Australia’s 2025 Federal Budget prioritizes short-term voter appeal, neglecting vital structural tax reforms and AI investment. Industry leaders warn Australia risks economic competitiveness as global peers accelerate, highlighting critical gaps in tech, energy, and strategic vision.
Treasurer Jim Chalmers’ federal budget, strategically positioned ahead of the imminent election, emphasizes short-term voter appeal with tax cuts and modest support for small businesses. However, beneath these surface-level incentives lies a troubling absence of essential structural reforms critical to long-term economic resilience and productivity.
Measures such as the instant asset write-off, capped at $20,000 for businesses with turnover below $10 million and extended until mid-2025, provide minimal relief amidst escalating inflationary pressures. Crucially, structural tax reform—a vital component for enhancing productivity and easing the ongoing economic burden on small businesses—remains notably absent, revealing a significant policy gap.
Falling Behind in the Global AI Race Industry leaders express profound disappointment at the budget’s failure to address artificial intelligence (AI). Ben Thompson, CEO of Employment Hero, voiced the frustration succinctly:
"We're surprised—and frankly disappointed—to see nothing on AI… we can't afford to fall behind."
Echoing this, our CNC’s recent analysis starkly warns that "Australia risks falling behind as global players like France, Canada, and Singapore accelerate AI investment." Without decisive action, Australia may lose its share of the projected $826 billion global AI market by 2030.
The tech industry has expressed strong disappointment over the absence of any new artificial intelligence (AI) initiatives in the recent federal budget. Australian Computer Society (ACS) CEO Josh Griggs voiced significant concern, stating, "The nation is not positioning itself to capitalize on the transformative economic opportunities offered by artificial intelligence."
Kondara, a prominent voice in Australia's AI sector, lamented,
"It hasn't been a good day for Australia's AI industry. Despite tonight's Budget, we'll continue to drive innovation, support our clients, and create meaningful impacts with or without government support."
Australia's current inertia sharply contrasts the proactive approaches seen internationally. Under President Emmanuel Macron, France demonstrates how strategic leadership, driven by robust nuclear-powered energy infrastructure, can dramatically enhance national AI capabilities. Macron’s administration secured €109 billion in private AI investment—significantly backed by Saudi sovereign funds. Such comprehensive strategies underscore the importance of sustainable energy infrastructure in supporting large-scale, energy-intensive AI data centres—an essential component notably missing from Australia's policy landscape.
Singapore further highlights Australia's shortcomings, with Prime Minister Lawrence Wong committing S$150 million towards the Enterprise Compute Initiative, complemented by a S$1 billion Private Credit Growth Fund, significantly boosting national cybersecurity and AI competitiveness. Australia's modest $76 million AI funding from the 2024 budget underscores an alarming retreat, jeopardizing competitive advantages.
Yet, private sector leaders signal they will not wait indefinitely for government action. Karl Kloppenborg, CTO of ResetData, emphasized the urgent need for sovereign AI infrastructure:
"Without strategic investment in homegrown AI, we won’t be exporting capability—we’ll be importing it. And with that, we’ll be exporting something far more valuable: our sovereign data."
One glaring budget omission is investment in high-performance computing. Professor Chennupati Jagadish, President of the Australian Academy of Science, articulated this clearly: "The vital infrastructure of today is supercomputing—not just roads and rail."
Despite significant funding for traditional infrastructure, critical research and industry sectors continue to depend on outdated systems, hindering progress in medicine, climate modelling, and advanced manufacturing. The Academy's proposal—a 10-year, $200 million annual national strategy—remains unfunded, highlighting a striking lack of strategic vision.
Australia's energy policy further compounds the situation, narrowly fixated on short-term gas distribution rather than sustainable, renewable energy solutions. Liberal Minister for Energy Ted O'Brien criticized the government's approach sharply:
“Labor created this crisis through reckless intervention and ideological hostility toward gas. Instead of fixing the problem, they’re scrambling to shift the blame.”
Without meaningful structural investment in sustainable energy infrastructure, Australia faces imminent energy supply shortfalls, escalating costs for households, and burdensome operational costs for businesses. Moreover, the lack of substantial renewable energy infrastructure constrains the development of high-powered data centres required for next-generation AI systems.
The geopolitical context amplifies these vulnerabilities, especially amid the return of a Trump-led U.S. administration. Treasurer Chalmers subtly acknowledged these growing threats, referencing "storm clouds" and international "tensions," yet the budget lacks concrete strategies to mitigate these risks through technological and energy independence.
The 2025 Federal Budget delivers immediate political benefits at the expense of essential long-term structural reforms and visionary investments.
Industry leaders and innovators are issuing an urgent call, pressing the government to implement integrated energy policies and make significant investments in advanced technology infrastructure. They envision a future where renewable energy innovations drive an AI-powered economy, supported by agentic systems—intelligent, self-managing technologies that bolster productivity, ensure data sovereignty, and strengthen security resilience through enhanced technology hubs.
This trajectory, extending Australia’s global competitiveness through 2035 and beyond, is not a distant hope but an immediate necessity. As the election nears, a growing rift emerges: many in the business community feel neglected by the Labor-led government, its recent budget failing to address their priorities and eroding confidence in its leadership. With the vote looming, the electorate holds the decisive influence—unless the current government takes action, it risks a clear vote of no confidence from those driving the nation’s future.
Tariffs on tech imports remain in flux as the Trump administration shifts its stance yet again. Mixed messages, steep levies, and retaliatory tariffs from China have left U.S. businesses and consumers caught in the crossfire of an increasingly chaotic trade strategy.
As U.S. tariffs reshape global markets, insights from the All-In Podcast reveal a clash between patriotic optimism and economic reality. Tech elites push for Made-in-America revival, but blind spots in their vision risk weakening the very innovation and investment they champion.
As Trump extends TikTok’s deadline, a collapsed deal, soaring tariffs, and geopolitical tension take center stage. With 170 million U.S. users and growing stakes, the app’s future now sits at the heart of a global power struggle.
The global data centre boom is faltering as credit risks, rising tariffs, and capital costs take hold. Valuations have dropped by as much as 40%, projects are being delayed or cancelled, and hyperscalers are stepping back from long term deals as the sector undergoes a major reset.
