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• Output Class - Policy Advice - Business and Competition
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances
• Output Class - Administration of Part II Tariff Concessions
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances
• Output Class - Administration of Trade Remedies
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances
• Output Class - Registration and Granting of Intellectual Property Rights
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances
• Output Class - Administration of Insolvencies
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances
• Output Class - Registration and Provision of Statutory Information
  • Description
  • Quantity, Quality, Timeliness and Cost
  • Major Budget Variances

Output Class - Policy Advice - Business and Competition

Description

This output class provides advice on the effective and low-cost regulation of economic activity. It includes strategic and technical policy advice on the creation and maintenance of a regulatory environment that provides greater certainty for, and positively encourages business innovation and growth.

Quantity, Quality, Timeliness and Cost

Work Programme

All policy advice projects were delivered in accordance with the terms of the work programme as agreed with the Minister. Changes to deadlines were negotiated with the Minister.

Key Deliverables in the Work Programme for 2003/2004

Business Law Reform

Obtain Cabinet approval for a Securities Trading Law Reform Bill relating to insider trading, market manipulation offences, the scope of securities trading law and related matters, by 30 June 2004.

A draft Bill was released for targeted consultation in April 2004 for four weeks. A report has subsequently been submitted to the Minister providing comprehensive advice on the issues. The Bill will be introduced into the House in accordance with the legislative timetable.

Obtain Cabinet approval for a Financial Reporting Amendment Bill relating to the financial reporting requirements for the full range of business entities and the role of New Zealand in the international accounting standard setting process, by 31 March 2004.

Progress on this work has been influenced by the development of coordination with Australia. To reflect the greater complexity of the work than was originally envisaged, on 15 March 2004 Cabinet agreed to split the review into two parts. A discussion document on the first part of the review on the definition of "reporting entity" was released in February 2004 and was reviewed by the Economic Development Committee in July 2004, as directed by Cabinet.

Intellectual Property Law Reform

Provide advice and support to the Minister of Commerce to facilitate the passage of the Patents and Plant Variety Rights Bill through the House of Representatives.

Policy decisions were taken in July 2003 to update the Patents and Plant Variety Rights Acts in part to take account of technological developments. Drafting instructions on Patents and Plant Variety Rights were provided to the Parliamentary Counsel Office (PCO) in December 2003 and March 2004 respectively. Amending legislation will be drafted by the PCO in 2004/2005.

Provide advice and support to the Minister of Commerce to facilitate the passage of the Copyright (New Technologies and Performers Rights) Bill through the House of Representatives.

Drafting instructions for the Copyright (New Technologies and Performers Rights) Bill were provided to the PCO in early 2004. Amending legislation was being drafted by the PCO at 30 June 2004.

Government's Regulatory Impact Analysis and Compliance Cost Reduction Programme

Provide ongoing education and training courses to departments on Regulatory Impact Statement (RIS) and Business Compliance Costs Statement (BCCS) analysis. This will be completed through both individual and small group training and the provision of general training courses for departments.

The Ministry provided targeted training sessions on undertaking RIS/BCCS analysis to government departments and agencies throughout the year. In addition, the Ministry provided one on one training to authors of RIS/BCCSs.

Trans-Tasman Regulatory and Business Law Coordination

Work with agencies, industry and the Productivity Commission to develop New Zealand's strategic position in relation to the review of the Trans-Tasman Mutual Recognition Arrangement (TTMRA) to be completed by 31 December 2003.

The TTMRA mandated a review after the first five years of operation. The Australian Productivity Commission review study of the TTMRA has been completed and senior officials of the Committee on Regulatory Reform, including New Zealand officials, provided a first interim report to Heads of Governments, including the New Zealand Prime Minister, on the Productivity Commission findings in December 2003.

A sub-group of officials was established in May 2004 to conduct the formal inter-government review. This group has been charged to develop final recommendations to Heads of Governments by 30 September 2004.

Advance the work programme under the Memorandum of Understanding on Business Law, including capital markets.

The Closer Economic Relationship (CER) statement provided an update on the work programme. The Governments agreed to establish an advisory group to formulate advice to the two governments on establishing a single set of trans-Tasman accounting standards and maximising the two countries' influence on developing international accounting standards. The Group had its initial meeting in May 2004.

Post-2005 Tariff Policy

Finalise policy advice to the Government on post-2005 tariff policy and implement the decisions by 31 December 2003.

The Ministry led a full tariff review in 2003 to identify the post-2005 regime, consulting widely with business, government departments and other stakeholders. Policy recommendations were sent to government for discussion in August/September 2003. The Government announced its decisions on 30 September 2003 agreeing to a programme of tariff reduction.

