Slade Brockman (WA, Liberal Party) Share this | Hansard source

I rise to speak on the Treasury Laws Amendment (2022 Measures No. 4) Bill 2022. I was just going to focus on one area, as I suspect many of us perhaps have been doing. Before I get started on that, though, I do think it's important to address some of the misconceptions and/or overreach that we are hearing in this debate about loot boxes. I will say that in my younger life I was a gamer, possibly the first or maybe the second generation of video gamers to ever exist. I know my way around a video game, though I'll leave that up to my kids these days. But the mere consideration of a random choice is a very low threshold to set for gambling. That would make a lucky dip gambling. That would make a lotto wheel, where you win a frozen chook at your pub, gambling. That's a very, very low bar. Just because it's in the digital realm, I'm not sure why merely having consideration for a random choice is gambling.

I'm a strong believer in parental controls, as people in this place know. I have three young kids, and I absolutely believe in parental controls, particularly on devices. I absolutely believe that parents should be able to control expenditure on devices and in games. I believe we should have age-appropriate games and that the classifications should reflect that. But this approach of tagging everything that is effectively randomised in an online environment as being gambling, I think, fundamentally misunderstands gaming. There is inevitably an element of randomisation in gaming. That is what makes games games. If games were on train tracks all the time and there were no randomisation, then they would stop being games.

I know, certainly, in my young life down at the farm we spent many, many hours playing card games—not for money, but they were gambling games. We played poker. We played rummy. We even played solitaire. Solitaire started off as a gambling game. And Monopoly—is Monopoly gambling? I mean, it's for money. When we were young, my sisters and I managed to somehow lose all the money out of the Monopoly set very early on. I'm not quite sure how that happened. I have no real memory of it; I just blame my sisters! But then we used 1c and 2c coins. Does that suddenly fall into the category of gambling because real money was involved?

I think we've got to be very careful not to enter the realm of demonising particular aspects of video gaming merely because they have some passing association with gambling or a random chance. I don't think that shows an understanding of the nature of video gaming. The industry must take a very responsible perspective on this. As I say, I am a strong believer in the importance of age-appropriate games, parents being given the tools by which they control both the amount and the types of games that children interact with and, if there is any financial aspect to those games, parents certainly having control over that.

I do wish to get to the bill, however. This is an omnibus bill, and I'm going to focus on one particular area. But it is important to note that this brings together a number of outstanding coalition commitments from the March 2022 budget, including the tech investment boost, the skills and training boost and the digital games tax offset. The coalition supports most of the measures in the bill, as they replicate the policy we took to the last election. I wish to just focus on one of those because it is important to know that it relates to a very important industry for Australia. It's a small but growing industry in my home state of Western Australia, and that is the digital games industry. Of course, I'm talking about schedule 1 of this bill, the digital games tax offset.

As part of the previous government's Digital Economy Strategy, in May 2021 the then government announced a 30 per cent refundable tax offset for eligible businesses that spend a minimum of $500,000 on qualifying Australian development expenditure from 1 July 2022. In the 2021-22 Mid-Year Economic and Fiscal Outlook, the coalition government provided an additional $19.6 million over two years, from 2023-24, to expand the digital games tax offset to include ongoing development work—known as live ops—on digital games following their public release. Draft legislation was released prior to the election, and a consultation period was held between March and April this year. These measures received widespread support from the Australian digital games industry when first announced by the coalition—support which remains today.

The measure also aligns with the coalition's continued policy focus on growing our technology and digital sectors in a very, very competitive global environment. The digital games sector continues to expand rapidly. Worth $240 billion globally in 2020, the market is set to reach $294 billion in 2024. Australia is home to a growing games industry. In 2021, the sector generated $226 million in revenue, an increase of 22 per cent on 2020, and 83 per cent of revenue is from overseas markets. So this is a big export earner for this country.

Using tax offsets is a proven method, which countries such as Canada and the UK have used to increase the size of their digital games industry. The Digital Games Tax Offset will help Australia become a global player in game development. The local industry has already seen investments worth more than $270 million since late 2020 and has the potential to grow into a billion-dollar industry within the next 10 years. In addition to direct economic benefit, games production can add a range of talent and skills that are transferable to other areas of the economy.

I'll give you an idea, again, of the scale of this industry in Australia. It is a small industry, and remember that we are growing off a very low base in Australia, but we did see, according to the industry association IGEA, $284.4 million of income generated by Australian game development studios in 2021-22. This increased by 26 per cent over the previous year, an extraordinary rate of increase. There are 2,100 full-time employees. That is small in terms of the overall economy, but these are high-paying tech jobs, which are obviously of great benefit across the economy in terms of skills transfer and development and keeping talented people in this country who may have, in previous decades, had to go overseas to find opportunities in this sector. So we see there an increase of 59 per cent of professionals in the industry over a one-year period.

We can see that this really is an area that could move into the future if we get the settings right, if we can encourage the talent and if we can encourage businesses to see Australia as being a good point to host their development work—we could really see this industry grow over the years ahead. Sixty-nine per cent of studios are planning to hire new staff in 2022-23. If that is reflected in reality, this would mean that we would see something like more than 300 new staff enter this industry. Again, it is from a low base, but these kinds of growth rates really do augur well for the future.

So 47 per cent of respondents in the survey of their members are projecting significant growth in income, and 27 per cent of respondents are projecting a growth in their income over the next year. Eighty-five per cent of respondents to the IGEA survey are developing their own IP within Australia. So here we have games companies actually owning the intellectual property rights to the material that is being developed in this country. Obviously, again, that offers great opportunity for export dollars if some of those particular IP developments end up being used elsewhere. Even if they're used with a larger company overseas who can perhaps get to a much larger audience, we can see those benefits flow back through those IP arrangements to the Australian industry. So that is very important.

And this is an export focused industry. I've stood up in this place a number of times and spoken about the export focused industries that are close to my heart—in terms of mining, oil, gas and agriculture—but this is an export focused industry as well. It's one where we look to massive overseas gaming markets for the material and the unique perspective that Australian games can bring to those markets. So this is an industry with a very bright future. As I say, I was one of those young blokes in, I think, 1982, who was pretty taken by the Commodore 64, and, yes, I spent far too many years, when I should've been studying at high school, in front of a computer screen. But it was a very enjoyable part of my life.