Budget 2021: The technology industry's verdict

Budget 2021 may have been a historic one in some areas, but technology was not one of them. The consensus industry reaction was that tech took a back seat. For IT, at least, it was a missed opportunity in a year when issues like the cybersecurity crisis, the digital divide and a dire shortage of tech workers have loomed so large.

There was no match for Scott Morrison's multi-billion boost to cyber defences across the Tasman, dramatic moves to address the shortage of candidates for skilled jobs in technology, or makeover of the role of tech in education.

In print today: a supermassive visualisation of where the money went in Budget 2021. There’s also an online version with drill-down options and spending trends over time: https://t.co/Ohw8FFKYic pic.twitter.com/MiDzvKlBiI

— Chris Keall (@ChrisKeall) May 20, 2021

We did get one meat-and-potatoes move. Over the next two years, the Government will spend $44 million in continuing the Digital Boost – business training courses for SMEs (including free online videos and how-tos), and "providing digital business advisory services to help Digital Boost graduate adopt digital ways of working in their businesses." Last year, the programme was allocated $10m, followed by a $10m top-up from Covid recover funds, which was aimed at digital training for tourism operators.

Economic Development Minister Stuart Nash said the programme's free videos and how-tos and other training services will help up to 30,000 small-to-medium businesses per year.

Tuanz head Craig Young: "The Government has missed an opportunity to address the big issues that our members have identified such as the lack of technical skills to increase our digital and cybersecurity capability, and does not address the widening digital divide." Photo / File

And there was a sensible move $230m operating spending and $170m capital spending was earmarked for a new, centralised patient record system over the next four years as the 20 DHBs are merged into a single national health agency. Experts have said the current health IT setup - a patchwork of at least 120 different systems - is inefficient.

Earlier this week, security expert Jeremy Jones said the Ministry of Health's lack of influence over this fragmented setup contributed to the Waikato DHB ransomware attack. The move to a centralised health system was flagged in the run-up to the Budget.

Tech commentator Paul Brislen: "It's almost as if the lack of tech-industry people in politics is hindering our move to the new digital economy." Photo / File

There was also the pre-announced $41.8m in new spending to boost the uptake of electric vehicles between now and 2025.

Earlier, Parkable founder Toby Littin said the new funding - much of which was ear-marked for the "greening" of the state service fleet was a "tiny drop in the bucket" and misdirection in spending.

There were also some odds-and-sods moves, including $36m to improve the digital platforms that businesses use to interact with local bodies and central government; $20m for a new residential tenancy bond system; $22m in new funding to REANNZ, which supplies broadband and networking services for researchers; $12.7m for online learning resources; and $5.8m to "respond to Māori interests in radio spectrum" in the build-up to the 5G auction expected in late 2022.

With the auction likely to generate hundreds of millions in bids from Spark, Vodafone, 2degrees and others, this spending is likely just the first step in resolving the long-standing treaty claim on airwaves.

But there were no big-bang moves. Technology pundits canvassed by the Herald saw Budget 2021 as a missed opportunity.

InternetNZ chief executive Jordan Carter was disappointed by the lack of new digital inclusion policy. Photo / Supplied

"At a time when the New Zealand economy urgently needs to be rebuilt, where tourism is at a standstill, we should be doing all we can to encourage the growth of the digital and tech sectors. This Budget largely leaves the settings alone, throws some money at sorting out health IT issues - which is sorely needed - and encouraging digital learning among small business owners, but that's about it," tech commentator Paul Brislen said.

"The tech sector is struggling to find enough people to fill the relatively high-paying jobs we have on offer today. Surely there's some role in there for Government to support students into the digital streams and to encourage re-training in this exciting sector?

"It's almost as if the lack of tech-industry people in politics is hindering our move to the new digital economy."

Movac partner Lovina McMurchy said her company wasn't expecting any direct assistance to the venture capital industry this year, so wasn't disappointed by the lack of it (last year, the Government established the $300m new Elevate fund for co-investing with private VCs in early-stage companies).

