UPDATE: Internet Industry Association president Peter Coroneos has joined other industry pundits in lamenting the Howard Government's lack of support for the ICT sector.

In lieu of government support, Coroneos advised Internet Industry Association (IIA) members to explore regulatory measures to encourage growth in the industry.

"The tight spending constraints mean that we are not going to see a kick-start to the tech sector from any Government pump priming," he said.

Any praise the IIA had for the Government in attempting to address the association's long-held concern for the security of Australia's information networks was thin, at best.

Of an additional AU$194 million to be spent on national security over the next five years, the National Office for the Information Economy (NOIE) will receive AU$1 million over four years to develop electronic security.

"Evidently the prospect of terrorist initiated cyber-attack remains too theoretical a possibility in the mind of Treasury to warrant much of a commitment," said Coroneos.

There has been an air of dissapointment amongst industry pundits and analysts ZDNet Australia has spoken to following the announcement last night of the 2002-03 Federal Budget.

As Ideas International CEO Iain Birks describes it, the latest budget lacks vision.

While the Government had helped bolster the economy to weather the global economic downturn in the past, Birks believes that the worst is yet to come. And he sees no evidence that the Government is preparing the Australian economy for the rough ride ahead.

"Prior economic measures have done the right thing to stimulate industry, but I don't think this budget has anything in it that addresses the current industry situation," Birks said.

"We've seen some corporate collapses around here but I think we'll see more and I think we'll see increasing inflation," he added.

While Birks applauded the Government for establishing the Research and Development Start Grant scheme, he also believes that the Government should assist entrepreneurs directly as venture capital dries up.

"If the Government had focused on providing a way for small businesses to start-up in a more tax-effective way--or perhaps provide IT start-up grants for certain types of software development or high-tech growth areas--that would have been a good thing" he said.

Rob Durie, executive director at the Australian Information Industry Association (AIMIA) said that overall he was disappointed, although not surprised, by the Federal Budget.

Durie said he had thought that it was going to be defence, security, and border protection-focussed prior to the Budget's release last night. But he did add that on the plus side, spending in areas such as defence could mean additional work flowing into the IT industry.

It was also positive to see the beginning of funding for the Innovation Act Plan, which included areas such as the ICT Centre of Excellence, he said.

But Durie expressed confusion at the Government's handling of other areas. -We're extremely disappointed in the Government's failure to top up funding for the Start R&D grants program--it now looks like there's going to be a 12-15 month freeze on new projects and this program is really an important part of the funding cycle for ICT startups and emerging companies."

He believes it puts a bit of a damper on IT, at a time when the market is already uncertain. Durie said that companies were more attractive to both angel investors and venture capitalists when they received a grant, and the likely freeze could have a negative impact. -Some companies aren't going to survive that wait," Durie predicted.

-I think the challenge for the Government and the industry is in 12 months time we'll need to see a Budget that provides sufficient funding for a proactive strategy to develop the industry," he said.

Lynne Spender, executive director at the Australian Multimedia Industry Association (AIMIA) was also disappointed with the Budget. -While the Government has shown considerable support for us over the last two years, I'd hoped there would be something in the Budget to give it a bit of a push," Spender said.

Like Durie, Spender wasn't surprised at the focus on defence, and the attempts to control expenses associated with aging and welfare.

Spender believes that the Government is stimulating the IT industry by packages outside the Budget which are very targeted, rather than any sort of grande gesture in the Budget.

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