The Year's Key Achievements
The Ministry's strategy for growth, spelled out in our successive Statements of Intent, endeavours to ensure that the business environment promotes a higher rate of sustainable income growth for New Zealanders. We pursue this goal across a wide range of activities.
To prioritise our effort we are focusing on five key strategic areas agreed with Ministers to be critical for growth. This overview describes key initiatives we have taken during the year in pursuit of these strategic priorities.
Also noted are significant steps we have taken to invest in the Ministry's organisational development. The aim of this strategy is to ensure we have the capability to achieve the Ministry's vision, strategic priorities and business environment outcomes.
This overview highlights activity which has helped to deliver on our broad strategy. I also want to acknowledge all the other activities our staff perform. I'd like to thank all staff and managers whose professionalism and commitment throughout the year is reflected in this report.
Leadership
Leading a whole-of-government approach to economic development
The Ministry of Economic Development has an important leadership role across the public sector to ensure that economic development remains a key area of focus. Our aim is to work with other agencies to increase the combined effectiveness of the public sector in improving New Zealand's economic growth rate.
Two particular achievements over the past year illustrate the Ministry's role.
Establishment of the Government Economic and Urban Development Office in Auckland
This initiative built on our establishment of the position of Director, Auckland Business and Government Relations in 2004. Data from a survey of our Auckland stakeholders, combined with feedback from our Auckland Director, showed that Auckland stakeholders were seeking better dialogue on policy issues, an improved central government understanding of Auckland perspectives and better coordination across government.
In response, and mindful of the importance of Auckland as the driver of the New Zealand economy, the Ministry decided to establish a policy office in Auckland. We took the lead and approached several other economic development-related departments to suggest co-locating with us in Auckland. The Ministry for the Environment, the Department of Labour and the Ministry of Transport agreed that this met their business objectives and have joined with us in establishing a joint Auckland office.
The Government Economic and Urban Development Office opened in July 2005. The four agencies are working to ensure that Auckland business and local government views are heard and taken into account in sustainable economic and urban development policy.
Growth and Innovation Framework
The Ministry of Economic Development leads development and implementation of the Government's Growth and Innovation Framework (GIF). This framework and its associated processes is a key tool for integrating economic development activity across departments and agencies. Initiatives undertaken during the year included:
- joint publication with the Treasury of Growth through Innovation: Economic Development Indicators 2005. This joint report shows the latest data on New Zealand's economic performance compared to other OECD countries;
- continued implementation of the recommendations of the GIF Taskforces on Biotechnology and ICT. A comprehensive update on progress with implementing the taskforces' recommendations was published in July 2005;
- publication of the report Growth through Innovation, summarising progress made in implementing the Growth and Innovation Framework since 2000;
- the culmination of a number of GIF projects initiated in earlier years, including the launch of the Digital Strategy;
- continued oversight of the GIF working groups and budget process. The skills and talent focus of the 2005 Budget saw funding for additional modern apprenticeships, literacy and numeracy in the workplace, and industry training; and
- establishment of a new Food and Beverage Sector Taskforce to identify growth opportunities for the sector. The 20-member taskforce comprises industry leaders plus the Ministers of Economic Development and Agriculture.
International Linkages
Improving the international linkages that allow firms to benefit from trade, knowledge transfer and investment
For a small, geographically isolated economy like New Zealand, how well we integrate with our closest neighbouring country and with the rest of the world has a significant effect on our growth and productivity rate.
International linkages provide a solid foundation for sustainable economic growth. They give our domestic firms greater access to skilled labour, technologies, ideas and markets, thereby encouraging them to be more productive, innovative and internationally competitive. They also enable us to attract foreign investment and to identify and make successful investments offshore. International linkages also provide us the leverage to shape and influence international practice to our advantage.
The quality of our regulations directly affects the ability of businesses to integrate with the rest of the world. Nearly all domestic regulation today therefore has an international dimension. In some areas, such as business law, our reform programme reflects convergence around new international norms and practices. In other areas, where possible, we are seeking to influence the international agenda.
