The New Zealand Government’s 2023 Wellbeing Budget – ‘Support for today, building for tomorrow’ – has delivered investment focused on relief around immediate financial pressures impacting New Zealanders, boosting infrastructure, and building a resilient, high-wage economy.
Under its operating allowance of $4.8bn, however, today’s announcements offer little instant reprieve for SMEs and businesses weary from battling a challenging economic climate.
However, targeted support for tourism, growing the local talent pipeline with the extension of the Apprenticeship Boost initiative, rebates for businesses in the gaming sector, and investment in growing digital skills and capability in business, were the main investments revealed for the business sector.
Building the local talent pipeline
While both the technology sector and its appeal to those entering the workforce continues to grow, the talent pipeline of those entering the workforce has struggled to keep up with the pace of the sector.
The Government today announced a plan to help both bridge this gap and address the underrepresentation of women, Māori and Pacific peoples, with $27m invested in a Digital Skills package that forms part of its Digital Technologies Industry Transformation Plan.
Aimed at supporting the development of apprenticeship type programmes, this allocation is expected to cover: part payments for trainee wages, employer support, and set up costs for trainees.
Of the announcement of the policy, MYOB spokesperson - Jo Tozer, explains: “As a local SaaS business, MYOB is deeply committed to investing in skills development and training, and providing career pathways for people from all backgrounds, so we are encouraged by the investment from the Government into a Digital Skills package to further boost the efforts of local employers in this space.
“We firmly believe in the potential of our local talent and have seen first-hand, the benefits investing in growing local talent can bring – particularly through our own initiatives like DevelopHer and our Future Makers Academy – and we’d welcome the opportunity to be part of this discussion as the Government works through its next steps.”
For local businesses more broadly, an extension of the Apprenticeship Boost to the end of 2024 is expected to help 30,000 apprentices start or continue their career journey.
“With almost a third of businesses finding it difficult to fill vacancies, the ongoing skills shortage is constraining productivity and the ability of many businesses to grow, which is a major issue as we continue to face economic headwinds,” says Jo Tozer. “The Apprenticeship Boost extension will be a welcome relief for those in industries battling skills shortages or looking for new talent.”
Rebates for Gaming
The gaming sector was the big winner when it comes to business investment from the Government in today’s Budget, with a 20% rebate announced for game development studios with a minimum $250,000 expenditure threshold - backdated to 1 April 2023.
With the goal of supporting growth and job creation in mid-sized or large game development studios, this operating investment sits at around $40m annually over the next four years.
“While it’s great to see this investment in the growth of local mid-sized gaming enterprises, SMEs – which contribute more than a quarter of our annual GDP – would have greatly benefited from a similar approach to technology-related expenditure,” says Jo Tozer.
“Digitisation empowers SME owners to invest in the growth of their business. It is key to building resilient, productive and sustainable businesses. MYOB’s insights show that nearly 7-in-10 SMEs who have digitised parts of their business believe doing so made them more profitable, and our recent modelling revealed that investment in improving digitisation amongst New Zealand’s SMEs could deliver a gross benefit to our economy of $8.5bn.”
Tourism support details revealed
Following on from the Government’s reveal of the Tourism Better Work Action Plan, today’s Budget announced $18.2m will be dedicated to implementation efforts – specifically, helping operators in the sector increase capability, productivity and ultimately attract and retain workers.
“As travel continues to enjoy growth after an incredibly difficult few years, the tourism industry will be encouraged by more action being taken to deliver a much-needed boost and seeing the Action Plan for the industry move forward.
“While today’s announcement will go some way to benefit local operators, the effectiveness of this investment will ultimately come down to implementation,” Jo Tozer explains.