Paul Fletcher (Bradfield, Liberal Party, Shadow Minister for Government Services and the Digital Economy) Share this | Hansard source

The Treasury Laws Amendment (2022 Measures No. 4) Bill 2022 contains schedules dealing with nine separate areas, and the majority of them give effect to policies committed to and decisions announced by the previous government, particularly in several recent budgets. I want to speak particularly about the digital games tax offset and the technology investment boost as two policies put into effect by the previous coalition government. The fact is that one of the KPIs, one of the key performance indicators, it would seem for ministers in the Albanese Labor government is the capacity to take credit in an entirely shameless way for decisions taken by and work done by the previous coalition government. There has been a lot of talk recently about how apparently prominent figures in the current government, such as the member for Watson and the member for Chifley, I think, have apparently been longstanding champions of the digital games tax offset. For years, apparently, they've been calling for it. That may be so; I don't know, I've not checked the record. I've never heard it, so it is possible they've called for it. But the simple fact is that they didn't deliver it. They did nothing to deliver it when Labor was last in government between 2007 and 2013—six years in which to implement and give effect to the digital games tax offset; six years but nothing. But now, apparently, the claims are made that they have been longstanding advocates for it, and this is the coming to fruition of a grand vision.

But in a rewriting of history, equal to that written about by George Orwell in Nineteen Eighty-Four, there is complete silence from ministers in the Albanese Labor government about the work actually done—the detailed substantive policy work actually done—by the previous Morrison coalition government to give effect to this outcome in terms of the digital games tax offset. In May 2021, the then Morrison government announced a $1.2 billion Digital Economy Strategy, with the aim of making Australia a leading digital economy and society by 2030. One of the key elements of that announcement was the digital games tax offset, and, as the communications minister at that time, I was very pleased to work extensively on this matter. The strategic thinking of the Morrison government was that Australia should have a much bigger share of the global market for digital games development, which is a $250 billion market.

I can say to you, Mr Deputy Speaker, from my work with my two research assistants on digital games, my 26-year-old stepson and my 14-year-old son, that when you look at the sophistication of many different digital games—Plants vs.Zombies is one that I spent a bit of time engaging inwith my 14-year-old son; it was a few years ago, and he's moved on beyond Plants vs. Zombies to Call of Duty and many others—these are very sophisticated, and there is huge take-up of digital games around the world.

Of course, many countries have a significant presence in the production and development of digital games. Both Britain and Canada have very significant domestic games development sectors. One of the ways those two countries have encouraged global digital games studios to either come to those countries or expand in those countries is through the use of tax offsets. So this is a well-known policy tool that is used in the digital games sector. Of course, it's also a policy tool used very extensively in the adjacent screen sector. Again, when the coalition was in government, we used this policy tool to give effect to a significant stimulation of Australia's screen sector by increasing from 20 per cent to 30 per cent the producer offset for productions for television. We had in mind particularly the extraordinary global opportunities when it comes to the streaming-video-on-demand sector.

So the point I make to the House is that the use of tax offsets is a well-known policy tool for sectors like screen production and digital games production, and the decision that the Morrison government took and announced in a previous budget to make available this digital games tax offset was a decision based upon a clear analysis of the global market opportunity for the Australian digital games sector and a clear analysis of the return—the benefit—that taxpayers would receive in exchange for making available this tax offset. This is what economists call tax expenditure, and it needs to be carefully considered. A dollar of taxpayers' money committed has the same economic impact whether it's an on-budget expenditure or a piece of tax expenditure. But we did go through that detailed policy work. We made that announcement in May 2021, and we then did the detailed policy work. Draft legislation was released prior to the May 2022 election, and there was a consultation period held between March and April this year.

I'm pleased to say the Australian digital games sector welcomed the measures that we announced our intention to legislate. I'm also pleased to say that, during the consultation process, there was some detailed work done on some further improvements and enhancements to the way the offset would work. In particular, the view was put by the industry that it's important that this offset is also available in respect of ongoing development work, known as live ops. Mr Deputy Speaker, as you'd be aware, that's the term used in the sector. So I'm pleased to say that the availability of this offset has been expanded to cover live ops.

The way the industry works is that a game is released and then it is further upgraded and developed, often in response to feedback from people who are playing the game. Games users are a very active and engaged community, and they provide their feedback very directly to games manufacturers. Australia does have a vibrant domestic games sector, and I had a chance to visit a number of digital games companies during my time as communications minister. The sector in 2021 generated revenue of around $226 million, and that was an increase of 22 per cent on 2020, but be in no doubt that the growth opportunity for the sector and therefore for Australia's economy is a very significant one.