Participate, with Australia, in a fundamental review of Closer Economic Relationship (CER) Rules of Origin (ROO) to be completed by 30 June 2004.

The first joint progress report to Australia/New Zealand Ministers was completed in March 2004. Further progress on ROO was delayed due to an Australian Cabinet decision to defer decisions on intermediate inputs until the final Report of the Productivity Commission on ANZCERTAROO was released at the end of May 2004.

By 30 June 2004 bilateral discussions on reform of the ROO had delivered an in-principle way forward.

Multilateral, Regional, Bilateral Trade Agreements

Undertake research and participate in negotiations relating to the development of new Closer Economic Partnerships (CEPs) /Free Trade Agreements (FTAs), including those with Hong Kong, Chile and possibly the United States.

The Ministry made a significant contribution to FTA negotiations. Negotiating sessions for P3 (New Zealand/Chile/Singapore) were held in Wellington and Singapore. Chile postponed a meeting set down for late-November 2003, to further consult with domestic stakeholders, but discussions are due to re-commence in August 2004.

Negotiations for a CEP with Thailand were well under way at 30 June 2004. A feasibility study had been completed with Round 1 of the negotiations held from 15-17 June 2004 in Wellington.

Negotiations with Hong Kong remained on hold at 30 June 2004.

Participate in the World Trade Organisation (WTO) Doha Round negotiations in relation to a wide-ranging number of areas, including tariffs, non-tariff barriers, government procurement, competition policy, intellectual property and services.

The Ministry undertook a significant amount of work in the lead-up to Cancun, particularly in the areas of tariffs for industrial goods, government procurement, trade remedies and competition policy. After a lack of progress following Cancun some areas of negotiation have since gained some momentum and the Ministry provided input in particular in the dumping and subsidies area, and New Zealand's wood processing initiative in the Non Agriculture Market Group.

Building Industry Regulatory Policy

The development of a new regulatory regime for the building industry particularly:

• new institutional arrangements for regulating the building industry;
• obtain Cabinet approval for a Building Bill to be introduced into the House of Representatives by 31 August 2003 with the passage of the proposed Building Act in accordance with the legislative timetable; and
• obtain Cabinet approval for an Architects Bill to be introduced into the House of Representatives by 31 August 2003 with the passage of the proposed Architects Act in accordance with the legislative timetable.

A Building Bill and Architects Bill were introduced to Parliament on 29 August 2003 and 15 October 2003 respectively. These repeal and replace the Building Act 1991 and the Architects Act 1963. They provide for a new strengthened regulatory framework for the building industry.

On 30 June 2004 the Government announced that the functions of the Building Industry Authority, a Crown entity, and the building industry regulatory policy function from the Ministry of Economic Development would be situated in the Department of Building and Housing from 1 December 2004.

Information Technology

Development of policies to support the Government's goal of high speed (broadband) Internet access being available in all New Zealand communities.⁵

At 30 June 2004 this project was largely on track to achieve the Government's target of "all schools and their communities to have broadband access by 31 December 2004" (it is expected that a few schools will require until April 2005 to be completed). The interim target of substantially having this in place by 31 December 2003 was achieved with 91% of telecommunication lines having broadband availability.

Environmental Regulation

In conjunction with the Ministry for the Environment, ERMA New Zealand and other interested parties, provide advice on measures to improve the operation of the Resource Management Act (RMA) and Hazardous Substances and New Organisms Act (HSNO) for business, by 30 June 2004.

The Ministry contributed to advice on measures to improve the Resource Management Act 1991 and the Hazardous Substances and New Organisms Act 1996. In particular:

• the Ministry contributed to the development of RMA policy in 2003 including the development of the Waitaki legislation, which is designed to create an improved process to decide the use of water from the Waitaki River and catchment. At year-end the Ministry was assisting with the RMA review which is being led by the Associate Minister for the Environment; and
• working with the Ministry for the Environment, the Ministry contributed to the implementation of aspects of the Hazardous Substances Strategy.

Projects Not Included in the 2003-2006 Statement of Intent

Free Trade Agreements (FTAs)/Closer Economic Partnerships (CEPs): China and ASEAN.

The decision by the Government to pursue FTA negotiations with China, on the completion of a joint study added a significant new dimension to the inter-departmental work programme on CEPs. The Ministry provided a member of the inter-departmental task force and is closely involved in the consultation and analysis process. A joint feasibility study was well advanced at year-end. Following completion, it is expected that negotiations for a FTA with China will commence early in 2005.

