Budget 2021: Australia's struggling video gaming industry gets a huge tax break

Young Australians will be offered ‘digital skills cadetships’ under a new trial to help solve a shortage of home-grown software engineers and programmers.

The government will spend $10.7million on four trials which will see school leavers take a three-to-six-month training course while working with a tech business.

The aim is to help fill an estimated 30,000 new positions for software and applications programmers that are expected to be created by 2024.

Young Australians will be offered ‘digital skills cadetships’ in a policy outlined in the federal budget

The government will also spend $22.6million over six years on funding 234 national scholarships in emerging technologies such as robotics, automation, cyber security, quantum computing, blockchain and data.

The policies will be included in the May 11 budget alongside a series of measures worth a combined $1.2billion to boost the nation’s digital economy.

Among them is a 30 per cent refundable tax offset for video game developers, designed to help Australia compete in the rapidly growing sector.

The global video game development industry is worth $250billion a year – but Australia’s share of that is only $144million – a far lower figure than in the UK, Canada and even New Zealand.

With the huge tax break, similar to incentives already available in other countries, it is estimated that Australia can generate a $1billion games industry within ten years.  

The government is also spending $53.8million to create a National Artificial Intelligence Centre in preparation for the ‘robot revolution.’

A 30 per cent refundable tax offset will be offered for video game developers to help Australia compete in the rapidly growing sector. Pictured: A gaming competition in France in 2019

Four further AI and Digital Capability Centres across different parts of Australia will be set up to focus on a specific applications of AI, such as robotics or AI assisted manufacturing. 

The budget will also set aside funding for drone development, including $1.6million for a national Drone Rule Management System to set up low-altitude airspace rules and restrictions on drones and other low-altitude aircraft. 

The Prime Minister will launch the Digital Economy Strategy at a speech to the Australia-Israel Chamber of Commerce in Melbourne on Thursday.

He will say: ‘One of our biggest challenges and opportunities turns on how we respond to the digital transformation occurring in every sector and every facet of our lives.

‘Every business in Australia is now a digital business. The tradesman or woman who seeks work through AirTasker. The landscaper who finds most of their new business through search engine placement and social media. 

‘The farmer who keeps track of their herd with electronic tags or drones. The local Thai restaurant that sells through UberEats, MenuLog, Deliveroo, or any one of half a dozen different food apps. The gym where members book their classes through an app. 

The Prime Minister (pictured) will launch the Digital Economy Strategy at a speech to the Australia-Israel Chamber of Commerce in Melbourne on Thursday

‘This transformation is not merely a national one that needs to happen – it’s a global one that is happening.’

‘We must keep our foot on the digital accelerator to secure our economic recovery from Covid-19.’

Treasurer Josh Frydenberg said a vibrant digital economy is key to Australia’s economic future.

‘Our Digital Economy Strategy will allow Australian businesses to capitalise on the opportunities that digital technologies are creating,’ he said.

‘Greater digital adoption will improve our competitiveness and lift our productivity – driving job creation and higher wages.’