Let’s tech this: Labour takes on National in ICT

Which of National or Labour has the best technology policy? Your answer (and your vote) will depend on how business-friendly you are.

National’s attitude to tech is so entwined in its trade policy, that it’s hard to know what else it stands for in tech. Whereas Labour takes a broader view, founded on values like digital equality and privacy protection. Labour wants technology to be accessible to all New Zealanders, not just corporations.

Technology is already a fast-growing business in New Zealand. It’s the third biggest export sector in this country, having racked up $6.9 billion of export revenue last year according to the Technology Investment Network (TIN). As a comparison, figures from the Department of Statistics put dairy exports at $11.16 billion and travel and tourism earnings at $10.2 billion.

National clearly wants to continue that export growth, since technology is a key part of its trade policy. There it talks about continuing to invest in infrastructure (such as ultra-fast broadband), investing in “innovation programmes” across various sectors, and pushing for a Trans-Pacific Partnership without the United States.

Labour’s technology policy is wrapped up in a document entitled Jobs and Innovation, which is a good indication of where its priorities are. The Labour Party wants tech to create more jobs and add to our Gross Domestic Product.

Indeed, Labour’s stated goal in that document is for the ICT sector to be our second-largest contributor to GDP by 2025.

The problem is, ICT isn’t actually tracked in official GDP figures. Instead Labour has used figures from a 2016 report by the New Zealand Technology Industry Association (NZTech), which declared that the ICT sector contributed $12.5 billion to our GDP in 2015. That’s 6.2% of total GDP, according to NZTech. If you add in high-tech manufacturing, then the “combined tech sector” accounted for 8% of GDP.

However, it’s difficult to compare these statistics with other sectors. NZTech’s report doesn’t say how ICT currently ranks, compared to dairy or tourism.

So how will we know if or when ICT becomes the second-largest contributor to GDP? I reached out to Labour MP Clare Curran for comment. She acknowledged that “there are many ways to measure ICT, as there is not a discrete Stats NZ industry sector.” She resolved that Labour “will fix this in conjunction with industry groups.”

Labour has also written a seven-page ICT manifesto. There it promises to reduce barriers “in education, in the way we treat contractors and in our investment in research and technology.” But it doesn’t specify how it will reduce these barriers, other than by general measures like developing an action plan and engaging industry groups.

One area where National and Labour diverge in terms of tech policy, is how to fund research and development (R&D). National believes that grants are the way to go, whereas both Labour and the Greens favour tax credits.

At the recent Digital Future Panel debate held in Wellington, National Party ICT spokesperson Brett Hudson claimed that the former tax credit system was “rorted.” He said that the current system of allocating grants to worthy technology companies, via the government agency Callaghan Innovation, is a much better solution. That’s because Callaghan grants, he said, include an inherent test of whether an idea is worth backing. Callaghan will only give out money if private investors (such as angel investors) also back it with their money.

National is planning to boost Callaghan grants even further. In May, it announced an additional $74.6 million in funding.

Labour’s Clare Curran said that its investment in R&D will primarily be funded through 12.5% tax credits. It will also introduce grants for young entrepreneurs. The Green’s Gareth Hughes also prefers tax credits to grants, saying they’re “easier and less bureaucratic.”

Another Labour pledge is to get multinationals to pay their fair share of tax. It’s well known that the big tech companies, like Apple, Google and Facebook, pay minimal tax in New Zealand. Labour plans to give the IRD “an additional $30m per year to crack down on multinational tax avoidance.” This crackdown will be the equivalent of a very small flea in the ear of Mark Zuckerberg and co, but it will strike a chord with kiwi taxpayers.

Both Labour and the Greens want to overhaul IP and copyright regulations, so that they’re not so restrictive for individuals. The Green Party is particularly keen to reform NZ software patent laws and introduce a more modern copyright legislation – for example, better “fair use” provisions for Internet sites.

National is more cautious on this front. Since the current patent and copyright laws are more supportive of corporations than consumers, National’s Brett Hudson favours a balanced approach to “protect our innovators.”

So who would you vote for, if this election was just about technology policy?

I suspect it won’t come down to which of method of giving out R&D money you prefer. It’s more likely to be a question of whether you view technology as primarily an enabler of trade, or whether you also want technology policy to address digital equality and local jobs. There is a clear choice between National and Labour on those issues.