Game Developers Have Had A Constructive Meeting With Digital Economy Minister

The New Zealand Game Developers Association (NZGDA) met with the Minister for the Digital Economy and Communications, Hon Ginny Andersen, late last week. 

The purpose of the meeting was to further raise concerns around the impact of the Australian Digital Games Tax Offset (DGTO) policy, and to reiterate the solution that the New Zealand Government should implement immediately to stop the New Zealand sector being decimated.

“It was a constructive meeting,” Chelsea Rapp, NZGDA Chairperson said. “We can’t speak for the Minister, but it appears the Minister understands our concerns regarding Australia’s federal government implementing a 30% Digital Games Tax Offset (DGTO) on top of the existing 10-15% state rebates. That means that for every $1 million of qualifying expenditure we could see a $450,000 cash benefit to New Zealand companies who move resources to Australia rather than stay in New Zealand. 

“This is already seeing our top talent poached by Australian companies, New Zealand companies setting up in Australia, and international investment being diverted to the Australian sector. If this continues, our industry will be decimated and New Zealand will be far worse off.

“New Zealand will lose its fastest-growing export sector (47% growth p.a.). A sector that ticks so many boxes for the government’s goals of transitioning to a high-wage, low-emission, export-led and diversified economy. It’s a landing pad for the “just transition” to decarbonise the economy.

“Worldwide, there are over 20 similar schemes with 25% to 40% incentives, including in the United Kingdom, Canada and Europe. New Zealand has nothing. Finland, with a similar population to New Zealand, has managed to grow its game development sector to over $5 billion.

“This is an urgent issue that needs urgent action by our Government. The May 18th Budget is the time to announce a policy response. The New Zealand sector needs certainty now to retain and continue to grow the sector here. 

“We have asked the Minister to introduce a 30% Interactive Digital Media Rebate to stop the loss of highly-skilled talent to Australia. This would protect our existing jobs and create thousands of additional high-wage jobs over the next 10 years while lifting wages.

“We estimate the cost of the policy at approximately $35 million annually, which saves the $100 million our sector is already paying the government and retains the growth path we are already on to the benefit of all”.

“We need to know if the government is going to ensure there is a level playing field with our Closer Economic Relationship (CER) partner or not. We need to know that the government actually supports the digital economy and our sector, which is a critical component to its success. We have urged the Minister to act.

“If our government does nothing, it simply means it is happy for a key component of the digital economy to be decimated, thus consigning our fastest-growing, green jobs, leading-edge sector to the dustbin.” 

“We have asked the Minister to act. Yes, we understand that every budget is about juggling priorities, and that this one will be no different. The challenge is whether the Government can see the strategic imperative for levelling the playing field by investing in such an important up-and-coming sector for New Zealand’s future,” Ms Rapp concluded. 

For more data on New Zealand’s interactive media sector see: https://nzgda.com/news/nz-interactive-media-industry-survey-2022/

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