If there is Government inaction in tomorrow’s Budget, this would be a strategic decision to consign the game development and interactive media sector to the dustbin, the New Zealand Game Developers Association (NZGDA) have said.

This follows the Australian Government introducing a 30% Digital Games Tax Offset (DGTO) from July 1, 2022, on top of 10-15% State rebates. This means that if New Zealand game developers shift their businesses to Australia, for eligible expenditure they can get a cash benefit of up to 45 cents in the dollar. So, every $1 million of expenditure costs effectively $650,000, whereas if they stay in New Zealand it will cost $1 million.

“Around 25 countries have some sort of incentive framework for their game development and interactive media sectors. Australia created the DGTO as a part of a wider investment in its technology sector, and it is a choice to invest in high-paying, low emission jobs,” said NZGDA Chairperson, Chelsea Rapp.

“Make no mistake – if the New Zealand Government chooses to do nothing to level the playing field with our Closer Economic Relations (CER) partner in tomorrows Budget, then it is making a strategic decision to kill off one of New Zealand’s greenest and fastest-growing sectors, which earns nearly half a billion dollars in weightless exports and employs 1,200 highly-skilled workers, and which is critical to our creative and digital economy ecosystem.

“The Government will be making an informed decision and will be saying New Zealand is better off strategically without the sector. We, and we think plenty of New Zealanders, disagree. 
“This sector grew 47% last year, provides high-value full-time jobs, generates impressive returns for unique IP, pays more than $100 million in tax (a figure which is growing all the time), and earns more dollars than the wool sector. If we can be as successful as Finland – which has a similar-sized population – we could earn $5 billion a year.

“The sector ticks all the boxes that the Government says it wants in documents like the Digital Technologies Industry Transformation Plan 2022-2032. And we know that if the New Zealand Government chooses to level the playing field with our CER partner, there will be plenty more tax to pay into New Zealand’s coffers, rather than Australia’s. has significantly greater benefits for the New Zealand Economy.

“Let's hope our government takes action in the Budget. It is critical to our digital economy,” Ms Rapp concluded.

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