Trans-Tasman Coordination
Australia is our closest international economic relationship, as reflected in our trade, investment, institutional integration and people flows. A priority over the year was to deepen trans-Tasman regulatory cooperation and joint economic development initiatives to advance a single economic market, as endorsed by the Prime Ministers of both countries.
Business Law Coordination Programme
Business law coordination with Australia, within the framework of the Memorandum of Understanding on Business Law Coordination, has deepened in the areas of competition, intellectual property, accounting standards and securities markets regulation.
The Australian and New Zealand governments directed the Australian Productivity Commission to conduct a study on trans-Tasman coordination of competition and consumer policy enforcement and adjudication. The Commission reported on the study in December 2004. Both governments have accepted the Commission's recommendations and are working on the implementation of improved information sharing, cross-appointments between competition agencies, coordinated processes for scrutiny of trans-Tasman transactions by regulators, and regular formal meetings between policy officials.
The Ministry is exploring further options for intellectual property coordination in the areas of patents, trade marks and plant variety rights.
New Zealand intends to adopt and implement international financial reporting standards (IFRS) by 2007. The Trans Tasman Accounting Standards Advisory Group was formed in January 2004, and has facilitated the completion of cross-appointments between the Chairs of the Australian and New Zealand accounting standard-setting and oversight bodies.
Institutional Design
An interdepartmental working group led by the Ministry has begun work to develop a general framework to guide decision-making in terms of options for coordination, with a particular focus on trans-Tasman institutions.
The Ministry was also part of an interdepartmental officials' working group on trans-Tasman banking and insurance regulation. The working group submitted its final report to Ministers in January 2005. Treasury, supported by the Ministry, is currently undertaking further analysis on ways in which coordination of prudential regulation with Australia can be advanced.
TTMRA and Broader Regulatory Coordination
Since its enactment in 1997, the Trans-Tasman Mutual Recognition Arrangement (TTMRA) has helped the workforce move more freely between the two countries and has removed many of the costs and difficulties involved in the trans-Tasman trade in goods and services. A cross-jurisdictional review of the TTMRA (which comprised New Zealand, Australian federal government and Australian states) was completed at the end of 2004. The review recommendations were endorsed by the Council of Australian Governments' Committee on Regulatory Review and were agreed by the New Zealand Cabinet in June 2005. Implementing the recommendations will be ongoing throughout 2005/2006.
In September, a protocol was signed between the Ministry's Regulatory Impact Analysis Unit (RIAU) and its Australian counterpart, the Office of Regulation Review (ORR), part of the Productivity Commission. The ORR and the RIAU administer the respective regulatory impact analysis requirements in each country, and provide training and guidance to departments on good regulatory design. The protocol relates to a new trans-Tasman consultation mechanism for the preparation of Regulatory Impact Statements (RISs) decided by the Council of Australian Governments in June 2004. Under the revised requirements, the RIAU (in consultation with the relevant domestic regulator) is able to comment on draft RISs prepared for community consultation to ensure that trans-Tasman impacts are fully considered. A key objective of the protocol is to enhance consultation and coordination between Australian and New Zealand regulators in ensuring that trans-Tasman issues are considered early in policy development. The protocol details the working arrangements between the ORR and RIAU, and further strengthens an already close relationship between both bodies administering similar RIS regimes in New Zealand and Australia.
At a meeting in December 2004, Australia and New Zealand CER Ministers agreed to reform the rules of origin under the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA). Substantial progress has been made on the reform based on a new Change in Tariff Classification approach. Only one significant issue remains to be resolved. The reform, when implemented, will enhance both Australian and New Zealand businesses' competitive position in each others' market and lower compliance costs.
Cooperation on Economic Development Issues
Breaking down the impediments to doing business, making investments and sharing ideas is one part of the task in creating a more integrated economic market with Australia. We have been exploring whether there are opportunities to allow New Zealand business to gain more from our special relationship with Australia. These opportunities may arise because of the comparative advantage that New Zealand and Australia (and jurisdictions within it) have developed as a result of the free trade environment that ANZCERTA and TTMRA have created. The challenge is to develop a coherent cooperation agenda that allows us to take advantage of these opportunities.
