Morrison pledges $800 million to digital overhaul of government-business relations

By Matthew Elmas

Tuesday September 29, 2020

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The way government interacts with businesses and individuals will change drastically under a $800 million digital transformation package being announced by Prime Minister Scott Morrison today.

In a push to kick start supply-side reforms in the lead up to the federal budget next week, the federal government has pledged to streamline business registers and expand the Digital Identity Program, which will improve access to services like myGov.

Under the plan, federal government agencies will also be required to adopt electronic invoicing by midway through 2022 at the latest, which will enable five-day payment times to businesses.

Morrison said the policy package reflected an acceleration in adoption of digital technologies brought on by the COVID-19 pandemic.

“The plan supports Australia’s economic recovery by removing out-dated regulatory barriers, boosting the capability of small businesses and backs the uptake of technology across the economy,” he said in a statement.

Expansion of the Digital Identity Program

A total $256.6 million has been committed to expanding the opt-in Digital Identity Program, which is progressively simplifying identity verification across the APS, allowing digital services to operate more effectively for individuals and business users.

Supported by the Digital Transformation Agency (DTA), improvements in digital identity verification were a recommendation made by the independent APS review late last year.

The new funding will enable a rollout of digital face verification capabilities, allowing taxpayers to prove who they are to government services without necessarily needing to confirm in person.

It will also finalise the integration of the digital identity program with myGov and onboard 14 new government services into the scheme, including Director Identification Numbers (more on that below).

Currently, more than 1.6 million individuals and 1.16 million businesses have opted in to participate in the digital identity program, which provides access to 70 different government services.

There are six key parts to the digital identity ecosystem that underpins the program, including cross-departmental efforts by the Australian Taxation Office and Services Australia.

Funded: an overhaul of business registers

A further $419.9 million will be outlaid in the budget for an overhaul of Australia’s business register system, a previously announced package of reforms that will consolidate the Australian Business Register and more than 30 separate lists overseen by corporate regulator ASIC.

Originally flagged in the 2018-19 budget, these changes will allow businesses to streamline their interactions with government services and regulators, aimed at providing a one-stop repository of information.

This will significantly change the way most Australian businesses interact with federal government agencies, allowing regulators to track company directors through an integration of director identification numbers and the digital identity program.

These director identification numbers were legislated earlier this year, making it much easier for directors to start a business while also empowering regulators to watch business owners themselves rather than companies – a keystone in the fight against illegal phoenixing operations.

E-invoicing: deadline set for APS

As part of its digital transformation plans, the federal government wants the APS to enable digital invoicing by July 1 2022 at the latest, while large agencies will be required to enable e-invoicing from July 1 2021.

Among other things, this will enable the government to pay business suppliers within 5 days of an invoice being issued.

The Commonwealth will also engage state and territory governments to see whether they’re also willing to commit to ensuring they enable e-invoicing by July 1 2022 and pay contracts up to $1 million within 5 days.

E-invoicing has been spruiked as a big opportunity for the Australian economy over the next few years, addressing late payment times, which is a particularly thorny issue for SMEs.

Treasurer Josh Frydenberg said the entirety of the government’s $800 million package was slated to deliver sizeable economic dividends over the forward estimates.

“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,” Frydenberg said in a statement.

“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 remainder of the funds in the funding has been set aside for business support programs to encourage companies to adopt digital technologies and to accelerate the take-up of 5G internet services across the private sector.

The federal government has also promised two industry pilots to explore how blockchain technology could be utilised to reduce regulatory compliance costs for business users.

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