Where's the Y2K in '99's spending?

New Zealand and Australia appear to be taking opposing tacks in the way they address the year 2000 issue. Treasurer Winston Peters' 200-page Budget document contained not a word on the year 2000, while Australia has marked it out as a special point of focus. United party leader Peter Dunne, a longtime advocate of Y2K policy, has described the situation as ludicrous. Ministry of Commerce spokesman Reg Hammond says Treasury prefers to leave such forecasting to the private sector.

New Zealand and Australia appear to be taking opposing tacks in the way they address the year 2000 issue.

Treasurer Winston Peters' 200-page Budget document contained not a word on the year 2000, while Australia has marked it out as a special point of focus. United party leader Peter Dunne, a longtime advocate of Y2K policy, has described the situation as ludicrous.

"Treasury still hasn't done any detailed assessment of the [problem's] impact on our economy," says Dunne. He points out that while the Asian crisis is mentioned repeatedly throughout the Budget, the Y2K issue has the potential to be just as serious. "It's in the 'too-hard basket' for them."

Dunne hopes there will be some response from government to the Y2K inquiry in the near future, but when is another issue. "Time is simply passing us by. I had hoped to see it in the Budget but that wasn't to be."

The Australian Budget, released in the same week as the New Zealand Budget, includes several hundred million dollars worth of extra Y2K spending. There is an additional $A126 million for Y2K projects within the federal government and a further $A5.5 million over the next two years to promote awareness of the issue. Any expenditure on software or labour to repair or upgrade systems will be tax-deductible.

The New Zealand Budget, however, contains no extra funding for Y2K compliance projects, no funding for awareness programmes and nothing about the tax implications of IRD's position paper on Y2K. "There's nothing there. The contrast between the Budgets is stark in that context."

Dunne believes there are five steps the government should take to ensure it can cope with Y2K. "We should freeze all new government IT projects unless they are directly related to fixing the problem." This is a move Bill Clinton has promoted in the US and Dunne believes it would allow each department to focus on the problem at hand rather than on buying new equipment for other projects.

"I would like to see the prime ministerial task force set up as soon as possible, and the PM needs to appoint a minister with special authority." A Y2K minister would work in conjunction with the task force to promote awareness and compliance both inside government and beyond.

"We also need to address the issue of liability and restricting any potential litigation overload that may follow the year 2000."

The final point Dunne would like to see raised is the taxation issue. "We need to look again at the depreciation regime for software." Dunne would like to see something similar to the model proposed in the Australian Budget.

But Ministry of Commerce spokesman Reg Hammond says the New Zealand government is addressing the Y2K issue — it's just not doing it through the Budget.

"IRD released its position paper a few weeks ago and the select committee report has been tabled in parliament already. The Aussies might have covered it in their Budget but we chose to cover it prior to the Budget."

He believes that no other government has included Y2K in its economic forecasting simply because it is too uncertain. Hammond says Treasury prefers to leave such forecasting to the private sector.

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