Prime Minister Scott Morrison has announced a new JobMaker Digital Business Plan, which will see the federal government invest almost $800 million to enable businesses to take advantage of digital technologies to grow their businesses and create jobs.
Announced as part of the government’s economic recovery plan (with more details expected in the upcoming budget), the plan aims to help businesses continue to digitise their operation.
Speaking on Tuesday (29 September), the Prime Minister noted that the COVID-19 pandemic had accelerated the adoption of digital technologies by Australian businesses and consumers, which had helped many to survive the crisis.
To help businesses “continue that digital push and expand opportunities for businesses to grow and create more jobs”, the Prime Minister announced that the new JobMaker Digital Business Plan would provide investment to a range of businesses.
While in-depth details of the plan have not yet been released, Mr Morrison did provide a high-level outline of what it would entail.
Digital identity system
Under the plan, the government will provide more than a quarter of a billion dollars ($256.6 million) to develop a digital identity system.
While the system will initially enable “more secure and convenient engagement with government services”, the government has said that it would later help users engage with the private sector, too.
This could help bring about a wider adoption of digital verification of identity services in the mortgage sector, for example.
Digital identity is reportedly already being used by over 1.6 million Australians and 1.16 million businesses to access over 70 government services.
Mr Morrison also announced that government would consult on making permanent the temporary reforms to allow companies to execute documents electronically and hold virtual meetings.
The Prime Minister also outlined that the government would allocate $3.6 million towards mandating the adoption of electronic invoicing by 1 July 2022 for all Commonwealth government agencies to “encourage greater adoption among businesses supplying to government and within their supply chains, and to consult on options for mandatory adoption of e-invoicing by businesses”.
More money for CDR and fintechs
The plan also will see government spend a further $28.5 million to support the rollout of the Consumer Data Right (CDR) to the banking and energy sectors. No further details on this have yet been released.
The government has already committed more than $120 million to the CDR initiative, which aims to enable consumers to securely direct their banking data to others to access bespoke financial products and services.
The CDR is currently limited to the sharing of data for deposit and transaction accounts, and credit and debit cards, with the sharing of data relating to home loans, personal loans and joint accounts commencing from 1 November 2020.
At this stage, the new regime is only open to major bank customers, with smaller authorised deposit-taking institutions (ADIs) to opt in over the next 12 months.
Treasurer Josh Frydenberg told media on Tuesday: "We have already implemented the Consumer Data Right through open banking, as it applies to credit cards today, but we're also extending it to mortgages and personal loans by the end of this year. What this means is if you have a $250,000 mortgage on your home and you're a trusted customer of a bank, a long-standing customer, you may be paying $1,000 too much for the variable interest on your loan compared to the best market offer that is otherwise available.
"And we're extending the consumer data right also to the energy sector and why is this important? Because, again, if you are on an established paying system in one state, you may be paying $400 more for a medium set of energy supplies than you otherwise could get if you got the best median market offer, if you got the best market offer available."
He added: "We should all see digital transformation as an opportunity, not as a threat. We want existing Australian businesses to transform by using the digital opportunities available to them. We want new businesses in Australia to be born digital and, in doing so, we will help Australian consumers and Australian businesses alike."
Prime Minister Scott Morrison also announced nearly $10 million to support fintechs to “export financial services” and attract inward investment.
Other investments include:
- A further $419.9 million to enable the full implementation of the Modernising Business Registers (MBR) program, allowing businesses to quickly view, update and maintain their business registry data in one location;
- $29.2 million to accelerate the rollout of 5G, including an initiative to invest in 5G commercial trials and testbeds in key industry sectors such as agriculture, mining, logistics and manufacturing;
- $22.2 million to support small-business operators take advantage of digital technologies through an expansion of the Australian Small Business Advisory Service – Digital Solutions program, a Digital Readiness Assessment tool and a Digital Directors training package;
- $11.4 million for a new regulatory technology commercialisation initiative to improve compliance and directly support digital technology firms;
- $6.9 million for two blockchain pilots directed at reducing business compliance costs;
- $5.9 million to “boost Australia’s influence on international standards”; and
- $2.5 million to connect workers and small and medium-sized businesses to digital skills training.
The plans also reportedly includes a review of the “regulatory architecture” applying to the payments system to “ensure it remains fit for purpose and is capable of supporting continued innovation for the benefit of both businesses and consumers”, and reforms on the regulation around stored-value facilities to support innovation and competition in line with the recommendations of the Council of Financial Regulators.
Mr Morrison commented: “The plan supports Australia’s economic recovery by removing outdated regulatory barriers, boosting the capability of small businesses and backs the uptake of technology across the economy.”
Treasurer Josh Frydenberg added: “The governments’ digital business plan is targeted at building on this digital transformation of Australian businesses to drive productivity and income growth and create jobs.
“Our digital infrastructure package is estimated to increase Australia’s GDP by $6.4 billion a year by 2024, and around $1.5 billion of this additional economic activity is estimated to flow to regional Australia each year,” the Treasurer said.
ABA welcomes announcement
The Australian Banking Association (ABA), which is part of a coalition of business groups advocating for the fast-tracking of a digital economy, has welcomed the plans as a “major step forward that will modernise the way Australians do business and deliver significant benefits to consumers”.
ABA CEO Anna Bligh commented: “COVID-19 has highlighted century-old regulations slowing business down.
“These changes will make banking faster and easier,” Ms Bligh said.
She particularly lauded the announcement to make permanent electronic transactions and virtual annual general meetings.
“It’s now vital that state governments follow suit and work together through the national cabinet to ensure state and territories laws are consistent and enable consumers to conduct a range of everyday activities such as electronic mortgages,” Ms Bligh said.
Ms Bligh went on to welcome the government’s funding for implementing and expanding the Consumer Data Right for open banking, adding that the ABA “looks forward to working with the government to deliver the changes”.
[Related: ACCC delays non-major CDR obligations]
Annie Kane is the editor of The Adviser and Mortgage Business.
As well as writing about the Australian broking industry, the mortgage market, financial regulation, fintechs and the wider lending landscape – Annie is also the host of the Elite Broker and In Focus podcasts and The Adviser Live webcasts.