Australia to shore up cyber and digital capabilities in Budget 2023

Australia is spending more than A$2bn to strengthen cyber resilience, improve digital government services and fuel AI adoption, among other areas, in its latest budget

With significant and targeted investments in digital and ICT capabilities totalling more than A$2bn, Australia’s 2023 federal budget has plenty for the IT sector to digest.

The fact that the government’s agency resourcing budget paper started off with priorities in data protection, cyber security and tech industry development was telling.

Stronger privacy protection

In the light of recent high-profile and large-scale breaches, it is not surprising that the federal government is putting money into stronger privacy protection and enforcement.

Some A$45.2m will go mostly to the Office of the Australian Information Commissioner (OAIC) to support a standalone privacy commissioner, continue investigations and enforcement action in response to privacy and data breaches, and enhance its data and analytics capability.

Jacqueline Jayne, security awareness advocate for Asia-Pacific at KnowBe4, noted that protecting personally identifiable information (PII) being held by multiple organisations both locally and internationally has been a hot topic.

But in addition to PII, Jayne said there is also metadata being created and used, sometimes without the knowledge of data owners, by multiple entities for various reasons. “In simple terms, all of this data is incredibly valuable and, in some cases, if the wrong people get hold of this data, the results can be devastating,” she said.

In a related move, the Office of the eSafety Commissioner will receive an additional A$134.1m over four years to enhance its educational, outreach and investigatory activities.

Doubling down on the fight against scam

The fight against scams has attracted A$86.5m in funding, with the bulk of it going into the establishment of the National Anti-Scam Centre within the Australian Competition and Consumer Commission. The centre’s role will be to improve scam data sharing across the public and private sectors, and to establish partnerships targeting specific scam issues.

Another A$17.6m has also been allocated to the Australian Securities and Investments Commission (ASIC) to take down investment scam sites (with the cost to be recovered via industry levies), and A$10.9m to establish the eagerly awaited SMS sender ID registry that will make it harder for scammers to spoof industry and government brand names in text message headers.

“It is encouraging to see the government allocating A$86.5m to establish a National Anti-Scam Centre as well as boosting ASIC’s work to disrupt investment scam websites and establish Australia’s first SMS Sender ID Registry to prevent scammers imitating trusted brand names,” said Murray Mills, head of cyber security at Tecala.

“SMS scammers and their impact on citizens losing life savings from these SMS scams are out of control. With this initiative, the government can now start to increase security around the critical service providers, ensuring that we are less likely to encounter the degree of SMS scams we currently endure. We look forward to this being just the start and seeing this service expanding to all critical services,” Mills said.

Broadening reach of digital ID

The next stage of the Digital ID programme will be funded to the tune of A$26.9m. Most of this will go to the department of finance and the Digital Transformation Agency to maintain the current Digital ID system and prepare for a transition to an economy-wide Digital ID ecosystem with an independent regulator, plus A$1.1m for the OAIC to provide ongoing privacy assurance for the Digital ID programme.

It is very encouraging to see the government’s incremental investment in cyber security to help protect the innovation and capabilities of our citizens, businesses and federal agencies. This aligns strongly to the development of a strong and credible sovereign ecosystem, a critical outcome from the recent pandemic
Nathan Knight, Hitachi Vantara

“The government initiatives announced in this budget are the first steps to centralising our identity and reducing the requirement for entering so much of our personal data into so many organisations. I am looking forward to this being expanded once proven to all services, so that individual companies are no longer in possession of our sensitive data,” said Mills.

In a related area, running the myGov platform has a budgeted cost of A$134.5m for the coming year, including the operation of digital credentials such as the Medicare Card within the myGov app.

The government said: “[We are] committed to delivering a world-class, people-centric, secure platform to provide Australians with easy access to the government services they need and the confidence their data is safe.”

The budget’s contingency reserve includes provision for further funding for myGov that may be deemed necessary in the light of a user audit to assess the user experience, functions, and performance of myGov.

Matthew Ball, managing director at Granicus in Australia and New Zealand (ANZ), looks forward to the government’s response to the user audit report, and hopes to see further investment to deliver on its recommendations to rebuild myGov into a more cohesive and accessible interface.

Improving Australia’s cyber security posture

Turning to cyber security more generally, the government plans to spend A$101.6m over five years in this area. Almost half – A$46.5m – will go to towards establishing the Coordinator for Cyber Security, which will be charged with ensuring the government’s cyber security efforts are “strategic, coordinated, timely and effective”.

The small business cyber wardens programme administered by the Treasury and delivered by the Council of Small Business will cost A$23.4m over three years and aims to help small businesses build their in-house capability to guard against cyber threats.

David Hayes, regional director at Arctic Wolf in ANZ, said: “With two-thirds of businesses having experienced a security breach in the last year according to our ANZ cyber security survey, it’s clear that cyber security is a national concern and priority. As SMEs continue to feel more pressure from the current macroeconomic environment, threat actors recognise that this is the perfect time to strike.”

He added that the funding package for Australia’s new national cyber security office comes at a critical time to support SMEs in building their resilience against cyber threats.

“Since these types of incidents can significantly impact businesses through a financial, reputational and regulatory lens, seeing a stronger relationship between the public and private sector is more critical than ever,” he said.

Some A$19.5m will also be spent in the coming year on improving the security of critical infrastructure assets, and A$12.2m on sustaining the cyber resilience of Commonwealth entities.

Nathan Knight, ANZ managing director of Hitachi Vantara, said: “It is very encouraging to see the government’s incremental investment in cyber security to help protect the innovation and capabilities of our citizens, businesses and federal agencies. This aligns strongly to the development of a strong and credible sovereign ecosystem, a critical outcome from the recent pandemic.”

