NZ minimum wage rates to increase by $0.45 from Monday, 1 April 2024
Employers will be subject to minimum wage increases from April this year.
Prior to the announcement, some software developers were already eligible for financial support from crown entity Callaghan Innovation (tasked with making New Zealand businesses more innovative), and some in the tech industry also benefited from the government’s research and development tax credit.
Recognising the immense cultural and economic impact of the rapidly growing gaming sector, the government has introduced a $160 million package to provide comprehensive support for its continued growth and innovation.
This package has started providing a 20% rebate on eligible expenditure for game development studios, effective 1 April 2023. To qualify, game development studios must meet a $250,000 minimum expenditure threshold per year with individual studios eligible to receive up to $3 million a year in rebate funding. The rebate will be administered by NZ On Air with the finalised criteria expected to be released in September.
While the rebate is smaller than the 30% rebate offered by the Australian government (up to 40–45% including state-based initiatives), it should go some way to help to retain New Zealand firms and talent. Budget 2023 lays the foundations for a low-emissions, high-wage economy with a major investment into our digital and technology sectors.
In an era defined by rapid technological advancements, the new $26.6 million digital skills package unveiled in the budget will go some way to help New Zealand keep up.
The package is part of the Digital Tech Industry Transformation Plan introduced in May 2023. With a focus on equipping individuals with the necessary tools to function in the digital age, it aims to bridge the digital divide and enhance employability. The programme has a focus on “learn while you earn” initiatives as well as providing industry experience while studying. The funding will support the development of apprenticeship-like pilot programmes, in-school programmes and an internship-matching service.
The programme also aims to make pathways into the tech sector more accessible for underrepresented groups such as Māori, Pasifika, women and the neurodiverse. It aims to increase women’s participation in the technology sector from 27 percent to 50 percent by 2030.
In the wake of Cyclone Gabrielle, the 2023 budget allocated $29.9 million towards the horticultural industry to advance horticulture technology. This funding will be used to establish the Horticulture Technology Catalyst initiative, through the Agritech Industry Transformation Plan. The initiative aims to increase collaboration across the New Zealand horticulture technology sector and its international connections, grow industry talent, and facilitate the successful commercialisation of research and projects.
The budget allocates an additional $40.5 million to the Elevate Venture Capital Fund, which aims to generate more innovative industries in New Zealand and lift productivity. The fund supports investment into Kiwi companies that have moved beyond the start-up investor phase and need capital for further development.
The budget also promised $15 million to extend the Equitable Digital Access programme, which provides free internet connectivity to 18,000 students from low-decile homes.
All these steps are welcome and will at least contribute towards making the economy more competitive and productive, especially in growth industries. However, broad strides by other countries competing for the same market (especially Australia) mean that New Zealand is still short on the bold steps needed to retain our talent and boost the tech industry.
Speak to your Baker Tilly Staples Rodway accountant for further advice.
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