New Zealand’s incumbent coalition government has confirmed it will continue offering a 20 percent tax rebate to game studios in the region.
Studios in the country have produced notable titles like Dredge, Before We Leave, and Path of Exile, but it was unclear how–or indeed if–the government would continue supporting local creatives following the general election in October last year.
As reported by local outlet Newshub, the future of the Game Development Sector Rebate was thrown into doubt when ACT leader David Seymour described it as “corporate welfare.” The ACT Party is a member of the newly-formed coalition government alongside the National Party and New Zealand First.
Despite those remarks, technology minister and National Party member Judith Collins has now confirmed the rebate–which is worth $40 million NZD per year–will still be offered under the new regime.
“In the last Labor budget put forward it was one of the best things in it and probably the only good thing,” said Collins, speaking to Newshub. “This is an industry that once it gets on its feet—once it gets going—is really going to go gangbusters.
“The Finance Minister, the Prime Minister and I have all said we support this sector. It’s a commitment that you have a lot of support at the very top of the Government. I look at it and I get why people love it.”
Game Development Sector Rebate a “huge bonus” for local developers
New Zealand Game Developers Association (NZGDA) chair Carl Leducq indicated the rebate has been crucial in helping those creating games in the region to compete on the world stage.
“In the games ecosystem, having something like the 20 percent game sector rebate is a huge bonus that helps put us on the same playing field as other countries in the world,” he said.
“The game market in Finland, they have a revenue of over $6 billion NZD annually and they are a similar size to New Zealand. So, they really showcase the potential of where the New Zealand game industry could become if we had that support over time.”
According to the 2023 NZ Games Industry Survey, published by the NZGDA, studios based in the country earned $434.4 million during the year ended March 31, 2023.
It was, however, noted that “fierce competition from Australian tax incentives” and other factors hampered year-over-year growth, with sector revenue increasing by 7 percent year-on-year. That’s a significant decrease on the 47 percent growth reported during the previous year.
“Australia’s tax incentives deeply affected our industry over the past two years, constraining our studios in the battle for talent and curbing growth,” said Leducq, commenting on the report.
“However, the commitment to the New Zealand Game Development Sector Rebate means the sector’s strong growth will resume. Our studios have stood strong amidst these challenges, and I am certain of their resilience and potential for future success.”
It’s a situation that highlights how crucial government support is to developers plying their trade in New Zealand, especially if those in power want to ensure key talent remains in the country.