Further prospects with ASEAN have also been identified.

Development of a draft Digital Strategy.

The Ministry led a whole-of-government initiative to develop a digital strategy for New Zealand covering the major areas of transforming government, digital divide, business growth, security, ICT infrastructure, and digital content.

Crown Entity/Statutory Board Monitoring

Monitoring and reporting was provided to the Minister on seven Crown entities and eight Statutory Boards on financial and non-financial performance. This included advice on role and functions, appointments, and on the overall contribution of each organisation to the Government's policy objectives. As appropriate to each organisation these were reflected through:

• the Statement of Intent;
• the Memorandum of Understanding or Purchase/Output Agreement;
• management reports (for reference as appropriate to the Minister);
• meetings and reports to the Minister; and
• the Annual Report.

In 2003/2004 a total of 41 appointments were made, within agreed timelines, to Crown entity and statutory boards, as positions for renewal or appointment fell due.

Advice was provided on and appointments made to the following organisations:

Cost

(Figures are GST exclusive)

Sources of Revenue Other

Major Budget Variances

The Supplementary Estimates increase reflected funding for travel costs in support of WTO negotiations and bilateral CEP/FTAs ($295,000) partly offset by a funding transfer from 2003/2004 to 2004/2005 for research into possible negotiation of a FTA with the USA (-$133,000), a transfer to Vote Consumer Affairs to meet cost pressures (-$25,000), and Engineers Registration Board services no longer provided (-$18,000).

The variance between the Supplementary Estimates and actual expenditure mainly reflected under-expenditure due to delays in filling personnel vacancies, delays in completing a report seeking to synthesise a range of studies and literature on compliance costs in New Zealand, and delays in establishing the Charities Commission. In addition, travel costs were underspent due to the P3 negotiations not taking place during the year, final negotiations relating to the Hong Kong CEP not proceeding, and the decreasing prospect of an outcome for competition under the Doha Round resulting in dropping two scheduled trips to the WTO Joint Working Group on Trade and Competition. The under-expenditure was offset to some extent by increased building industry policy consultancy costs, increased costs in relation to the IT digital strategy, and a new project to review the Unit Titles Act. (In-principle expense transfers have been approved for the synthesis report and the Charities Commission establishment.)

The major changes between 2003/2004 and 2002/2003 actual expenditure reflect the changes referred to above as well as increased funding for the administration of the Government's Regulatory Impact Statement/Business Compliance Cost Statement regime, building regulatory policy work transferred from the Department of Internal Affairs from 1 January 2003, increased funding for travel costs in support of WTO negotiations and bilateral CEP/FTAs with China, Singapore and Chile, and the transfer of the trade remedies policy function from Administration of Trade Remedies to align output class activities better.

Output Class - Administration of Part II Tariff Concessions

Description

This output class provides administration of tariff concessions through timely assessment of applications by importers for exemption from import duties as defined by the tariff concessions policy.

Quantity, Quality, Timeliness and Cost

(Performance standards are in brackets where applicable.)

Quantity

Applications by Importers:

• 466 (500) applications were lodged.

In the year 2000 the Government decided to freeze all tariffs at their 1999 levels until at least 2005. The Ministry expected that this would lead to a gradual decrease in the number of tariff concession applications lodged. This decrease has occurred and appears to be continuing.

Quality

Processes complied with the standards contained in current Ministerial delegations and the policies contained in the Tariff Concessions Guidance Manual with no decisions reversed on appeal.

Timeliness

93% (90%) of initial decisions to advertise or decline an application were made within five working days of receipt.

98% (90%) of final decisions on applications were made within 10 working days of the end of the advertising period.

Cost

(Figures are GST exclusive)

Revenue Other was derived from concession administration fees.

Major Budget Variances

The variance between the Supplementary Estimates and actual revenue reflects lower than expected concession application fees from importers for exemption from import duty.

Output Class - Administration of Trade Remedies

Description

This output class provides investigative services to establish whether New Zealand industries require remedies to prevent injury caused by dumped or subsidised imports or sudden import surges.

The investigative service is conducted under the Temporary Safeguard Authorities Act 1987 and the Dumping and Countervailing Duties Act 1988 in relation to dumped and subsidised goods.

Quantity, Quality, Timeliness and Cost

(Performance standards and forecast volumes are in brackets where applicable.)

Quantity

10 (10) product-by-country investigations, reviews and reassessments, resulting from applications from New Zealand industries, were conducted during the year

Quality

Investigations and reporting are to be recognised by the parties involved as consistent with the requirements of either the Temporary Safeguard Authorities Act 1987 or the Dumping and Countervailing Duties Act 1988; provide no grounds for review under judicial review proceedings (no successful court challenges); and provide no grounds for World Trade Organisation dispute settlement proceedings (no successful dispute settlement action against New Zealand).

