Budget backs tech, but tax fears linger for investors

Australian technology and energy companies have welcomed parts of the Federal Budget, while warning that tax and investment settings could undermine innovation and project delivery. Executives from mining technology, connectivity, energy and data consulting businesses said the Budget signals a shift towards productivity, resilience and the practical deployment of new technologies.

Mining technology scale-up MaxMine described the Budget as a mixed outcome for the resources and startup sectors. Its focus on critical minerals, fuel security and supply chain resilience aligns with long-term shifts in global demand for Australian raw materials. However, concerns remain that changes to capital gains tax could dampen early-stage investment and constrain the growth of local technology firms serving heavy industry.

MaxMine chief executive Shaun Mitchell said the Budget contained “several positive signals for Australia's mining and resources sector, particularly through its focus on critical minerals, fuel security and supply chain resilience.”

He said the creation of a Critical Minerals Strategic Reserve and continued support for sovereign industrial capability showed Canberra recognises the strategic role of Australian resources in the global energy transition and defence supply chains. Measures targeting fuel security and logistics resilience were also highly relevant for miners reliant on diesel and complex transport networks.

Mitchell said the broader policy narrative now emphasises productivity and resilience across the economy. In mining, that means greater focus on operational efficiency, advanced software and data-driven decision-making, rather than physical capital alone.

“More broadly, the Budget reinforces that productivity and resilience are now national priorities. For the mining industry, that means operational efficiency, technology adoption and smarter use of data will become even more important over the next decade,” Mitchell said.

He supported measures such as startup loss refundability, describing them as positive for early-stage ventures. But he warned that bringing startup investments into the new capital gains tax settings could reduce investor appetite for a small but strategically important asset class.

“The startup loss refundability is beneficial to new, small, very early-stage businesses. While the extension of the Early Stage Venture Capital Limited Partnership (ESVCLP) is of merit, the capital gains tax changes have the risk of making start up funding materially less attractive for investors. Funding for start ups is a far higher risk than other forms of investment, but also a relatively small asset class by value. Including it within the new CGT rules will not raise much revenue, but will likely put pressure on this critically important innovation engine in the Australian economy,” Mitchell said.

He added that equity participation and long-term capital growth remain central to attracting talent in high-growth industrial technology firms. In his view, domestic policy needs to balance tax fairness with the need to sustain globally competitive technology businesses in mining productivity, software and artificial intelligence.

“For companies like MaxMine, equity participation and long-term capital growth are fundamental to attracting talent, rewarding risk-taking and scaling Australian technology globally. Mining productivity improvements increasingly come from software, AI and operational intelligence developed by Australian scale-ups, not just from traditional capital investment,” Mitchell said.

“The opportunity now is to ensure Australia strengthens fairness and resilience in the tax system without unintentionally weakening the investment and innovation settings needed to build globally competitive technology companies locally,” he said.

“If Australia wants to lead in critical minerals, mining productivity and industrial resilience, policy settings must continue to support both the resources sector itself and the technology ecosystem that helps modernise it.”

Regional connectivity company Zetifi said the Budget's research incentives were a vote of confidence in integrated hardware and software manufacturing. The Wagga Wagga-based company, which develops connected fleet safety products, said the research and development reforms could strengthen the competitiveness of Australian firms in global markets.

“Australia competes in global manufacturing by being smarter. Smart industry, where Australian hardware and software are designed and built together for global markets. The R&D reforms announced in the budget back the Australian companies already doing this work. Zetifi designs and builds connected fleet safety technology in Wagga Wagga for Australian and global customers. The next test of sovereign capability is procurement policy reform: home market backing that gives Australia's smart manufacturers the uplift they need to scale globally,” said Dan Winson, Founder And Chief Executive Officer, Zetifi.

In the energy sector, responses pointed to a maturing phase in Australia's transition, with policy stability and project bankability now seen as just as important as headline renewable targets. SMA Australia said the pipeline of utility-scale solar and battery storage projects requires predictable frameworks and grid-focused investment, rather than one-off incentives.

“Australia's energy transition is entering a more mature investment phase: one where investment certainty, grid stability and project bankability matter just as much as headline renewable targets,” an SMA Australia spokesperson said.

The company pointed to a strong pipeline of large solar and storage projects and stressed the role of mechanisms such as the Capacity Investment Scheme. It said the next priority is moving bankable projects efficiently from development to construction and operation under stable policy settings.

“Australia already has a strong pipeline of utility-scale solar and battery storage projects. The focus now must be on enabling high-quality projects to progress efficiently from development through to financial close, construction and operation,” the spokesperson said.

“Stable and consistent policy settings remain important to maintaining investor confidence. Mechanisms such as the Capacity Investment Scheme continue to play an important role in supporting large-scale renewable generation, storage and hybrid projects that strengthen both decarbonisation and system reliability.”

“Australia's utility-scale battery pipeline has continued to expand significantly, reflecting growing market confidence in the role storage will play in the future energy system. This momentum highlights the importance of policy frameworks and long-term investment certainty in enabling projects to move from pipeline to delivery.”

“At the same time, the next wave of large-scale renewables will increasingly depend on bankable technology, strong project economics, grid-support capabilities and trusted delivery partners. As the market matures, the conversation is shifting from renewable ambition to renewable execution and delivering energy infrastructure that is not only clean, but reliable, dispatchable and built for long-term grid performance.”

“Grid-forming inverter technology, battery storage, and hybrid energy systems are no longer emerging technologies. They are becoming critical infrastructure for the modern power system, helping maintain grid stability as conventional generation retires, strengthening energy security, and enabling renewable energy to operate as reliable, dispatchable capacity.”

“SMA supports this transition every day through utility-scale solar, battery and hybrid projects across Australia and globally. SMA Australia is well-positioned to support the market's next phase through proven power conversion and control technologies that help de-risk projects, support grid stability, and maximise long-term asset value.”

“Australia has already built significant momentum in large-scale renewables and storage. Maintaining predictable and durable policy settings will be essential to sustaining investor confidence and ensuring that momentum continues.”

Data and analytics consultancy Altis Consulting focused on artificial intelligence and the Federal Government's planned investment in local research and deployment. It said the Budget signalled a shift towards practical AI use cases within government processes, rather than abstract debate about the technology.

“The Federal Government's commitment of up to $70 million to build local AI research and industry capability in this week's Federal Budget, alongside its growing focus on practical AI deployment across government, signals an important next phase in Australia's approach to AI adoption,” said Katrina Pilcher, Chief Commercial Officer, Altis Consulting.

Pilcher highlighted potential applications in environmental approvals, access to building standards and administrative decision-making. She said the discussion around AI is increasingly centred on data governance, implementation and operational integration.

“What stands out is the emphasis on applying AI to real operational challenges and service delivery improvements, including accelerating environmental approvals, simplifying access to the National Construction Code and supporting faster decision-making across government. These are practical use cases with the potential to improve productivity, reduce delays and deliver more tangible outcomes for industry and the broader community,” Pilcher said.

“The announcements also suggest the conversation around AI adoption is increasingly moving beyond the technology itself and toward the data, governance and operational processes required to support AI effectively at scale.”

“As AI adoption matures, organisations that invest in strong data foundations and implementation capability will be best positioned to realise long-term value from the technology.”