Federal budget 2023 highlights: cyber resilience, national emergency management and the environment
The federal budget for FY2023-24 fiscal year was released on 9 May and reveals the Government’s renewed focus on the pertinent insurance concerns of cyber resilience, national emergency management, and the environment.
- SMEs will be the beneficiaries of a $23.4M boost to the Cyber Wardens program, which helps bolster cyber-resilience capabilities through skills training, incident planning and facilitating expert assistance.
- An allocation of $46.5M will go towards establishing the Coordinator for Cyber Security, who will provide strategic guidance to the Commonwealth’s cyber security efforts and according to Prime Minister Anthony Albanese, will give “Australian businesses and families confidence, stability and security, in the face of rapidly evolving threats”. The funding will enable the Coordinator to grow its operations when large scale cyber incidents occur.
- Critical infrastructure will receive $19.5M to continue the development of securing critical assets to respond to cyber-attacks, while the remaining $12.2M will help sustain the cyber-preparedness of Commonwealth entities under the Cyber Hubs program, as well as maintaining certification procedures for the data service providers of Commonwealth entities.
A further cyber security investment of $86.5M is targeted at response measures for online fraud and scams, including funding for the National Anti-Scam Centre and the Australian Securities and Investments Commission (ASIC) to establish Australia’s first SMS Sender ID Registry in order to prevent scammers imitating trusted brand names.
Additionally, an investment of $468.8M over 4 years will go towards the modernisation of the Australian Secret Intelligence Service, which is likely to have implications for our national cybersecurity performance, particularly with regard to monitoring state-sponsored cyber espionage and foreign actors more broadly.
These funding allocations are aligned with the Government’s aims as set out in 2023-2030 Australian Cyber Security Strategy Discussion Paper, for Australia to be “the world’s most cyber-secure country by 2030.”
Cyber attacks have become more severe and frequent in the past 24 months (see our recent article here). The impact on SMEs is profound as these businesses typically do not have the financial means to implement and maintain a requisite system of cyber preparedness. To read more about the cyber market see our latest update here.
National emergency management
- National Messaging System: this will improve communication during emergency situations by prioritising real-time messages – such as alerts and warnings – to mobile devices in defined geographic areas.
- Public Safety Mobile Broadband: this expands upon the communication abilities of emergency services by allowing for faster sharing of voice, video and data material, and by enabling data analytics and ‘cross-border’ communications between, for instance, ground and air crews.
- National Emergency Management Stockpile: this will “enable the Australian Government to provide disaster response and relief resources for rapid deployment across Australia”. These resources include high output power generation, self-sustaining emergency shelter camps, and purification systems.
- Enhancing National Crisis Response and Recovery Capacities: to ensure that there is a national capacity to respond to emergency events, this objective will focus on improving and expanding upon emergency management, crisis planning and crisis response measures.
- Disaster payments for eligible NZ visa holders: disaster recovery payments are extended to eligible NZ visa holders residing in Australia.
- National Disaster Mental Health and Wellbeing Framework: this provides guiding principles to government support workers in how they should effectively manage the mental health and wellbeing of the members of the affected community.
- In an effort to assist businesses saving on energy bills, through the Small Business Energy Incentive, a business with annual turnover of less than $50M will be allowed to deduct an extra 20 per cent of the cost of eligible depreciating assets that support electrification and increased efficient energy use. Up to $100,000 of total expenditure will be eligible for the Small Business Energy Incentive, with the maximum bonus deduction being $20,000. Depreciating assets and upgrades to existing assets are eligible for this incentive, however they will need to be first used or installed ready for use between 1 July 2023 and 30 June 2024.
- A new ‘Hydrogen Headstart’ program worth $156M over the next four years is being initiated in an effort to fast-track the development of up to three renewable hydrogen projects to help manufacturers transition away from the use of fossil fuels, particularly in the aluminium and steel industries.
- A ‘net zero authority’ will be established to promote and guide the economic transformation from fossil fuels to renewable energy.
- An allocation of $121M will be used to create Environment Protection Australia (EPA), which is part of a reform of conservation laws which will dictate whether certain developments can proceed in light of various environmental concerns. The need to better protect and conserve endangered species and ecosystems is at the forefront of these developments.
This latest budget potentially presents positive implications from an insurance standpoint, particularly in relation to cyber and environmental exposures. As businesses gain greater protection from the impacts of these risks, it is likely that we could see inflows of capacity into the Australian market for what are currently seen as high-risk exposures. In-turn we hope this may yield premium relief, or at least benefits of increased competition, in what are two difficult product classes (cyber and property insurance).
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