Incoming Technology Minister Judith Collins has networked furiously with the industry, and consulted on policy in a process that began back in November 2021.
She developed a lot of knowledge along the way, and since your life circumstances inevitably inform your outlook, it helps that she’s got a personal stake. “My son became a software developer and it really opened my eyes to how absolutely crucial technology is for us to grow the economy, productivity and get incomes up higher,” Collins said.
While I haven’t always seen eye-to-eye with Collins, her long-term application to the sector has been a contrast to the outgoing Government, which had three ministers in three years (the distracted, foot-out-the-door Kris Faafoi, the demoted and disgraced David Clark and newbie Ginny Andersen, ranked 19th of 20 in Cabinet and focused on the ram raid crisis as Police Minister). They were advised by a lame-duck Digital Council whose meeting minutes were borderline laughable.
But for all her experience, Collins’ party released just one concrete policy for the sector during the campaign: a promise for three new classes of visa (graduate, digital nomad, high-skilled earning above $400,000), which would cover a collective 1000 immigrants per year.
That measure was warmly received by the industry, but was hardly as pressing as it would have been even six months ago. The talent squeeze eased as local and multinational tech firms shifted from hiring-spree mode to chunky layoffs and the number of local jobs has actually started to contract recently.
Collins said she’d have to wait until her party was in government and had a better handle on the lay of the land, before she could reveal any other specifics. Here are 10 areas of tech that need her attention.
1. The online fraud and cybersecurity crisis
To start with stuff affecting all of us, Australia’s Budget 2023 also had three other tech policies not matched by New Zealand’s Budget 2023 and made no appearance in National’s manifesto, including several around online safety and fraud - which now costs at least $198 million a year according to new figures from 11 banks (who have promised key changes, but on an open-ended timetable).
A study commissioned by Netsafe found the total amount lost was more like $2 billion. Collins would do well to match them.
Cybersecurity: Australia’s Budget 2023 had A$46.5m ($76.34m) earmarked to establish a Co-ordinator for Cyber Security to oversee multi-agency efforts in the event of a cyber incident.
E-safety: The Australian Budget also had the e-Safety Commissioner’s annual funding quadruple with a A$131m injection. The equivalent agency here, Netsafe, has a budget of around $4m.
Online fraud and scams: The Aussies also earmarked A$86.5m ($93m) to establish a new National Anti-Scam Centre. Netsafe has called on the incoming Government to look at the same unified-response solution here, where people are currently confused by an alphabet soup of agencies and over which to approach.
Australia’s Budget 2023 allocated A$101.2m ($108.6m) to a critical technology fund to help create governance rules for artificial intelligence (AI), and support small and medium enterprises’ adoption of AI technologies.
There was no equivalent here with our Budget 2023. There are several models for Collins to look to if she ends up pushing for more guard rails for this society-changing technology, which has created challenges from the copyright-busting “Napsterisation of everything” phenomenon as generative AIs drawn on previous-published but unsourced content for their replies, to coming superintelligences that threaten to disrupt, well, nearly everything.
They range from US President Joe Biden’s very broad strokes series of executive orders to the EU’s much more prescriptive AI Act, coming into force later next year (more on each here).
Collins has to do something, at any rate. Currently there’s a dog’s breakfast where different Government departments are implementing different AI policies, from the Ministry of Business, Innovation and Employment’s outright ban that prevents it taking advantage of the tech’s upsides, to DIY efforts that are somewhere in between.
3. Tax breaks for venture capital
At National’s tech policy launch, Maker Partners co-founder Jonathan Reid was very positive on the policy overall, but said he was disappointed it did not feature tax breaks for venture capital investments - one of several recommendations floated in the recent Startup Advisors Council report that did not make the cut for National’s policy (or, indeed, any other party’s).
Some in the VC industry are also pushing for a change to the current FIF (financial intermediary funds) policy. They say the current setup effectively taxes offshore investors on unrealised gains – and these can be significant for investor immigrants with large holdings in US-based tech startups.
