Turnbull shakes up government IT buying

Prime Minister Malcolm Turnbull has pledged to shake up how the government buys IT services in an effort to include startups and SMBs in government procurement.

The announcement was part of a $1 billion package to stimulate growth in the technology industry by supporting Australian innovation.

The federal government spends $5 billion a year on ICT services.

Inspired by the UK’s Seed Enterprise Investment Scheme, the government pledged to create a digital marketplace for government agencies to procure ICT solutions from small to medium-sized enterprises.

A statement on the government’s innovation website says the digital marketplace “will result in a broader base of suppliers being considered, more competition, more innovation, and more jobs".

It will break down large-scale ICT requirements into individual components to allow for a wider range of solutions to pitch to government buyers.

Buyers will also be able to search for services, identify suitable suppliers and procure the best value option for the project

The first prototype marketplace will launch in 2016.

Incentives will also be built into the tax system for small growth businesses - specifically technology startups.

The government is relaxing the insolvency laws to help startups that fail, bringing the default bankruptcy period down from three years to one year.

Speaking to ABC's 7.30 program last night, the Prime Minister called Australia's insolvency laws "very outdated".

"One of the failings in our insolvency laws is they don't do enough to promote business continuity – and this is one of the great strengths of the United States, for example, with their Chapter 11.

"So that when a business hits the wall from a financial sense, there is a much greater opportunity to restructure, bring in some new capital, change the management and keep the show going on and what that means is fewer jobs are lost, less money is lost, particularly by shareholders and subordinated creditors, and so it's very important," said Turnbull.

The government's new business research initiative aims to address public sector challenges with innovative homegrown business ideas rather than existing IT products.

The Business Research and Innovation Initiative is offering up grants up to $100,000 to identify issues with national policy and develop a solution over three to six months.

A further $1 million is on offer to fund a proof of concept or prototype over 18 months to take to market, with businesses maintaining the rights to their own IP.

'Ideas boom'

Turnbull’s first major economic announcement as Prime Minister included over $1 billion in technology funding grants including:

• $90 million funding injection to CSIRO. The scientific research agency suffered a $112 million cut in the 2014 budget.

• $36 million over five years to create a global innovation strategy, establishing five "landing pads" for innovation across Silicon Valley, Tel Aviv and three other locations.

• $200 million to support co-investment in spin-out start-ups from products and services created by Australian research institutions.

• $51 million over five years to establish ICT summer schools for years nine and 10.

• $13 million over five years to luring more women into STEM skills.

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