The Ministry's appointment of an economic counsellor to Canberra has been a significant step in giving greater visibility to industry development cooperation with Australia. This has given a clear signal of our willingness to work with Australians on industry and innovation policy issues, particularly the underlying policy research. This has built on previous initiatives such as the Australia-New Zealand Biotechnology Alliance, the Australia New Zealand Biotechnology Partnership Fund and ongoing trans-Tasman science and technology talks. Our aim for the coming year is to establish further collaborative policy projects undertaken with Australian counterparts. This will provide the platform for further developing this relationship.
A key success has been to obtain support from the CER Ministers to develop a programme for collaboration on industry policy. The focus this year has been to develop the necessary relationships and institutional linkages with our Australian counterparts, although there is more work to be done in developing our relationship with the Australian and New Zealand business community. New Zealand has now been recognised as a full member of the Commonwealth, State and Territory Advisory Council on Innovation which has given us and the Ministry of Research, Science and Technology (MoRST) the opportunity to further explore areas for collaboration on policy research.
Free Trade Agreements
The year saw a marked expansion in New Zealand's bilateral free trade negotiation programme. The Ministry has responsibility for providing policy and negotiating advice in the areas of trade rules, technical barriers to trade, competition, intellectual property and government procurement; and also plays a central role in the market access tariff negotiations.
Two free trade agreements/closer economic partnerships were concluded in the year: the New Zealand Free Trade and Closer Economic Partnership (CEP) Agreement with Thailand in December 2004, and the Trans-Pacific Strategic Economic Partnership Agreement with Singapore, Chile and Brunei Darussalam in May 2005.
The Ministry accorded high priority to the negotiation of a free trade agreement with China. Ministry officials participated in a full round of domestic consultations with businesses and contributed to a joint feasibility study. Trade negotiations commenced in December 2004 and three rounds have taken place since. In addition, the Ministry has developed a parallel work programme with the China General Administration for Quality Supervision, Inspection and Quarantine, under a bilateral Memorandum of Understanding, to advance a programme of cooperation on technical regulations, commencing initially with work in the area of electrical equipment. This work will support the trade negotiating effort but also build a long-term relationship with a key Chinese regulatory authority.
During the year, research was also undertaken and position papers prepared to support the negotiation of the Australia-ASEAN-New Zealand Free Trade Agreement (AANZFTA) and a New Zealand-Malaysia Free Trade Agreement. Three negotiating rounds for the AANZFTA and the Malaysian FTA took place.
Other Sectoral Agreements
The Ministry is responsible for advising on, and administering, basic tariff levels and issues relevant to the effectiveness of those rates. In accordance with the decisions under the Post 2005 Tariff Review, alternative specific tariffs, which largely applied to clothing, were removed on 1 July 2005. Tariffs for these items have reverted to the ad valorem rate. Further unilateral reduction in normal tariffs will commence on 1 July 2006 in accordance with outcomes of the review. The majority of tariffs will be at 5% by July 2009, with clothing, footwear and carpets at 10% by that date.
The Ministry implemented the required tariff and trade remedy provisions to give effect to the New Zealand-Thailand Free Trade and Closer Economic Partnership Agreement from 1 July 2005. The Ministry conducted a review of the Generalised System of Preferences regime with a view to graduating less developed countries from the scheme.
The Ministry administers New Zealand's trade remedies regime under the Dumping and Countervailing Duties Act 1988 and the Temporary Safeguard Authorities Act 1987. "Trade remedies" is the general term to describe measures to protect domestic manufacturers from specific cases of injurious imports arising from dumping and subsidisation, or sudden increases in the volume of imports.
