There was nothing dished out specifically aimed at the tech sector in today's budget, though the 15 per cent research and development credit tax credit will help out those companies trying to innovate.
That measure will be worth $630 million over four years and should prove an incentive for
private software and hardware makers to increase their R&D.
In addition to the reduction of the company tax rate to 30 per cent from 33 per cent, that's not a bad result. But again, there was nothing visionary, nothing that will stimulate the growth and development our IT industry needs, or improved levels of foreign investment. It's interesting that Winston Peters name-dropped Singapore and Ireland in his speech and how we need to follow their lead. Well, when it comes to support of the tech sector, we haven't taken a single leaf from their book, which is full of lessons in how to build a thriving industry.
Research, science and technology funding gets a modest $73.7 million boost over four years. That funding and $34.6 million n "reallocated" funding will be aimed at developing business productivity and sustainability measures.
The National Library and Archives NZ also received a decent injection of funding ($17.6 million between them) for digital archiving projects and to implement the Digital Content Strategy, which is aimed at getting silos of information online in a useable format. That will be money well spent.
The move to introduce a tax exemption for "active income" ie: income from the overseas-based manufacturing and distribution divisions of New Zealand controlled companies, will encourage our tech companies to pursue global expansion, but not to migrate overseas in pursuit of lower tax rates.
