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 cyber-security, 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.

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We did get one meat-and-potatoes move. Over the next two years, the Government will invest $44 million in continuing the Digital Boost – business training courses for SMEs (including free online videos and how-tos), and providing new digital business advisory services to help Digital Boost graduates. adopt digital ways of working in their businesses.

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

And there was a sensible move $230m was earmarked for a new, centralised patient record system 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.

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; $20mfor 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 5Gauction 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.

“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 says.

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

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 the opportunity to advance a holistic digital strategy that addresses 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.”

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.

“I would argue that 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 same priority as roads, rail and public transport,” he said.

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