Some Prerequisites for Innovation

Prime Minister Malcolm Turnbull today announced the Ideas Boom, a suite of measures that rings up the till to about a billion dollars and its created quite a conversation.

Setting aside the fairly transparent narrative of the ideas boom being the sequel to the mining boom — which successive governments pissed up a wall and simultaneously factored into forward estimates revenue projections — there’s a bit of positivity in the pile of fact sheets released today. They can be categorised as tax measures (new provisions to quickly depreciate things that ordinarily depreciated slowly, blurring the lines between ordinary activities of a loss-making business and a less usual profit so losses can be recognised against the profits, tax breaks for investors in start-ups etc.), CSIRO funding (which largely replaces previously stripped funding, they’re still at a net loss and the minds laid-off during the cost cutting are long gone), insolvency reform (Australia is particularly punitive with failed businesses compared to overseas counterparts who are more quickly able to try again) and some cash handouts to various sciency projects like big telescopes and medical research.

Overall it’s a good advance, and it’ll actually go a small way to winding back some of the untold damage Australian governments have done to innovation in Australia. The measures are a weird fractal where if you examine the CSIRO funding that winds back damage the government did itself to a too-little-too-late extent, you can (excusing scale and extent) see parallels with the overall state of innovation in Australia.

From an innovation perspective Australia is an open sewerage pool. In mid-December. In Cairns. And it’s humid as hell. It’s largely this way because Australian governments for the last two decades have done everything they can to tread firmly and unhesitatingly on their own testes and thwart everyone else’s attempts at doing something intelligent, coherent and beneficial.

With the exception of New Zealand — who followed our lead — Australia is the only contemporary western democracy to have a government appointed board to judge the moral value of computer games and movies and ban from sale those which it deems beyond the pale. Faced with the likelihood that this board may not be representative of the broader wishes of the Australian public, there is a second government review board whose remit is to oversee the censors’ decisions but in practice serves to slavishly reaffirm them.

Every other country like us releases classification of computer games as a consumer advice and customer service mechanism to industry. From time to time government rattles the sabre — perhaps emboldened by Australia’s typically stupid example that if you really want to stick your regulatory oar in it’s at least been done before — but it fails to gain traction. Understandably, the industry, businesses, jobs and revenue are all but gone in this country.

Since June 2001 Australia has not only banned the establishment of gambling sites in Australia, but tried its arm at the jurisdictionally problematic task of prohibiting overseas companies and websites from establishing such sites that Australians can use. The government asserts that it can fine businesses who offer such services (there are squillions) $220,000 per day. The good news is that $220,000 per calendar day per gambling website on the Internet would mean that any perceived “budget emergency” would be resolved with a projected budget surplus by… oh… let’s say Thursday, but the bad news is Australian legislation doesn’t apply to website operators in Northern California who think Australia borders Germany, the Czech Republic, Slovakia, Hungary and Slovenia.

If the prospect of having to negotiate a government approval program for your dev team’s computer game or the idea that police will kick in the door of your roulette app’s co-working space doesn’t turn you off, the government passed legislation (that the previous one couldn’t get over the line) this year to require Internet Service Providers to create, retain and furnish without a warrant most of the pertinent information about every Internet transaction Australians make. Interested in rolling out a multi gigabit fibre network in Australia for rural component networks? Hope you factored in tray upon tray of network attached storage to keep logs for the feds. Maybe you’re OK with that, maybe you’re OK that the porn industry was chased off-shore 15 years ago (you aren’t trying to start the .au of a porn site maybe), maybe you’re OK with the fact that an inquiry began accepting submissions today on just how much porn is on the Internet and what can be done about it (the last attempts to regulate Internet porn increased in scope explosively and wound up blocking a school canteen website and the website of a dentist), maybe you’re OK that dozens of government agencies have misappropriated an obscure section of our legislation (“S313” for short) to strong arm random websites into being blocked. That humdinger saw our securities and investment commission accidentally compel an ISP to block more than a quarter of a million websites because they didn’t know how IP addresses worked and thought it was a 1:1 relationship with the one website that was annoying them.

Maybe you’re OK with all of this, but if you are, I’m sorry, you’re an idiot. If you’re investing in Australia you’ve got oatmeal where your brain should be, because the regulatory landscape was, is, and will continue to be an act of war against technological investment or anything even peripherally related to the Internet and media. Don’t turn, just run, the government has done some good things today and clawed back maybe 4/5ths of 3/16ths of the untold damage it’s done since 1997.