But she had been hoping to see new policy to attracted skilled migrants to New Zealand to address what's become an acute shortage of IT talent - and was disappointed nothing new was announced on that front today.

"The problem is no longer raising capital," McMurchy said, "It's finding talent."

Startups flush with cash are in a hiring war - and competition with corporates who have suddenly clocked to the fact they have to digitise, and Australian outfits poaching our talents. We need to throw open our borders to tech workers, and introduce new policies to incentivise them to come to New Zealand, the Movac partner said.

Movac Partner Lovina McMurchy wanted policy to address the talent gap in technology, which means capital raised by early-stage companies can't be deployed. Photo / File

Angel Association of NZ chair Suse Reynolds was more upbeat, welcoming Green Fund top-up and the $67.4m ear-marketed for working toward a carbon-neutral public sector by 2025 (a sum which includes the aforementioned $41.8m to transition a modest 3 per cent of the government vehicle fleet to EVs by that date).

"For New Zealand to create a sustainable economy generating exponential impact and value, every Kiwi needs to back or build a startup," Reynolds said.

"So it was good to see the government sending clear signals about the role of technologies and businesses addressing climate change.

"If you're a startup like Mint Innovation or CoGo or Avertana or Carbon Click it is encouraging to know there are potential sources of capital and support from the government reflected in the extra $300m for the NZ Green Investment Finance Fund."

"I was disappointed by the lack of digital inclusion policy," InternetNZ chief executive Jordan Carter said.

Angel Association of NZ chair Suse Reynolds welcomed the $300m top-up to the Green Fund and $67.4m for de-carbonisation - both of which she saw creating opportunities for startups. Photo / File

After the first lockdown revealed some 200,000 Kiwis were without internet, Carter had been hoping to see initiatives to help more low-income households connect to the internet - following up on the early pandemic push that saw modems sent to around 17,000 families.

Technology Users Association of NZ (Tuanz) head Craig Young gave a nod to the new health IT spending and IT training for SMEs. But his headline take was that: "The Government has missed an opportunity to address the big issues that our members have identified such as the lack of technical skills to increase our digital and cybersecurity capability, and does not address the widening digital divide."

NZTech CEO Graeme Muller, "The budget was relatively devoid of tech." Photo / File

'Devoid of tech'

"The budget was relatively devoid of tech," beyond the Digitial Boost extension, NZTech CEO Graeme Muller said,

"With the Government close to publishing it's Digital Technology Industry Transformation Plan, I am hoping that somewhere in the budget under some macro economic development spend there is money set aside to activate the Transformation Plan. It includes really important investments such as the development and launch of Digital Tech Apprenticeships, investment in accelerating SaaS [software-as-a-service] exports, a National AI Strategy, a national digital twin, and support for the rapidly growing Maori Tech ecosystem."

NZRise cofounder Don Christie: "Digital infrastructure should be treated with same priority as roads, rail and public transport. Photo / File

NZRise cofounder Don Christie welcomed the spending on several new individual IT projects. But overall, it just did not seem to be a Budget that treated technology as a top-tier priority.

"Digital infrastructure should be treated on a par with other infrastructure. And given the value of assets that rely on stable, secure infrastructure we should be seeing this treated with the same priority as roads, rail and public transport," he said.

However, he also added the broader comment that the tech sector, like business as a whole, had benefited from the government's broader efforts.

"NZRise has always taken the position that in order for an economy to thrive we need a healthy, prosperous society. This validation of this position was demonstrated in spades last year and continues through the ongoing threat of Covid," said Christie, who is also a director of IT services company Catalyst.

"It's also fair to say that the business community in Aotearoa NZ was lucky to have such rapid and strong support from the government last year. Without that many of us would not have survived or would have been running on fumes and had no capacity to rebound.

"A refocus on health, benefits, greener infrastructure is welcome and overdue."