The Ministry participated in the Rules Negotiating Group of the World Trade Organisation, which is tasked with clarifying and improving the Anti-dumping and Subsidies and Countervailing Measures Agreements, as part of the Doha Mandate. In 2004/2005, our trade remedies team concluded two dumping investigations relating to oil filters from China, Indonesia, Korea and Thailand; and oral liquid paracetamol from the Republic of Ireland. The team also initiated a reassessment of anti-dumping duties imposed on galvanised wire from Malaysia.
Innovation
Fostering entrepreneurship and innovation in New Zealand firms
An improved rate of growth relies on the performance of businesses and individual entrepreneurs. Business success requires entrepreneurs continually to seek out opportunities, and to develop, produce and market innovative products that consumers want. This strategic priority focuses on improving the conditions that spur innovation.
Initiatives undertaken during the year included:
Business Capability Development
The Ministry worked with other agencies to streamline support programmes and client management across New Zealand Trade and Enterprise (NZTE) and the Foundation for Research, Science and Technology (FRST). It also facilitated preparation of the Project Collaboration strategic plan for building business capability in New Zealand. Project Collaboration is a public-private sector partnership aimed at improving the supply and demand for high-quality business improvement services. The Ministry also developed a programme to be delivered by NZTE for small business to appoint advisory boards in order to lift company performance.
Private Sector Research and Development and Patenting
The Ministry worked with other agencies to enhance government assistance for business research and development, including increased funding for FRST business grant schemes. We also conducted research highlighting the role country-specific factors such as size and distance play in the levels of research and development and patenting in New Zealand.
The Ministry also initiated a pilot of the Danish Technology Institute's Technology Partnership Programme. This scheme enables New Zealand businesses to access a network of international research institutions to provide specialist services on technology issues.
Business Linkages and Networks
The Ministry commissioned a study into collaboration and linkages between Small and Medium Enterprises (SMEs) that highlighted the important role for government in supporting collaboration through infrastructure development and creating a skilled labour force.
Sector Development
The Food and Beverage Taskforce was established in December 2004, made up of 16 private sector and academic representatives, the chief executives of MAF and NZTE, and the Ministers of Economic Development and Agriculture. The taskforce is the vehicle for the Government's engagement with the food and beverage sector, in line with the sector engagement policy agreed in May 2004. MAF and NZTE are joint lead agencies for the engagement. The Ministry of Economic Development has an oversight role as part of the Officials Oversight Committee. The taskforce has established working groups looking at skill requirements, market opportunities and innovation.
National Innovation System
The Ministry is undertaking a major project to establish a shared framework and evidence base about New Zealand's innovation system. This includes examining private and public sector research and development and their contribution to innovation. The review will develop a body of knowledge and working conclusions that will be brought together in a way that enables improvements to be made to the innovation system. While the Ministry of Economic Development is the lead agency for this project it will work closely with MoRST, Treasury and other stakeholders.
Evaluation
During the year the Ministry completed evaluations of the Industry Capability Network (ICN), Business Incubators Programme and Polytechnic Regional Development Fund (PRDF). The ICN and Incubators reviews concluded that it was too early to evaluate final outcomes, but raised significant issues for future focus. The PRDF review found increased industry collaboration, but more modest impact on the provision of training relevant to local needs. (This activity has now transferred to Vote: Tertiary Education.) The Ministry reported to the Minister on a stock-take of overall programme performance. In consultation with stakeholders, we have established a substantial expansion in evaluation activity, including seven evaluations of NZTE programmes to be completed by December.
Government Procurement
The Ministry is responsible for developing and advising on government procurement policy. The New Zealand procurement model supports globally-open and competitive public sector procurement markets. The Ministry commenced a review of government procurement implementation in 2005. This will consider the barriers to small business participation in government procurement and will revise certain sections of the procurement policy in order to introduce some mandatory provisions for departments resulting from the recently concluded Trans-Pacific Strategic Economic Partnership Agreement.
