australian Information Commissioner (OAIC).
The OAIC’s Privacy Commissioner has previously taken action against AI facial recognition company Clearview over privacy breaches and social media giant Meta over the Cambridge Analytica scandal, among others.
It suffered cuts of $11.1 million in the last budget, leading to the loss of 35 full-time positions and a more “targeted” approach to enforcement (translation: less of it).
This year’s budget restored much of that, promising $8.7 million over three years to support enforcement activity, $5.3 million to oversee the Digital ID and Identity Verification Service programs, and $2.3 million from 2025 for oversight of My Health record.
“Increased funding to OAIC really is a swings and roundabouts gesture,” said John Pane from the EFA.
“The funding replaces what was ripped out.”
It’s not bad news, but seen in that light, calling it good news feels overly generous.
Funding for the government’s main online safety regulator, the Office of the eSafety Commissioner, remained largely static, with some minor cuts forecast in years to come.
Of course, budget promises aren’t the last ones we’ll hear before election day.
The tech sector and those concerned with it will be crossing their fingers for new funding from the campaign trail before May 3.
But after this week, those already low expectations are now plumbing new depths.
