NZ Fry Up: Tax and tech; NZTech’s take on tech regulations; E-bikes as a service; Don’t forget about Safari

New Zealand IT, tech, and telco news and views from our editor in Auckland.

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Tax and tech: software development views

As part of Inland Revenue’s review of policy and practices around taxing software, it has enlisted NZTech, which has 22 technology associations under its wing, to better understand the sector. To that end, NZTech has published results from a survey it conducted this month.

It only received 60 responses so, while not statistically significant, “it does show the breadth of business models and approaches to tax treatment of software development currently being used.” More than two-thirds of respondents have annual revenue more than $500,000, and almost half of respondents (47%) say 81% to 100% of revenue comes from developing software.

Here are some of the highlights:

  • 75% say tax implications for developing software posed a significant issue for their business.
  • 62% expense software development, while 18% capitalise it, and the remainder do both.
  • Software development is funded by respondents as follows: from revenue (65%), from equity (28%), and from business units (7%)

While there may be a bias in that those who bothered to respond to the survey are those with the concerns, 62% thought current accounting rules are inadequate. One respondent noted that “current rules are heavily focused on the traditional fixed-asset-reach or service-based technology businesses, but poorly address the needs of information-based technology sector, which works mainly on the cloud software-as-a-service or platform-as-a service business models (think PushPay, Xero, Message Media, Netflix, Twilio, Plexure, etc.).”

NZTech’s take on tech regulations

While you might expect NZTech to be all over policy around how to tax software companies, it’s less obvious why it should comment on draft legislation such as the Reserve Bank of New Zealand Bill or the Water Services Bill. But NZTech CEO Graeme Muller points out the organisation’s submissions on this draft legislation are a way of ensuring that technology isn’t overlooked in all aspects of New Zealand life. “One of NZTech’s objectives is to help the government understand the opportunities and risks of tech,” he says.

In its submission to the Reserve Bank of New Zealand Bill, NZTech notes the lack of “legislative enablement” for a Central Bank digital currency (CBDC) that can sit alongside physical notes and coinage.

“Just as the Reserve Bank’s operational independence in the 1980s was the vanguard for a global central banking revolution, NZTech believes enabling a CBDC in this bill would become this generation’s equivalent. It makes RBNZ a potential first-mover. Without legislative enablement, there also exists the risk that rapid developments external to New Zealand may result in rapid legislative solutions domestically. This may be harmful to fintech in New Zealand and the benefits therein to the wider economy, consumers, and society,” the submission notes.

Meanwhile, in the Water Services Bill, NZTech points out that there is no mention of the internet of things (IoT), sensors, data, or location technology that could enable real-time monitoring. “In the past three years, there has been considerable technological advancement bringing this within the reach of domestic self-supply, matched with greater penetration of broadband. While understandable that bill drafters do not wish to be prescriptive, failing to signal technology misses whole of government policy synthesis while creating technological expectation.”

E-bikes as a service

The concept of software as service has spread throughout the IT stack, with infrastructure as a- service and platform as a service joining the on-demand service concept. Now, it is becoming common to see the idea of a providing a product as a service for a monthly fee in other sectors, such as electric vehicles.

Kiwi eco-tech company UBCo (Utility Bike Company) is pitching its utility electric bikes to the farming sector, following investment from Carbn Group and the New Zealand Green Investment Fund, the Crown-owned company formed to kickstart investment that reduces greenhouse gasses. Carbn will provide asset finance to UBCO finance as a special purpose vehicle which provides the subscription. This is not a capped facility so it has the ability to grow as the subscription market grows, a spokesperson told Computerworld New Zealand. In New Zealand, the transport sector accounts for 19% of greenhouse gas emissions.

UBCo will offer use of its utility vehicles, including its off-road 2x2 work bikes, as a monthly subscription service, which means upfront investment and ongoing maintenance—and eventual battery disposal—will be taken care of by the company and not the customer.

CEO Timothy Allan estimates that the New Zealand farming sector alone (51,000 farms) represents a $1.4 billion opportunity for UBCo. It has already trialled the service with the Domino’s pizza chain in the cities. Farming customers will be in the $70- to $80-a-week range, while pricing for urban consumers price is still under development.

Waikato farmer Grant Coombes, who already owns a fleet of UBCo e-bikes, says energy costs are less than 20c a day, and bikes are charged every three to four days.

Don’t forget about Safari

Every IT makeover has its challenges, and things can be overlooked at every stage—from the planning and the execution—through to the comms.

So, when we saw the public notice telling those using the government’s identity service RealMe to upgrade to a new browser, we were surprised that Safari wasn’t on the list. Google Chrome, Mozilla Firefox, and Microsoft Edge made the cut, but not Apple’s Safari. What gives?

Turns out it that at fault was the comms phase in the Department of Internal Affairs (DIA) project to shift RealMe citizen digital identity services to the cloud. A spokesperson let us know straight away that it had been mistakenly left out of the notice. For the record, RealMe won’t work with Internet Explore after Friday, 9 April 2021, and people are advised to shift to one of three four modern browsers ASAP.

The project involves moving from the current infrastructure-as-a-service platform to a new cloud-based Microsoft Azure platform, working with vendor Unify Solutions. When the contract was announced last year, DIA said that the new platform is for the RealMe login and assertion services only. The RealMe identity verification service won’t move to Azure; it will remain under existing data-hosting arrangements with Datacom.

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