I and the opposition certainly welcome the fact that the Albanese Labor government has eventually—in a disappointingly dilatory and leisurely fashion—got around to bringing forward this particular piece of legislation. All the work had been done for them; it was all bundled up and ready to go, and, six months later, they've yawned, rolled over, woken up and thought, 'Oh well, it might be a good idea to build on this outstanding policy work done by the previous government.' That's evidently the thought process that they've gone through, while, of course, being extremely careful to avoid providing any acknowledgement at all of the rigorous policy work done by the previous government. That's the way they roll. It's all about ignoring the work done by the previous government and taking credit for it. That's the house style and that's politics.

I'm going to rise above politics and say that this is a good outcome for the digital games sector. It's a good outcome for the Australian economy, and it reflects the detailed, sustained policy work done by the previous government. I was very pleased to have an involvement in that work in my previous portfolio, and I'm very pleased to maintain a continued involvement in these issues as shadow minister for the digital economy, a portfolio, I note, parenthetically, which does not appear in the Albanese Labor government's ministry list, which is a matter for regret, but, presumably, that's because they've received instructions from their union masters. I can only surmise that they don't like the idea of the digital economy.

I want to turn to one other schedule contained within this bill, which is the technology investment boost. Again, this was a measure committed to by the previous government—the coalition government—based upon the work we had done with a view to understanding policy levers that would incent businesses and the private sector to make appropriate investments in hardware and software, to allow businesses to better use digital tools and to operate more efficiently and productively, with a particular focus on small and medium businesses.

On our side of the House, we have an enthusiasm for measures which incent businesses to take business decisions which are in their own private interest but also produce a positive public policy outcome. We like to do that in a way which makes most effective use of taxpayers' funds. We don't like to establish large bureaucracies. We don't like to take the approach that the present government likes, which is to try to make as many decisions as possible in Canberra and to create giant funds which hand out money based upon decisions by government instrumentalities. That's not what we like to do. What we like to do is empower and incent private businesses to make decisions.

That's why we chose to use the policy tool of an additional tax deduction of 20 per cent of the cost of expenses and depreciating assets up to $100,000 of expenditure per year, available to small businesses with an annual turnover of less than $50 million. When you look at the range of eligible expenditure which can then attract this additional bonus 20 per cent tax deduction, it includes matters such as digital enabling items, computers, telecommunications hardware and equipment, software and internet costs, and the systems and services that form and facilitate the use of computer networks: digital media and marketing, and audiovisual content that can be created, accessed, stored or viewed on digital devices—including webpage design.

As we all know, there's been a huge boost in ecommerce as a result of the pandemic. Many businesses have expanded their ecommerce offerings. Many businesses that have previously been bricks and mortar only have now shifted to become clicks and mortar. That's to say they've got a digital delivery channel as well as a bricks-and-mortar channel, but we want to see more of it and we want to support businesses that are moving to respond to be the clear preferences of consumers to be able to purchase as much as they can online. Again, this is designed to give businesses an incentive. These are choices for businesses to make, because we believe that businesses, their owners and their managers know best about what their customers need. They know best about how to meet the market opportunities. We want to provide that support, encouragement and assistance.

We don't believe that Canberra knows best, and that is a difference between this side of the House and the Labor Party. You often hear people say today that there's no difference between the major parties. That's not right. We fundamentally believe in the importance of the private sector in generating prosperity and we fundamentally believe that business owners and managers know their market and know their customers much better than any bureaucrat or politician is going to. We want to provide that support, encouragement and incentive. One of the things we want to incentivise businesses to do is making as effective a use as possible of digital tools to serve their customers more efficiently, to streamline and automate business processes and to get their offering out into the marketplace so that customers and potential customers can see what kinds of products and services businesses have.

I add that we know that cybersecurity is a very significant issue. We've seen some troubling instances of data breaches. We know that small and medium businesses are concerned about this, and this, again, is a practical policy tool, because the 20 per cent bonus tax deduction is also available for cybersecurity systems for backup management and monitoring services to deal with cybersecurity issues.

It's a matter of regret that the current government has been rather leisurely in its approach to this. It's taken them quite a long time to bring this bill before the House, but I'm not going to take a political approach to this. I'm going to celebrate the fact that they finally got around to bringing this bill forward, and I do welcome what's contained in the two schedules I've discussed.

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