Space stations and drones galore! With the release of the Federal Budget this week, it looks as if Australia is finally waking up to the wondrously innovative, and immensely profitable, world of technology.
In the frenzied media hype that follows the budget’s release, technology is an area that is often overlooked. Usually the news is plagued with discussion about income inequality, housing affordability and the ‘kitchen table budget’ of working families, as Treasurer Scott Morrison put it.
And with the coalition proposing income tax cuts, worth over $140 billion in the next decade, plus a reduction in the number of tax brackets, there is plenty to talk about.
However, I’ll leave the specifics of the tax cuts alone for now, and instead focus on the boost for Australia’s science and technology space.
Because in the coalition’s proposed budget, Australia’s technology industries are truly in for a treat.
A treat worth $2.4 billion, to be exact.
Kicking off with a bang, the government is proposing to spend $41 million on the space industry. Which, notably, will include $26 million to begin building Australia’s very own National Space Agency.
Australia is the only OECD (Organisation for Economic Co-operation and Development) country still without a space agency. So bringing Australia onto the global space scene is a step in the right direction for our economy and the proliferation of jobs.
As the space industry is worth $340 billion globally, this is an investment that the budget is certain will ‘drive investment, create jobs and continue Australia’s participation in the global space economy.’
In addition, another $15 million will be dedicated to the International Space Investment project, which will work to provide grants to space projects.
This is a move that many are predicting will spark the beginning of commercial space travel. Which, if achieved, is incredibly exciting not only for investors…but for those of us (hopefully all) who still have a child-like curiosity about the universe.
Moving on to technology, $140 million will be put towards supercomputing, which is double the $70 million commitment in last year’s budget.
What will this government funding achieve?
From this funding, a long list of tech projects are set to benefit. As Scott Morrison listed off:
‘World class satellite imagery, more accurate GPS across Australia, upgrading the Bureau of Meteorology’s technology platform, a national space agency and leading research in artificial intelligence.’
The 29.9 million that will be invested into AI and machine learning is an interesting one. The goal is to spike innovation across health, energy, mining, agriculture and cyber security — revolutionising key industries, and allowing Australia to keep up with the unfurling global trend of automation.
Meanwhile, $700,000 will be devoted to the research and development of blockchain technology. Again, the coalition has said this spending will be the key that unlocks the mysteries of the blockchain, and enables the government to take full advantage of the opportunities it provides. This could result in a new way of voting, registration and making payments.
In a similar vein, the budget has also pledged $2.9 million to the Civil Aviation Authority, which will increase safety standards for the use of drones in Australia.
Mainly though, the budget is dedicated to tech research and development at large. $1.9 billion of the total $2.4 billion will be put towards establishing Australia as a leading tech innovator. As the Minister for Jobs and Innovation, Michaelia Cash, confirmed in a statement:
‘Technological breakthroughs [like] wi-fi … have roots in our globally recognised research infrastructure. This funding will ensure ground-breaking research continues and that researchers and industry have greater access to cutting-edge facilities.’
With all the lights now shining on the sectors responsible for world class innovation, now is a great time to be an Australian tech investor. Australia is finally entering the 21st century, after stubbornly lagging behind leading technology pioneers like the USA and Japan for decades.
If you’re not already, now is the time to start following the tech space. It’s already buzzing with opportunities for savvy investors who have been able to remain ahead of the curb.
That said, it can be daunting task to sift through the forerunners of tech and predict the winners. To get a head-start, you can check out our newest publication Wealth Eruption, which was created to do the hard work for you. To find out WE’s latest recommendations, click here.
This week in Markets & Money:
The Stormy Daniels saga is, among other things, predictable. Donald Trump’s extra marital affairs came as a surprise to no one. In fact, people would have been more surprised if he had remained faithful. And as Vern wrote on Monday, the debauchery that is being uncovered by the banking royal commission is no different. While people weren’t shocked to find that the banks were going to great lengths to make profit, this misconduct may have unintended consequences for our financial system at large…
To learn what those consequences are, click here.
Many often underestimate the impact of weather. It can dampen moods, ruin vacations and result in the postponement of events. So how great would it be to be able to control the weather? As Selva wrote on Tuesday, China is attempting to do this very thing. And if they’re successful, China could be on the way to producing large-scale artificial rain in the next decade.
To learn how they plan to achieve this feat, click here.
Then on Wednesday, Selva dove into interest rates. Namely, that they have never been so low for such a prolonged period of time. Although low rates helped to boost the economy after the 2008 financial crisis, they have also contributed to low salary growth. As Selva argued, these continually low rates punish savers while rewarding those taking on more debt. And when we look at the charts that depict the rising levels of household debt, perhaps it’s time to reconsider keeping rates so low…
To read the full story, click here.
Most people know about the FAANG index, which includes Facebook, Apple, Amazon, Netflix and Google. These tech giants are integrated into many important aspects of our lives, and seem to be seeping into more and more. But as Selva wrote on Thursday, there’s another up and coming index that may prove to be even more valuable to investors…
To find out what it’s called, click here.
Then on Friday, Selva predicted that we would soon be seeing higher oil prices. As we’ve all heard, the US has abruptly decided to pull out of the Iran deal. By reimposing crippling sanctions on Iran, we will likely see a drastic increase in the price of oil per barrel…
To find out how much the price may likely end up being, click here.
Until next week,
Editor, Markets & Money