MYEFO: Procurement, small business counselling and the digital economy get funding boost

The federal government plans to spend $2 million over the next four years to further improve the participation of small and medium businesses in Commonwealth procurement. 

Included in Thursday’s Mid-Year Economic and Fiscal Outlook, the additional funding will partly go towards developing a digital platform, which the government says will “streamline and enhance” access to tailored events for SMEs. 

According to the MYEFO statement, the measure builds on a suite of procurement-focused initiatives included in the 2021 federal budget in May, and will be partly funded from existing resources within the Department of Industry, Science, Energy and Resources. 

In the May budget, the government said it intended to spend $2.6 million over the next four years on SME procurement, which it would achieve in five ways. This included increasing the communication of procurement opportunities to potential SME suppliers, ‘scanning’ procurements to identify common “pain points” for SMEs, and hosting targeted events for SMEs.

At the time, the government said it will also make the use of Dynamic Sourcing for Panels mandatory, to improve the use of panel arrangements, and the Department of Industry will trial a direct engagement approach with SMEs for contracts worth up to $200,000.

While progress has been made in recent years as the percentage of Commonwealth tenders awarded to SMEs has increased, industry advocates continue to call for more to be done. 

Writing in SmartCompany this week, Peter Strong, the former chief executive of the Council of Small Business Organisations Australia said improving the procurement process is vital to building the nation’s manufacturing capacity and addressing current supply chain pressures. 

More support for small businesses

The mid-year budget also extends a number of support programs for SMEs, including those in regional areas that have been affected by COVID-19 and natural disasters. 

The government has pledged an additional $8.6 million over the next two years to extend its Regional Small Business Support (RSBS) program, which offers free financial counselling to small businesses that are experiencing, or likely to experience, financial hardship as a result of the pandemic, bushfires or droughts. 

Separately, the government says it will also provide an extra $6.9 million in 2022-23 for “recovery and resilience advice services” for regional businesses affected by COVID-19, bushfires and floods. 

As part of a $111.9 million funding package for the Treasury portfolio over the next four years, the Australian Taxation Office will receive $8.6 million to help with the administration involved in delivering business support programs, and the office of the Australian Small Business and Family Enterprise Ombudsman will share in $23.5 million funding, which will also go towards core capabilities of the Treasury and reforms related to the payment system and crypto assets. 

The ATO will also receive $42.4 million over the next two years to modernise its IT systems. According to the MYEFO statement, this will include strengthening the tax office’s data-matching capabilities and its ability to pre-fill tax returns via MyGov. 

The government has also provided for $29.1 million in funding for its Modern Manufacturing Strategy, including $18.8 million for its Industry Growth Centres, although this is not new funding and will come from existing departmental resources. 

Extra funding for tech and the digital economy

The MYEFO update includes a raft of tech and digital-related spending measures, including an injection of $252.5 million into the federal government’s digital economy strategy. 

The strategy, which received $1.2 billion in funding in the May budget, aims to turn Australia into a leading digital economy by 2030. The new funding will be shared across a number of priority areas and includes $160.9 million over two years for the government’s digital identity scheme, as well as $27 million for the Office of the National Data Commissioner and $2.8 million to improve access to government data via the data.gov.au website. 

The government will add another $58.8 million in funding over four years to the Digital Transformation Agency (DTA), along with $17.5 million annually to the DTA for “enhanced digital and ICT oversight and advice”. 

It also plans to expand the digital games tax offset, which was announced earlier this year. 

The expansion will cost $19.6 million over two years and mean the offset will cover qualifying expenditure on eligible games following their release to the public, from July 1, 2022.