Leading figures in Australia's blossoming technology industry fear instability in Canberra and ongoing tensions within the Liberal Party will threaten Australia's progress on innovation despite Scott Morrison's elevation to prime minister.

Daniel Petre, the respected former Packer lieutenant, who worked closely with Bill Gates at Microsoft, said he was "depressed" by events this week in Canberra. Mr Petre, who now runs tech investment firm AirTree Ventures, is concerned the Liberal Party's conservative wing will continue to move the government in an anti-science, anti-innovation direction.

"The Right will just tear the party apart," he said. "Clearly, for the last while not a lot has been done in Australia because there is a small group of right-wing nutters who are hellbent on revenge rather than doing anything for the country. We are already behind the eight-ball and this will set us back."

Mike Cannon-Brookes, the co-founder of $25 billion software firm Atlassian, recently told Fairfax Media he was perplexed by the Australian political system's inability to deal with challenges such as climate change and immigration, as politicians focused on internal party manoeuvring.

"I look at some of the politicians, and I'm very disappointed in their inability to be able to speak their minds," he said in an interview in July. "Having known a lot of them personally, I'm like, 'You really think that?' And they say, 'No, I think the opposite, but the party position is this.' On both sides."