2024-25 Australian Federal Budget Impacts for DSPs

Our Key Budget Takeaways

Digital ID

The government's $288.1 million investment over four years will support the delivery of Australia's Digital ID system, which includes the following measures:

• $155.6 million over two years for the Australian Taxation Office (ATO) to continue operating myGovID and the Relationship Authorisation Manager (RAM)
• $46 million over two years for Services Australia to operate and improve the identity exchange which enables transactions across the Australian Government Digital ID System (AGDIS) and to act as the Digital ID System Administrator
• $35.2 million over two years for the Department of Finance to continue providing policy leadership and governance of the Digital ID program
• $23.4 million over two years for the ATO, Department of Finance and Services Australia to pilot the use of government digital wallets and verifiable credentials
• $11 million over four years for the Attorney-General's Department to enhance the existing Credential Protection Register to support individuals in managing their digital credentials and protect against identity crime
• $7.8 million over two years for the Treasury to deliver the data standards required under the legislation
• $5.6 million in 2024-25 for the Office of the Australian Information Commission (OAIC) to provide privacy oversight under the legislation
• $3.5 million over two years for the Australian Security Intelligence Organisation (ASIO) to provide security assessments for accreditation or participation in the AGDIS. 

With this funding boost to Digital ID, we can expect significant work in this space and more clarity on how DSPs can get involved in the Digital ID system and AGDIS. Once the Digital ID legislation is enacted, DSPs can expect to leverage Digital ID to streamline user experiences and improve security across software interactions. 

Preventing fraud and scams

Hidden within the measures to prevent fraud and scams is continued funding for business registers, eInvoicing and mitigating fraud in the tax and super systems. These measures include:

•  $206.4 million over four years to improve the data capability and cyber security of the Australian Prudential Regulation Authority (APRA) and the Australian Securities and Investments Commission (ASIC) and to continue the stabilisation of business registers and modernisation of legacy systems
• $23.3 million over four years for the ATO to continue overseeing and operating the eInvoicing network
• $187 million over four years for the ATO to detect, prevent and mitigate fraud in the tax and super systems and to extend the timeframe the ATO has to notify taxpayers if they intend to retain a business activity statement refund for further investigation
• $168 million over four years to implement reforms to strengthen Australia's Anti-Money Laundering and Counter-Terrorism Financing (AML/CTF) regime and expand it to professional service providers, including accountants and trust and company service providers. 

These measures demonstrate the government's priority to stabilise and secure existing systems. However, the government has missed opportunities to invest in providing up-to-date and reliable business registers and support eInvoicing efforts beyond keeping the network running. The lack of new investment in business registers and eInvoicing may slow down innovation in these spaces. 

Superannuation

DSPs were expecting more clarity on the direction for Payday Super in this Budget. In the Treasury consultation paper last year, it was shared that there would be an update in the 2024-25 Budget. With the commencement date still stated as 1 July 2026 and no clear direction on how the measure will be implemented, preparing for and delivering Payday Super becomes much more challenging.

We expect a future announcement and funding for Payday Super. However, it is unclear when we will have an update. 

The Gateway Network Governance Body (GNGB) has secured $2.7 million over four years, allowing them to continue managing the integrity of the Superannuation Transaction Network (STN). 

The government has allocated $1.1 billion over four years to pay super on Commonwealth government-funded Paid Parental Leave (PPL) for births and adoptions on or after 1 July 2025. There is also $10 million to support small business employers in administering PPL. 

AI

The Budget has allocated $39.9 million over five years to support the safe and responsible use of artificial intelligence (AI) technology. This funding includes establishing a reshaped National AI Centre (NAIC) within the Department of Industry, Science and Resources alongside an AI advisory body. We'll also see this funding go towards coordinating AI policy development, regulation and engagement across government and the ability to respond to and mitigate security risks related to AI. 

It will be important to help shape AI policy to ensure that DSPs providing tax and payroll software can leverage AI technologies. 

Workplace Relations

The government will provide $111.8 million over four years to support the Government's workplace relations agenda and help support workplaces implementing policy changes such as the introduction of Payday Super. This funding includes the following measures of interest to DSPs:

• $27.5 million over four years to the Fair Work Ombudsman to continue targeting non-compliance, particularly with large corporate employers
• $20.5 million over four years to the Fair Work Ombudsman to support small business employers comply with recent changes to workplace laws
• $2 million in 2024-25 for the Victorian government to lead and progress work on a national labour hire regulation model through harmonising state and territory laws. 

With considerable changes to the Fair Work Act over the past year, it continues to be crucial for employment software to keep up to date with these changes. 

Payments

The government is providing $7.5 million over four years to modernise regulatory frameworks for financial services to improve competition and consumer protections for services enabled by new technology, including:

• Developing and consulting on legislation to licence and regulate platforms that hold digital assets and progress related reforms, including exploring work on Central Bank Digital Currencies, asset tokenisation and decentralised finance
• Implementing reforms to the Payment Times Reporting Act and providing increased resources for the Regulator. 

We'll likely see some increased regulation in the payments space while it embraces new technology. DSPs should continue watching this space and consider how they could support new payment technology. 

What does this Budget mean for DSPs?

The 2024-25 Federal Budget demonstrates that the government's priority is stabilising and securing existing systems and no progressing the large-scale digital transformation agencies such as the ATO have been working towards. The government has missed opportunities to set clear directions for achieving OECD Tax Administration 3.0 objectives, which may cause Australia to pivot from being a leader in this space. 

This Budget provided little detail for DSPs. To better understand the details, we'll need to wait for further consultation or draft legislation on the above measures. 

It also remains to be seen whether unlegislated measures from the previous Budget will progress. 

DSPs will eagerly await an update on Payday Super to provide the clarity we require to understand the level of changes involved to deliver this measure. 

DSPANZ is looking forward to working with our members and government peers on the consultation and implementation of these measures. We'll keep our members updated with more information as it becomes available.