Elliot Dellys, CEO of Phronesis Security, called for the government to provide direct support to new cyber security startups to fuel local innovation and nurture the development of sovereign capabilities, a point that was also made by Pieter Danhieux, co-founder and CEO of Secure Code Warrior.

Danhieux said: “To remain competitive, we must also invest in developing our homegrown solutions and talent. To that end, it has been incredibly disappointing to observe organisations like AustCyber – once a strong pillar of Australia's cybersecurity community – slowly transform into something ineffectual, with little to no influence on the industry at large.

“The recent closure of the Cyrise Accelerator programme is also a worrying sign for the future of our cyber security startups. With proper funding, our cyber capabilities can rival those of the top players in the industry, yet the government appears to be letting us rot on the vine. It is simply baffling in the wake of our worst year on record for cyber attacks.”

Boosting public service capabilities

Given concerns about the way the use of external consultants and specialists has hollowed out the public service’s capabilities, the government has allocated A$18.5m over two years from the Australian Public Service’s (APS) $25m Capability Reinvestment Fund to help restore those capabilities.

While 43% of the total spending on external labour in 2021–22 was on ICT and digital solutions, it is not apparent how much of the expenditure this year will be directed towards IT capability.

Australia has global strengths in critical technology areas like quantum, AI and robotics, and the measures announced in the budget will support our tech companies to commercialise and scale globally
Kate Pounder, Tech Council of Australia

Ball said a key priority for the government’s investment in the public service will be rebuilding technology skills and expertise, and offering attractive and competitive employment conditions to ensure government can continue to modernise and deliver on its promises.

“When it comes to digital government, the APS requires not only the skills to build digital services but also to assess solutions and proposals from external providers,” he said.

Modernising healthcare IT

Among the various allocations for healthcare and agency IT projects are A$31.4m to complete the National Disability Data Asset. A bigger ticket item is A$429m to modernise My Health Record and improve health care data sharing.

Ben Cowling, executive director of Civica in Asia-Pacific, said it is encouraging to see the government investing more in digital health initiatives, calling for more efforts to “use data in a more intelligent way across our health services, generating valuable insights that can inform decision-making, ultimately resulting in improved patient outcomes and cost-effective healthcare.

“By leveraging data-driven approaches, the healthcare system can optimise operations and enhance patient care, making the most of this substantial investment in digital health.”

Fuelling quantum and AI adoption

The IT sector will be a major beneficiary of the A$116m being directed to support the development of critical technologies in Australia to drive economic growth, boost technology industries and support the creation of new jobs.

Noting that “critical technologies are key to driving Australia’s future prosperity”, the government has earmarked A$101.2m to help businesses adopt quantum and artificial intelligence (AI) technologies.

The funds will be directed to a critical technologies challenge programme with an initial focus on quantum computing projects and further supporting the National AI Centre with a focus on responsible AI.

An Australian Centre for Quantum Growth will also be established to support the growth and commercialisation of Australia’s quantum industry, along with a programme to drive the adoption of AI by SMEs to improve business processes and competitiveness.

“Australia has global strengths in critical technology areas like quantum, AI and robotics, and the measures announced in the budget will support our tech companies to commercialise and scale globally,” said Kate Pounder, CEO of the Tech Council of Australia.

“The government’s investments in quantum and AI, including the new national challenge programme for quantum computing and the A$3.4bn Advanced Strategic Capabilities Accelerator in the defence portfolio, are important initial steps towards achieving the vision set out in the recently released National Quantum Strategy,” she added.

Andrew Winlaw, Amelia’s vice-president and ANZ general manager, noted for Australia’s AI investments to be successful, strategies need to be in place to measure the potential risks and outcomes.

“As our economy increasingly goes digital, transformation success has a direct impact on budget spending and community expectations. The more we spend on digital, the more the public will want to see results. Public sector agencies now have a good opportunity to showcase how well they will support AI initiatives and manage project spending by communicating their strategies to measure outcomes,” he said.

But Barb Hyman, CEO and founder of, noted that given the budget’s sharp focus on addressing cost of living concerns, it is reasonable that it is not a budget for the tech sector or innovation.

“On any other topic, it’s right not to complain when thousands of Australians will be better off due to funds put towards welfare and support,” she said. “But we can’t stress enough – as an AI company ourselves – that this innovation is time-sensitive. By the time it’s a focus globally, it will be too late. There is a reason companies like Google, Amazon and Microsoft aren’t slowing down their progress despite ongoing debate on the power and ethics of AI.”

Tech’s strategic importance to Australia

Taking a high-level view amid the mixed reactions to the budget, Simon Bush, CEO of the Australian Information Industry Association (AIIA), said the budget has a “welcome investment in a number of areas around cyber security uplift which is vital for our economy, including SMEs and funding to target scams and regulation around data breaches”.

“The budget importantly makes good on promises to change migration and skills settings so that high demand digital jobs and training is funded and supported, including assisting post-study work rights for Temporary Graduate Visa holders for in-demand skills and key sectors that the AIIA has been advocating,” he said.

Chris Vein, CEO of the Australian Computer Society (ACS), welcomed the spending to grow Australia’s critical technology industries, but urged the government to consider the strategic importance of the sector to Australia’s economy.

“With nearly a million Australians working in technology roles by the end of the year, more support and recognition for the sector is required. We will continue to work with the government to raise the importance of boosting the nation’s digital skills and capabilities,” he said.

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