Federal government wants to spend $900 million of annual tech budget on small “entrepreneurial” players

The federal government wants to allocate 10% of its $9 billion annual tech budget toward small “entrepreneurial” players in the market, says federal assistant minister for digital transformation Angus Taylor.

Speaking at a media event in the Blue Mountains, in New South Wales, Taylor said he wants to shift $900 million of public sector tech work away from giants like IBM and towards small to medium enterprises, Business Insider reports.

“The government can support innovative companies without resorting to handouts,” Taylor said.

“If we want to transform the entrepreneurial or digital government sector in Australia, the most important thing we can do is be a better customer.”

Taylor said the government’s digital marketplace will play a key role in smaller businesses and startups winning more government work.

“Let’s face it — the panel process, which the digital marketplace is seeking to break down, are a big barrier to smaller, innovative companies getting access to government contracts,” he said.

“A necessary condition for getting SMEs involved is doing smaller projects.

“We want to do smaller projects, because the risk is lower, they’re easier to manage, and if they get into trouble they’re easier to deal with.”

Earlier this year, Taylor said the 10% shift in budget would amount to a “$500 million boost”, when he announced the Digital Transformation Agency would be undertaking an internal review of major ICT projects for government, including those valued over $10 million or those that provide services that affect a large part of the Australian population.

Read more: DTA plans to open door for smaller ICT companies to work with government through “$500 million boost”

“We’ve said we want a 10 percentage-point increase in portion of government work that goes to smaller providers,” Taylor said in February this year.

“That’s a $500 million boost, which is huge, that’s double the size of the National Innovation and Science Agenda. Very big impact.”

Startup Victoria chief executive Georgia Beattie believes this is a “positive sign” from the federal government.

“There’s nothing more genuine than handing money over for a product or service,” Beattie tells StartupSmart.

Beattie says that she and her team are also developing a digital platform to create more opportunities for small businesses and startups to work with government.

“We are currently developing a ‘reverse pitch’ on our new digital platform that will serve as the go to resource for the startup community,” Beattie says.

“​We want to facilitate pathways for collaboration. ​Through our new platform, government and large industry will be able to make the tender process more transparent and efficient. Government will be able to list an open-ended problem or be more specific about a particular opportunity.

“Customers are a great source of capital for our startups and we want to make these pathways as transparent as possible.

“Ultimately this will create a win-win situation for Australia going forward. It will be our job to make sure our community is taking full advantage of the opportunity.​”

StartupSmart contacted Angus Taylor’s office but did not receive a response prior to publication. 

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