Focus Live: NZ Herald brings you the key points and what you need to know from Budget 2020.
Tech investor and entrepreneurs had a mixed reaction to $230 million series of Budget 2020 measures aimed toward their sector - in what was, against the multi-billion spend-up elsewhere, a relatively modest range of new initiatives.
One of the new measures will double to 1400 the number of exporting firmsreceiving intensive support in offshore markets from New Zealand Trade & Enterprise.
Some $32 million would be applied to the Focus programme to achieve that over the next four years, Finance Minister Grant Robertson, said, with three-quarters of the assisted companies employing 50 or fewer people, plus $40m for NZTE to expand its offshore business development efforts.
Hoku chairman Rowan Simpson: would be better to give more support to fewer companies. Photo / Supplied
Rowan Simpson, chairman of private investment company Hoku Group, and a shareholder in two export-focused software companies, Timely and Vend, said more was not necessarily better.
"NZTE used to have a program to support exporters called Focus 500, limited to 500 companies. I was critical a few years ago when it was expanded to include 700 companies, pointing out that was the opposite of focus.
"Yesterday it was doubled to include 1400 companies," Simpson said.
"As Steve Jobs famously said, 'People think focus means saying yes to the thing you've got to focus on. But that's not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully'.
"Making it the Focus 300 with four times the support for each company included would be much smarter and would force them to be much clearer about exactly who they can assist and how. In other words: focus on the outcomes rather than counting the inputs."
The $230m package also saw a new lending scheme will allow firms to borrow up to 50 per cent of the cost of their 'business as usual' expenditure in research and development, capped at a maximum of $100,000.
Some $150m is set aside for that and it is expected to be up and running by early June, with details coming in the near future.
Also set aside was $80m to make failed innovations eligible for tax deductions.
Mark Vivian, a partner at NZ's largest venture capital firm, Movac, said all were useful initiatives.
But he was keenest to see how the government would spend the $20 billion in Budget 2020 funds that Finance Minister Grant Robertson held in reserve.
Deploying that money later this year could be "a great opportunity for the Government to be transformational and courageous. We look forward to seeing how they step up to that," Vivian said.
Vocational spending disappointment
Breccan Mcleod-Lundy, co-chair of NZRise - a ginger group for locally-owned IT companies, said "Our members are grateful for access to SME loans and R&D loans. We do note though that the latter have, in the past, been hard for IT companies to receive so we hope the rules match the innovation approach we see in the digital space.
More broadly hoped the substantial boost in health spending in Budget 2020 would provide opportunities for local tech companies to help improve systems, but he was withholding judgement until there was more detail on what projects could emerge.
"Vocational training is one area of disappointment," says NZRise co-chair Breccan McLeod-Lundy. Photo / NZ Institute of Directors
Elsewhere, "Vocational training is one area of disappointment, McLeod-Lundy said.
"We would like to see much more focus on vocational approaches to high-wage sectors like ICT [information and communication technologies], informed by which industries are growing. It would be a disappointing outcome if we invested heavily in training but failed to match graduates up to the jobs we actually need filled in the future."
Shovel-ready ICT projects should be with NZ companies
Early in the outbreak, NZRise reiterated its call for the government to buy more local IT products and services, to help protect jobs and its tax base.
But it's still on the back-foot.
"Our review of last quarter's GETS [the Government Electronic Tender Service] data shows that while similar numbers of NZ-owned and international businesses won projects, the average contract won by an international bidder was three times the size," Mcleod-Lundy said.
He added, "Kicking off large infrastructure projects to support jobs in New Zealand jobs would also work in ICT but only if it includes a preference for businesses committing to long term employment and training of people in New Zealand."
