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Google makes $1 billion investment in Australia

·4-min read
Blurred Google logo, Australian Prime Minister Scott Morrison speaks.
Google has announced a $1 billion investment in Australia. (Sources: Getty)

Technology giant Google will invest $1 billion in Australia in a bid to advance the digital economy, with hopes the injection will create 6,000 jobs.

Google CEO Sundar Pichai announced the investment at the company’s Digital Future Initiative event on Tuesday, outlining the three prongs to the five-year investment.

“First, it will help develop Australia's digital infrastructure focused on cloud computing. Cloud is helping Australian companies innovate and grow in every part of the economy,” Pichai said.

"Second, it will broaden the opportunity we provide for local tech talent, including the launch of our first research hub in Australia. At Google, research Australia will build a team of local researchers and engineers to help tackle important issues, creating jobs and providing education and training.

"Third, we'll create new technology partnerships to help solve Australian and global challenges. That includes working with the CSIRO ... to explore clean energy and protecting the Great Barrier Reef and with Macquarie University to advance quantum computing.”

Prime Minister Scott Morrison welcomed the announcement, describing it as a “$1 billion vote of confidence” in Australia’s digital economy.

He said the investment will encourage Australian workers to seek out local opportunities, while meeting a target of becoming a top 10 digital economy by 2030.

“It's happening here in Australia when it comes to the digital economy,” Morrison said.

“This is where you want to be if you want to be part of that and it'll have a ripple effect across our economy, supporting the creation of over 6,000 direct jobs and a total economic impact of some $6.7 billion to our economy and further expanding the digital ecosystem, which will be foundational to our economy in the decades ahead.”

Morrison optimistic but challenges remain

The search engine giant’s announcement comes as the Australian Competition and Consumer Commission (ACCC) probes Google over its use of internet data to sell targeted ads.

The ACCC has also sounded the alarm over Google’s status as the default search engine.

“We are concerned that Google’s dominance and its ability to use its financial resources to fund arrangements to be the default search engine on many devices and other means through which consumers access search, such as browsers, is harming competition and consumers,” ACCC Chair Rod Sims said in late October.

“Google pays billions of dollars each year for these placements, which illustrates how being the default search engine is extremely valuable to Google’s business model.”

Google also threatened to pull its search engine from Australia, telling a senate inquiry hearing that a media bargaining code threatened its core business.

Speaking on Tuesday, Morrison said that the Government plans to work with Google to resolve these issues, along with extremist content, taxes, news media competition and e-Safety.

While the digital strategy is built around literacy, security, capability, artificial intelligence and emergency technologies, it also needs to respect the risks and challenges associated with the new economy, he said.

“Above all, we need to ensure that we apply the same rules to the digital world that exist in the real world, and this is a challenge for governments,” Morrison said.

“On one hand, we seek to encourage, of course, the massive investment in the jobs and opportunities that digital technologies that will generate here in Australia... [But] on the other hand, we need to put an equal amount of effort into making sure the digital world is safe and secure and trusted.

“This is the tightrope that we walk.”

What if Google just paid more tax?

However, the Australia Institute’s Centre for Responsible Technology added that Google could essentially invest the same amount of money in Australia by paying tax.

Google paid $76 million in tax over the 2020-21 financial year while recording more than $5 billion in local revenue. If Google were forced to pay tax in Australia based on revenue raised here, it could face a significantly higher tax bill.

Google currently processes its advertising revenue through its Google Asia Pacific, leaving a smaller pre-tax profit of $239 million recorded in Australia.

The Centre’s director, Peter Lewis, said Google's investment doesn’t come for free, and Google will now be more firmly embedded into the Government, community and business.

“When big tech offers to put money into a nation there are always strings attached,” Lewis said.

“While investment in understanding the impact of technology is critical, it is also vital this includes critical analysis of the global corporations that dominate so much of our online lives.”

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