Budget moves get positive reaction from IT industry

Lowering of business tax and broadband initiatives applauded

In general, response to the Budget from members of industry lobby the NZICT Group has been positive, says CEO Brett O'Riley. Members attended a breakfast meeting with Prime Minister John Key this morning where they had the chance to express their views directly.

The lowering of business tax rates is a plus, O’Riley says. It improves, in particular, businesses’ competitive position with their Australian counterparts, which is an important factor in an industry like ICT where there are a large number of mobile contractors.

The research, science and technology package was pre-announced and the ultra-fast broadband announcements were much as expected, he says.

The former will be valuable not only in enabling ICT companies to draw on research for product development, but in helping the industry as a whole assess its own shape and prospects for growth, O’Riley says.

NZICT is embarking on a piece of research with Canterbury University, which will construct various scenarios for ICT industry growth and assess the requirements in capital funding and staff needs.

“Anything that gets Crown Research Institutes and universities working more closely with industry has to be positive for the economy,” says O’Riley.

There were strong indications in the Budget speech that government is moving to a shared-services model, with “smarter ways of procuring and using ICT” and this should strengthen the position of local ICT providers, he says.

“And at the smaller end, I was delighted to see a sum [$2.78m] under Vote Community and Voluntary Sector going to digital literacy.”

This is likely to end up with projects such as Computers in Homes and the Computer Clubhouse, both of which NZICT supports.

Xero CEO Rod Drury was “on the road” and about to depart for the UK when contacted and admitted at that stage he had not read much of the Budget detail. Overall, he says in a brief email, “I agree with the [media] comment ‘a few good steps but no step change’.

"Looks like a solid budget, good for business, that moves things in the right direction.”

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