COVID-19 has changed the world.
It has closed borders, devastated economies, and taken countless lives.
In so many ways life will be different on the other side of COVID-19.
One of the most profound changes relates to the speed by which technology has been adopted in our personal and professional lives.
The digital economy has advanced five years in just eight weeks according to McKinsey, as Zoom meetings, telehealth consultations, and e-commerce has gained pace.
Here in Australia, the Morrison Government has ensured the regulatory settings and service delivery systems have been able to adapt.
For example, in the Treasury portfolio, I’ve made temporary changes to the Corporations Act to allow companies to hold virtual AGMs, circulate meeting related materials electronically, and validly execute documents electronically.
These red tape reductions have added to the ease of doing business as well as, in the case of virtual Annual General Meetings, enabled greater shareholder participation.
It also led to substantial cost savings.
For example, in 2019 Telstra printed and posted around 650,000 hard copy notices of meeting at a cost of nearly $1 million.
Whereas with the electronic distribution of materials, the cost is negligible.
To make permanent these changes made during COVID and enhance our economy’s ability to capitalise on digital opportunities, we’re now announcing a new Digital Business Package.
This Package invests in infrastructure while removing regulatory barriers, helping to promote job creation, enhance consumer choice and business flexibility.
Key elements of the package include an expanded digital identity system to enable more secure and easy access to Government services for millions of Australians; implementation of the Modernising Business Register program so that businesses can update and maintain their business registry in one location; and the movement to Government e-invoicing by all Government agencies which will enable small businesses transacting with Government to get paid in a quicker way.
This could be a wholesaler providing fruit and vegetables to an army barracks, or an IT specialist servicing a Government department.
Nearly 90 per cent of small and medium businesses still use paper based invoices at a cost of about $30 per transaction.
By moving to e-invoicing which allows a direct electronic exchange between the supplier’s and buyer’s financial systems the cost per transaction is reduced by around two thirds.
The Commonwealth Government is also proposing to pay e-invoices within five days.
With Governments Federal and State representing up to 10 per cent of all business invoices, the Commonwealth’s lead will hopefully see broader economy-wide adoption.
The package also includes additional funding to roll out the Consumer Data Right so that customers in the banking and energy sectors can more easily compare products and move between service providers.
For example, a long-standing bank customer on a variable home loan is paying on average $1,000 more a year in interest for every $250,000 outstanding on their loan.
Similarly, a residential electricity customer on a median market offer could save in some states more than $400 a year by simply switching to the cheapest market offer available.
Better consumer outcomes are achieved using the Consumer Data Right as banks and energy retailers are able to securely and with approval, access customer data.
This allows them to provide more choice as to the various products they have on offer.
Already open banking has been launched for savings and credit card products, with personal loans coming online later this year.
These measures announced today build on recent announcements including the Government’s $4.5 billion investment in the NBN to get ultrafast broadband to eight million premises and in the process create an estimated 25,000 new jobs; a $1.6 billion cyber security strategy to develop the skills and infrastructure required to create a more secure online world; and the $1 billion Job Trainer program which is investing in skills development across a range of industries including information technology.
The digital economy offers incredible opportunities to consumers and businesses alike and with this package, those benefits will come more quickly to all Australians.
Josh Frydenberg is the Federal Treasurer