No court proceedings were initiated.

Timeliness

All (all) interested parties were advised of essential facts and conclusions on which a final determination was based, no later than 150 days from initiation.

All (all) final determinations were made no later than 180 days from initiation of an investigation.

Cost

(Figures are GST exclusive)

Sources of Revenue Other

Major Budget Variances

The Supplementary Estimates change reflected a transfer to Vote Consumer Affairs to meet cost pressures.

The variance between 2003/2004 and 2002/2003 for expenses reflects the transfer of the trade remedies policy function to Policy Advice Business and Competition to align output class activities better.

Output Class - Registration and Granting of Intellectual Property Rights

Description

This output class provides services relating to the administration of legislation providing for the protection of intellectual property rights in New Zealand by granting patents under the Patents Act 1953; registering trade marks under the Trade Marks Acts 1953 and 2002; registering designs under the Designs Act 1953; granting plant variety rights under the Plant Variety Rights Act 1987; providing registers of information relating to intellectual property; conducting hearings; and acting as a Receiving Office for the World Intellectual Property Organisation.

Quantity, Quality, Timeliness and Cost

(Performance standards and forecast volumes are in brackets where applicable.)

Quantity

Numbers of new applications:

• 6,334 (6,630) patents;
• 25,687 (21,000) trade marks;
• 1,336 (930) designs; and
• 143 (160) plant variety rights.

Numbers of renewals:

• 9,283 (8,600) patents;
• 9,430 (9,310) trade marks; and
• 634 (600) designs.

All volumes are demand driven. Increased demand for both trade marks and design protection from clients (both domestic and foreign) is consistent with overseas trends.

Quality

All decisions to grant/register intellectual property rights were published in the Patent Office Journal monthly and were available for public scrutiny.

Timeliness

98% (98%) of applicants received confirmation of the filing date⁶ of their application within one business day of receipt.

92% (96%) of applicants were notified of the decision to grant or refuse plant variety rights within four months of completion of testing. (This standard was not met due to a slight backlog built up in the first part of the year while efforts were being made to identify and build up additional capability for the Plant Variety Rights Office.)

Cost

(Figures are GST exclusive)

Sources of Revenue Other

Major Budget Variances

The Supplementary Estimates change reflected the marginal cost increases associated with processing an increase in volumes of trade mark applications ($400,000).

The variance between the Supplementary Estimates and actual Revenue Other has been due largely to trade mark application volumes being 22% higher than expected (25,687 actual applications versus 21,000 forecast applications). This trend is consistent with that being observed overseas.

The variance between the Supplementary Estimates and actual expenses reflects under-expenditure on personnel due to timing differences between resignations and vacancies being filled, partly offset by the increased resource requirements associated with the trade mark application volumes exceeding forecast.

The variance between 2003/2004 and 2002/2003 actual expenses mainly reflects under-expenditure in personnel costs due to timing differences between resignations and vacancies being filled.

Output Class - Administration of Insolvencies

Description

This output class provides services relating to the administration of bankruptcies and liquidations by the Official Assignee pursuant to the Insolvency Act 1967 and the Companies Act 1993; the management or disposal of property restrained or forfeited under the Proceeds of Crime Act 1991; and provides enforcement functions under the Insolvency Act 1967.

Quantity, Quality, Timeliness and Cost

(Performance standards and forecast volumes are in brackets where applicable.)

Quantity

Numbers administered:

• 2,790 (2,700) bankruptcies;
• 167 (200) liquidations;
• 33 (15) proceeds of crime orders.

Although the Official Assignee has secured more liquidation appointments than in 2002/2003 the number of liquidations administered is lower than forecast due to lower liquidation volumes in general.

The increase in proceeds of crime orders is indicative of greater recourse to this legislation by the police.

Quality

In 99% (90%) of instances, a progress report to creditors on the financial position and likelihood of a dividend, was provided within 25 clear business days of adjudication or date of liquidation.

All progress reports to creditors were reviewed and signed off against the New Zealand Insolvency and Trustee Service Best Practice Standard prior to dispatch.

Timeliness

Bankruptcies

The percentages of bankruptcy files closed were:

• 90% (80%) or more of bankruptcy files were closed within one year;
• 96% (90%) or more of bankruptcy files were closed within two years; and
• 99% (95%) or more of bankruptcy files were closed within three years.

