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ICT Downturn Must Be Seen As Temporary

NEWS RELEASE 30 NOVEMBER, 2001

ICT Downturn Must Be Seen As Temporary

The present downturn in the ICT industry must be seen as temporary because every sector of business and much of New Zealanders’ life styles depend on the innovative technologies the President of the Information Technology Association of New Zealand (ITANZ), Mr Tone Borren, said yesterday.

Presenting his report to the ITANZ Annual General Meeting in Wellington, he said he was not exaggerating when saying that this was likely to be the most difficult period for the industry over the past decade.

“The world economic downturn during most of this year has had an adverse impact upon the performance of the industry, and will be further exacerbated by the events of 11 September in America. However, it is probable that New Zealand’s performance will hold up better than that of many other countries.”

He said that together with member companies ITANZ had been involved in a number of meetings with Industry New Zealand to build strategies for stimulating ICT start-up, innovation and regional development.

“The information industry is being recognised as a central component to building sustainable economic capacity for New Zealand’s transition to a knowledge-based society.”

Mr Borren said the Government’s decision to allow research and development expenditure to qualify for immediate tax deduction from April 1 this year was a welcome relief, particularly for the software sector.

“But ITANZ continues to press for tax incentives at least on a par to those of main competitors, particularly Australia. Other countries use their taxation systems to accelerate research and development progress and New Zealand has to play by the same rules to compete effectively in this area.”

It was, he said, the view of ITANZ that fringe benefit tax regulations applying to the provision of personal computers for employees “fly in the face” of government aims to encourage the building of a knowledge society.

ITANZ supported the policies to implement e-government but was concerned that the programme still appeared to be under funded and that the e-government unit could not direct various departments and agencies in how funding is utilised to achieve e-government ends.

Mr Borren said ITANZ had objected to the late and arbitrary changes the Government had signalled regarding the imposition of mandatory mobile roaming regulation on mobile networks.

“We believe the process used by the Government in this instance creates huge uncertainty for firms planning major investments in New Zealand and could deter future foreign direct investment.”

The provision of adequate bandwidth throughout New Zealand was vital to the take-up of e-commerce. ITANZ was working with many members and the government on the issue and was keen on promoting the concept of aggregation of government services as a fundamental part of building commercially sustainable bandwidth across New Zealand.

ends

For further information:
Jim O’Neill
Executive Director, ITANZ
Tel: (04) 472-2731

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