23 Sep 2016
Why $23m Is A Very Small Step In The Right Direction

Why $23m Is A Very Small Step In The Right Direction

The federal government was applauded this week after announcing a $23 million support program for Australian start-up incubators. We’ve been subjected to endless rhetoric about innovation and the digital economy for a couple of years now, so it’s good to see the Turnbull government putting some cash behind an initiative like this.

Having said that, $23 million is a small hill of beans. To put the investment in perspective, two New Zealand government agencies were criticised recently for spending the same amount to fit out their new offices in Christchurch. The $160 million being wasted on a same-sex marriage plebiscite is an even more damning comparison. Those funds could be put to much better use (like the digital economy) if Malcolm grew a pair and stopped pandering to hardline conservatives.

Although the start-up community has been effusive in its praise, they must quietly be feeling disappointed and frustrated by the level of support. If we’re serious about capitalising on the opportunities of a digital future, the government needs to do more than pitch in a few bucks it found down the back of a sofa. Actions speak louder than words.

Disruptor Disrupted

Tesla continues to generate headlines for all the wrong reasons. Chinese researchers from Keen Security Lab have posted a video to YouTube showing how they were able to take remote control of a Model S from almost 20 kilometres away, slamming on the brakes as it was driven around an empty car park. The hackers have also been able to open the car’s door using a laptop, move the wing mirrors, open the boot and disable the dashboard control panel.

In fairness, Tesla earned praise for responding quickly and upgrading its firmware as soon as the security flaw was brought to its attention. But these are worrying times for this digital disruptor. The car maker’s Autopilot feature has already been cited in two deaths this year, with a Chinese family filing a lawsuit that accuses the company of exaggerating the capabilities of its software. The second driver was killed in Florida when his car crashed into a truck while he watched a Harry Potter movie.

The technology industry has a long record of overstating the impact of new developments in the short term but underestimating them in the long run. Driverless vehicles have enormous potential for improving road safety and increasing business productivity but there’s much work to be done before they become a mainstream reality. This year’s bad headlines for Tesla are a timely reminder that the road to driverless cars becoming the norm is likely to be longer than some evangelists would have us believe.

Pesky Gremlins

There were some red faces at the Australian Securities Exchange when it emerged that the market had opened late and closed early because of a hardware failure. For a business that’s so heavily dependent on keeping its systems up and running, you have to wonder how a glitch in the main database could have such a serious impact. You can be sure the ASX spends a small fortune on its disaster recovery site in Bondi Junction to deal with situations just like this.

Federal Treasurer Scott Morrison led the chorus of disappointed voices, telling 2GB Radio that the Australian Securities and Investments Commission would investigate the incident. Some people who took to Twitter were amazed by the lack of an effective business continuity plan. Others made reference to the recent Census debacle or posted sarcastic memes. This was our favourite.

Putting a more positive spin on events, at least it wasn’t a cybersecurity attack.

Shopping Tax

Is it just us, or do plans to include GST on all online purchases from overseas look like a disaster waiting to happen? The new regulations come into force from July 2017 but will be difficult to enforce when shoppers can mask their location with a virtual private network (VPN). One option is to block websites that fail to comply with the new rules. Should the government decide to take that route, the dubious pleasure of playing digital policeman will fall to internet service providers.

Alternatively, the taxman could force consumers to stump up the cash when signing for new purchases at the point of delivery. Similar systems are used in Ireland and other European countries. (Ed’s note: I know, my wife nearly killed an airport official when he tried to make her pay import tax on the wedding dress she brought into the country.)

Added to the logistical difficulties of enforcing this new GST law, the economic benefits have never been clearly explained. Some of our larger and more outspoken retailers have been lobbying for the change but niche websites and consumers look likely to pay the price. In short, services like Netflix and Spotify are about to get a little more expensive and some cool stuff you can only find on boutique sites is likely to disappear completely. We’re not impressed.

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