Targets were exceeded due to implementation of improved case management strategies and the majority of bankruptcies administered being consumer-related as opposed to commercial estates.

Liquidations

The percentages of liquidation files closed were:

• 65% (60%) or more of liquidation files were closed within one year;
• 89% (85%) or more of liquidation files were closed within two years; and
• 96% (95%) or more of liquidation files were closed within three years.

Targets were exceeded due to implementation of improved case management strategies.

Cost

(Figures are GST exclusive)

Sources of Revenue Other

Major Budget Variances

The variance between the Supplementary Estimates and actual Revenue Other reflects the Official Assignee managing fewer than expected company liquidations and less money in bankrupt estates resulting in lower than forecast commissions being received in 2003/2004. The lower than forecast commission income arises from the increasing number of insolvent estates under the Official Assignee's management with insufficient assets or recoveries from which to recover a commission.

The variance between 2003/2004 and 2002/2003 actual Revenue Other reflects an increase in the actual numbers of liquidations managed in 2003/2004 (167 liquidations) over 2002/2003 (117 liquidations).

Output Class - Registration and Provision of Statutory Information

Description

This output class provides services relating to the registration and provision of a range of documents and information required to be filed on a public record by corporate entities, insurance and superannuation funds, issuers of securities and holders of securities over personal property interests and the provision of information services related to the same. It also provides a prosecution and enforcement function under the Companies Act 1993, Securities Act 1978 and Corporations (Investigation and Management Act) 1989.

Quantity, Quality, Timeliness and Cost

(Performance standards and forecast volumes are in brackets where applicable.)

Quantity

Companies Office

Numbers of material documents filed:

• 63,002 (53,550) company incorporations of which 98% (95%) were electronic;
• 82,432 (77,250) name approvals of which 98% (96%) were electronic;
• 1,176 (1,000) prospectuses;
• 297,942 (282,000) annual returns of which 88% (75%) were electronic; and
• 465,509 (535,600) personal property security interest registrations.

More buoyant economic conditions than anticipated have led to increased levels of activity on the companies register.

Personal property security interest registrations were 13% lower than the projected volume. This is a new register and volume trends have yet to establish a meaningful pattern.

Electronic searches conducted:

• 409,806 (569,000) electronic company searches; and
• 1,503,223 (1,030,000) Personal Property Securities Register (PPSR) electronic searches.

The reduction in the number of paid company searches was due to an increase in the information now provided free of charge.

A significant (43%) increase in PPSR electronic searches reflects the ease of access and increasing awareness of the register.

Other services:

• 23,862 (29,000) company dissolutions were actioned.

Higher levels of business activity and strong economic conditions have meant fewer companies have ceased operation.

Insurance and Superannuation Unit

• 697 (730) Trustee Annual Reports were filed; and
• 16 (11) new scheme registrations were actioned.

A larger number of new one-person schemes was registered than anticipated.

Quality

Companies Office

100% (99%) of documents entered into the database were free of material errors, as defined in the Companies Office Standards,⁷ for both electronic and manual information.

100% (99%) of images entered into the database were to the required standard to ensure clarity, accuracy and completeness of the data captured.

Timeliness

100% (99%) of material documents⁸ were processed within one clear business day of receipt for paper documents and within 45 minutes of receipt for documents filed electronically.

Cost

(Figures are GST exclusive)

Sources of Revenue Other

Major Budget Variances

The Supplementary Estimates change reflected proposed fee changes ($6.126 million) and the establishment of the motor vehicle traders register ($1.067 million), partly offset by delays in the introduction of the Retirement Villages Act (-$0.128 million).

The variance between the Supplementary Estimates and actual Revenue Other reflects the impact of a 10-year fee setting strategy uploaded to baseline for the 2003/2004 year which has resulted in a fees review implemented on 1 July 2004. Volumes have continued to exceed forecast and this is reflected in the variance.

The variance between the 2003/2004 and 2002/2003 for Revenue Other is mainly due to the introduction of the Motor Vehicle Sales Act 2003 in December 2003 resulting in $1.067 million of fees from motor vehicle trader registrations, and New Zealand's healthy economic climate leading to an increase in business activity in 2003/2004 which was reflected in growth in the number of company incorporations and in PPSR activity.

⁵Please also refer to Vote Economic, Industry and Regional Development Output Class - Policy Advice - Economic, Industry and Regional Development.

⁶The application is assigned a filing date once the application and all information required by the relevant legislation has been provided, and the prescribed fees have been paid in full.

⁷Companies Office Standards dated 12 February 2003.

⁸Material documents are all company registration documents except for client modified Annual Returns.