Collins said during the campaign that, for now, New Zealand’s debt level precluded it. Members of the Startup Council, many of whom are National-friendly, diplomatically kept their thoughts to themselves as their bright ideas were cold-shouldered. But now I suspect they’ll start working their networks.
4. Rignite the $300m Elevate Fund
The Startup Council also wanted the New Zealand Growth Capital Partners’ $300m Elevate fund boosted to $500m (the Crown agency co-invests with private venture capital).
As things stand, the fund, which has done so much to boost the venture capital sector as it co-invested with private funds since it was established in 2020, is nearly exhausted, with no plans to be topped up. As things stand, investment in start-ups is falling.
5. Barriers to KiwiSaver investing in start-ups
Removing the current barriers that have limited KiwiSaver funds’ investments in start-ups was another Startup Council idea snubbed by Labour and National during the election- although it was the only one of the council’s 27 recommendations that Act said it would support (Act’s minimalist approach is in keeping with the small government approach that once saw its MPs vote against the UFB (Ultra-Fast Broadband network), although current leader David Seymour is broadly open to public-private partnerships).
6. The tax on unrealised gains for esops
Collins promised to investigate this one - axing a tax on unrealised gains from employee stock ownership plans. That would make it a lot easier for cash-strapped start-ups to offer shares to lure or retain staff. Prospects seem good.
7. Rural broadband gaps
There are still gaps in rural broadband, despite the last Government tipping in more funds. The last Government did float a tiny but interesting scheme for rural properties to get direct grants to install the broadband solution of their choice - with Elon Musk’s Starlink as one of the mooted options. For remote areas, especially, that one seems a slam-dunk.
8. Wasteful spending on start-ups
Tech investor Rowan Simpson says office space is rarely the key problem for start-ups (and the incubators argue there are networking and mentoring benefits, too) but money would be better spent directly supporting early-stage firms. Whether you agree with Simpson or not, it’s time for a review of the incentive programmes overall, where there’s sometimes a bit of a clubby feel.
9. The digital divide
NZ Rise co-founder Don Christie said there was a danger that more tech visas could be a crutch that stops the industry from doing enough in-house training, or the Government doing enough to build the local IT workforce.
Part of that is making sure there’s a good funnel of new tech workers coming through schools and universities. In part, that means giving every pupil an equal opportunity to develop an interest in tech and its high-paying, productive roles. Currently, there are an estimated 120,000 students who don’t even have a laptop.
10 Locals cold-shouldered in procurement
Christie has also pushed for the Government - as easily New Zealand’s largest buyer of tech products and services - to introduce procurement policies that do more than pay lip service to local contenders, who he argues have the chops, while the global contenders have frequently blown budgets or under-delivered.
He argues locals pay full taxes, and help build New Zealand’s skills base. Things went backwards here during the last Government, as during the pandemic a series of contracts went to multinationals under an accelerated process with no competitive tenders whatsoever.
A dedicated Technology Minister?
National made a big deal on the campaign trail about having a dedicated Technology Minister. This seemed a bit like semantics, given the minister covering the sector over the past decade, from either party, has had a broader title. Ginny Anderson is Minister for the Digital Economy and Communications until November 27.
In the event, Collins also has a broad title - Minister of Science, Innovation and Technology and, as is typical, several other portfolios.
She will also serve as Attorney-General, Minister of Defence, Minister for Digitising Government, Minister Responsible for the GCSB, Minister Responsible for the the SIS, Minister for Space, and (stay with me) Lead Co-ordination Minister for the Government’s response to the Royal Commission’s report into the terrorist attack on the Christchurch mosques.
No matter. The key thing is the portfolio is back in the hands of a senior minister after years of big personalities who made big moves in the role (Swain, Cunliffe, Joyce, Adams) before becoming the preserve of the demoted and the dumped.
And given the legal issues involved with AI and other pressing tech issues, being Attorney-General as well could prove a useful crossover.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.