Government slammed over tech policy inaction in wake of CTO debacle

Wednesday, 31 July 2019

The Government's technology leadership is being called into question.

The Government has brushed off criticisms it has provided weak leadership of the technology sector since abandoning a plan to appoint Derek Handley as national chief technology officer last year.

Handley received $107,000 compensation in September after the Government rescinded an offer to appoint him as the country's first CTO in a debacle that prompted the resignation of former communications minister Clare Curran.

NZTech, which represents more than 1000 organisations with an interest in technology, said the sector was the fastest growing part of the economy and employed more than 100,000 people.

But businesses needed 'more guidance and commitment from the Government' to indicate where their focus was with regard to critical technologies, chief executive Graeme Muller said in a statement, which said the need for a coordinated strategy was now urgent.

The Government is being called on to provide more guidance and commitment to the technology sector.

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Muller noted the one of the functions of the CTO would have been to help develop a coordinated technology strategy.

'This seems to have stalled and what work there is seems to be fragmented across the machinery of government,' he said.

Don Christie, a director of Wellington IT firm Catalyst and former co-chair of industry association NZRise, said NZTech had a very valid point and that from 'an innovation perspective' the sector had 'stood naked' since 2008.

NZTech chief executive Graeme Muller says lack of leadership in technology has major implications for economic development and broader society.

'It is quite clear that with Clare Curran's demotion, the Government lost focus and energy and put the digital sector effectively into holding pattern.'

That meant the Government would struggle to achieve its goal of making technology the second-largest contributor to GDP by 2025, he said.

A spokesman for Government Digital Services Minister Kris Faafoi says the $500,000 budget for the functions that were to have been provided by a chief technology officer is still available and decisions will be made 'in due course'.

Ministers scrapped the plan to create an individual CTO in December in favour a new approach that was expected to see small group of expert advisers take on that function.

A spokesman for Government Digital Services Minister Kris Faafoi, who is currently visiting Tokelau, said a promised paper had gone to Cabinet and denied the process had stalled, saying the $500,000 budget that had been allocated to the CTO initiative was still available.

Catalyst director Don Christie says it is quite clear the Government lost focus after the CTO debacle.

'The minister is working on the implementation of tech sector leadership, the specifics of which will be announced in due course,' he said.

Muller said there were 'parts of the Government' that understood the impact that rapidly changing technology would have on New Zealand.

Software from German giant SAP has become 'the default' for government agencies, Don Christie says.

'But where is the 'fintech' strategy? A plan for the impact of technologies like blockchain and cryptocurrency on our financial system?

'How about a biotech strategy? A plan for economic growth through bio-based technologies, and how New Zealand intends to manage genetic modification.'

The non-appointment of CTO candidate Derek Handley was a bruising political experience for the new Labour-led government.

'The elephant in the room' was the apparent lack of government attention on the impact of artificial intelligence, he said.

'If we could do with one cohesive strategy more than any other it would have to be artificial intelligence, given that this rapidly advancing technology is touching every sector and almost every piece of government policy.'

Faafoi's spokesman said the Government had demonstrated commitment to the technology sector in the Budget, for example by establishing a new $300 million fund alongside the Superannuation Fund that would provide expansion capital for young technology businesses and allocating $157m to initiatives to help businesses become more productive and to lower carbon emissions.

Christie said some of the Government's actions had run counter to its goals.

There was 'no question' the Government's approach to research and development tax credits would adversely impact software development in New Zealand, he said.

'Part of this is snobbery about computer science not being a real science.'

Christie said the Government's decision not to be a full member of the international Square Kilometre Array radiotelescope consortium also did not tie-up with its stated digital ambitions.

'We see good work coming out about procurement, but they are still not making the strides they need to make,' he said.

'They say they need to make sure there is more access for New Zealand businesses, but the actions don't match the words.'

Christie said there was some good, 'joined-up' thinking happening, pointing to a New Zealand Transport Agency tool that Catalyst helped develop to assess the security implications of software changes and which was now being shared across government agencies.

But the Government was throwing money at German business software giant SAP 'like confetti', he said.

'They are spending hundreds of millions of dollars rolling out uncontested SAP platforms across government. They have got an 'all-of-government' agreement with SAP and they just become 'the default'.'

Government digital identity service RealMe was getting $100m a year in operational funding and was 'far behind' its business case, he said.

The problems that dated back to 2008 included a lack of recognition of the need to build 'national and institutional capability' and policies such as going to closed panels of suppliers for tenders, he said.

Faafoi inherited the government digital services portfolio from fellow minister Megan Woods in June and Christie said the first thing he needed to do was to get out and talk to people.

'I know he is also a senior minister and has a lot of portfolios, but this is one of high importance to our economy,' he said.

Muller said NZTech's concerns had implications for economic development and broader society.

The Government had put a lot of effort into the 'future of work' but that was quite a narrow lens through which to look at the implications of technology, he said.

'There is still this missing view.'