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Budget 2020: Support for e-commerce, emergency comms services announced

Where Budget 2019 was full digital funding, Budget 2020 emphasises recovery from COVID-19
Grant Robertson, Minister of Finance.

Grant Robertson, Minister of Finance.

Where last year's Budget was full of funding for a range of government and business transformation initiatives, the emphasis has well and truly changed in this pandemic year.

For struggling businesses, an eight week extension of the existing wage subsidy, which has been claimed by many ICT firms, was announced to help them and to keep people in employment.

Minister of finance Grant Robertson also delivered a battle cry at the end of his Budget speech, suggesting the government was intent on pursuing a different agenda.

Borrowing and spending featured large. $50 billion in borrowing in the June 2021 year with more to follow would go towards funding an array of other stimulus programmes across infrastructure, training and education and conservation projects, among others, to deliver jobs.

The technology pot was not entirely empty, however.

Robertson said that trade would play a significant role in kickstarting New Zealand’s recovery from COVID-19. 

"We are providing a $216 million boost to New Zealand Trade and Enterprise to expand the scope and intensity of support provided to exporting firms," he said.

This includes increasing activity for New Zealand firms in priority markets and expanding the digital services available for firms.

"COVID-19 has brought home the increasing importance of e-commerce for our small businesses," Robertson said.

"We are setting aside $10 million in funding to support small businesses to improve their e-commerce service offerings, and incentives/grants to encourage e-commerce adoption."

Robertson said the government would also provide further support for business advice, the e-invoicing project, Business Connect and the Better For Business programme.

One other specific initiative to win funding was the Next Generation Critical Communications (NGCC) programme being led by Crown Infrastructure Partners for Fire and Emergency NZ, St John Ambulance and Wellington Free Ambulance.

The NGCC programme was voted $15 million in last year's Budget to initiate the programme, establish governance arrangements and prepare for a procurement to replace the existing emergency communications systems, which are approaching end-of-life.

This year it received $47.8 million in operational funding to establish the new service.

The existing system has to be kept up and running in parallel, according to a mid-2018 project concept brief, which said full transition would happen by the end of 2023.

The Government also announced it would pump $280 million into New Zealand Post which was considered no longer commercially viable at its current service level.

Signalling a significant change of tack, Robertson said the "glimmer of silver lining on this darkest of clouds comes from the knowledge that we have the opportunity to build back better". 

"There are few times in your life when you get to hit the reset button. It is a privilege that many countries do not have right now as they still struggle to get the virus under control. 

"It is an opportunity we will not squander. Our rebuild must be one that takes the very best of who we are, and uses it to take on the issues and challenges in front of us. 

"Some of them are old – inequality, low productivity, polluted rivers, some are newer, the transition to a low carbon economy, adjusting to the rapidly changing world of work, maintaining social cohesion."

Robertson said the "economic carnage" of the 1980s and 1990s was based on a "tired set of ideas that the market would save us".

"Well, it didn’t work out that way and lives and livelihoods were lost," he said. "That will not happen again, not on the watch of this government."

In response, leader of the opposition Simon Bridges warned of a "tsunami of debt" and emphasised the need to get New Zealand working again while keeping the debt low so that future generations would not be saddled with it.

Reciting a catalogue of programmes the government had struggled to deliver, most prominently Kiwibuild, he said businesses needed specific solutions from a government that could deliver.

"Let's back and trust every day New Zealanders to succeed," he said. "Let back New Zealanders and get New Zealand working again."

A specific package for tourism, heavily hit by the pandemic, was also announced with more industry packages promised.

This year's Budget was unusual in that no moratorium on government announcements could be applied due to the pandemic, therefore some of the usual Budget documents  are not yet available.