But for the local tech community it was a particularly bitter pill to swallow. It was just the latest in a lengthening list of policy defeats the community has suffered in recent times. There was the defeat over encryption laws last year. Before that, the clawing back of research and development tax breaks and changes to the rules over highly skilled migration.
Part of the problem is that in Canberra, “tech” more often than not means the branch offices of the US tech giants (think Google, Facebook, Microsoft, Apple). After all, these are the most substantial tech businesses operating in Australia. They employ thousands of people, generate billions of dollars in revenue and make products used by millions.
They are also deeply out of favour with politicians all around the world, and Australia is no exception. “There is so little respect for them,” one Canberra source says of Big Tech. “Their kneejerk reaction to everything is ‘regulation won’t solve this’. But the government is jack of it.”
The succession of recent scandals involving tech companies, and their fierce resistance to regulation (including over taxation) are finally coming home to roost. The local branches of Big Tech firms (government relations staff often report regional to offices in Singapore, and don’t have major clout with headquarters in the US) are proving ill-equipped to deal with the backlash.
All of this is little comfort to Australia’s homegrown tech community – a collection of scrappy start-ups and a handful of substantial companies headed by software firm Atlassian. These firms have very little in common with each other, let alone Big Tech, but unfortunately are indirectly being tarred with the same brush.
It’s tempting to view the string of recent policy defeats as evidence our elected officials just don’t understand tech and innovation – and that is certainly part of the problem. But here’s the thing: our politicians don’t understand a lot of things. (Have you ever watched a Senate estimates hearing? Or even just Question Time?) If you are starting from the premise that politicians will act logically you are already doing it wrong.
It also may be tempting to view this as a partisan issue that might be resolved if the Coalition loses power at the next election. Perhaps, but Labor voted for the legislation the local sector is most upset about, and has had its own howlers in the past (remember the Internet Filter?).
Navigating the shadowy corridors of power is one of the few areas where the tech scene can arguably learn from the old economy industries they seek to disrupt. Forging relationships, attending fundraisers, and so forth, isn’t pretty work. But politics is a grubby game and to succeed at it you need to get your hands dirty.
“Telco and media may not win every battle, but they certainly put up a better fight,” one former staffer says. “They know they are going to get regulated somehow, so they work with government to make it work. With tech, it’s their way or the highway. Inevitably, it leads to a worse outcome”.
Every time legislation passes affecting the sector there are the veiled threats to leave Australia – which is not the way to endear yourself to politicians. As the Attorney General Christian Porter put it last week: “It’s like Alec Baldwin saying he’s going to leave America every time a Republican is elected president – it just doesn’t happen.”
There are also arguments that the measures will cost jobs that don’t yet exist. Again, the sentiment is valid but these are not winning arguments in the reductive world of politics.
Being good at lobbying is not a virtue that we should celebrate. Yet if the local tech sector really is the key to our future prosperity in a post mining economy, and if Canberra’s bad policy is seriously threatening that, then it is becoming a necessary evil.
The Twitter diplomacy favoured by our most prominent tech entrepreneurs and venture capitalists might be refreshing and entertaining (it also makes for good newspaper copy). But that alone isn’t going to cut it.
John McDuling is a business, media and technology writer for The Sydney Morning Herald and The Age.