No tax breaks for IT sector

IT not high in parties' tax priorities

In an election campaign that is increasingly dominated by large-scale spending on personal tax cuts, industry — and the IT sector in particular — appears to have missed out.

IT Minister David Cunliffe points to Labour’s existing programmes but offers little new for the future.

“We want New Zealand to have world-class intellectual property development. It’s vital for our future economic growth,” he says. “To that end we’ve established a number of funds and increased government spending on research and development dramatically over the past two terms.

“You have to have high bandwidth connectivity to take part in these kinds of research projects, which is why the Government is spending an undisclosed sum on the Advanced Network. Mega-bandwidth is regarded as a given in the R&D field.”

National’s IT spokesman, former minister Maurice Williamson, is more direct, although he doesn’t address specific IT industry concerns. “The more you can reduce overall tax for all, the better it is than trying to pick winners. Long-term, governments usually pick losers.

“We have unbelievable compliance costs. We need a dramatic reduction in taxation. At the very least, we need to align with Australia and, if anything, be slightly better.”

ACT leader Rodney Hide is another with a broad response. “ACT believes the best way to encourage a prosperous economy, including a thriving research sector, is to reduce and flatten tax rates for individuals and business,” he says. “ACT would reduce company tax and personal tax on income over $38,000 to 25% and lower tax on income below $38,000 to 15%.”

New Zealand First spokesman Brent Catchpole says his party would definitely look at tax breaks for R&D as part of the overall move to improve exporters’ tax burden.

“If they’re exporting, we’d look at it very favourably, but we’re not interested in companies wanting to set up sales offices here — it would have to be about development done in New Zealand,” he says.

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