The second part of the government procurement review is entitled Realising the Potential for Innovation. Demand conditions can play a role in stimulating innovation and this is particularly true for government purchasing due to its large size and influence in many markets. The implementation of government procurement policy is also reviewed to ensure that New Zealand businesses in the procurement market are exposed to stronger international competition, as this remains one of the best ways to encourage innovation.
Standard Setting
We are also reviewing the role of standards development in innovation and of the health of standards and conformance infrastructure.
Capital Investment
The Ministry has deepened its understanding of issues relating to business investment in New Zealand (such as the role of tax policy and incentives), reflecting the importance of business investment to boosting productivity. We have also initiated a Seed Co-investment Fund programme designed to assist development of the market for early stage investment capital for New Zealand businesses through co-investing with pre-qualified investment partners.
Regulatory Environment
Strengthening the growth focus in the regulatory environment for business
One of the most important ways government influences the business environment is through the regulation of business activity. Such regulation sets standards for goods and services, provides incentives for innovation, encourages competition in markets, and provides assurance to consumers and investors.
The Ministry continues to focus on promoting improvements in the quality of regulations that shape the business environment, to minimise the compliance burden and provide as much certainty and flexibility as possible. We have also placed emphasis on ensuring that regulations designed to achieve non-economic outcomes do not unnecessarily detract from achieving the Government's economic objective.
The Ministry identified three initiatives to which it gave particular prominence in 2004/2005:
Establishing a Consolidated Approach to Financial Market Regulations
The Ministry commenced a review of non-bank financial products and providers, the objective of which is to develop an effective and consistent regulatory framework that promotes confidence and participation in financial markets, and delivers a sound and efficient financial sector. The Ministry also contributed to a Treasury-led analysis of the domestic institutional arrangements required to support the financial sector regulatory outcomes.
The Ministry progressed the Securities Legislation Bill through to Second Reading stage, completed drafting the Insolvency Law Reform Bill and released further discussion documents on a review of the Financial Reporting Act 1993.
Understanding and Acting on Business Concerns about Regulation
Business views on the impact of regulation are a crucial source for identifying areas of regulation and features of design and implementation that have an unnecessarily adverse impact on innovation and economic growth. The Ministry has scoped a process for the evaluation of the Dutch standard costing model as a tool to estimate and assess the cost of compliance of new regulation, and to review existing regulation.
The Ministry also responded in the following ways to ideas or initiatives business believes would minimise the cost and burden of understanding and adapting to regulatory changes:
- we produced a final report on the actions taken by the Government in response to the report for the Ministerial Panel on Compliance Costs. This showed that 90% of the recommendations agreed by the Government had been or were being implemented, and that the remaining agreed recommendations had been superseded by other actions;
- we launched the website www.businessconsultation.govt.nz which enables businesses and people with an interest in business to register to be consulted about the impact of proposed regulations as they are being developed;
- we continued to facilitate the work of the Small Business Advisory Group, which advises Ministers and officials on all matters affecting small business. The group met nine times during the year. It produced a report recommending 19 actions the Government could take to improve conditions for SMEs - the bulk of which related to the regulatory environment; and
- we gave the Ministry's Director of SMEs responsibility for monitoring, questioning and reporting on all business-related regulation proposed and developed by the Ministry. This was in response to recommendations in the Small Business Advisory Group's report. Further, the Ministers responsible for portfolios administered by the Ministry - Communications, Tourism, Consumer Affairs, Commerce, Small Business, Economic Development, Industry and Regional Development and Energy - have agreed that, wherever possible, business-related legislation and regulations prepared by the Ministry should come into effect on only two, pre-determined, days each year. There will be a minimum three-month period for consultation on regulations likely to affect business, and after regulations have been approved there will be a further three-month period before they come into effect. Both initiatives are designed to allow adequate time for SMEs to contribute to regulation-making and to learn about and adapt to new regulations.
Modernising the Limited Partnership Regime
Venture capital provides a valuable source of funding for new companies and early stage expansion capital. The Ministry continued working with the Inland Revenue Department and the Treasury on reforms to remove regulatory and tax barriers to venture capital and investment in New Zealand and to complete the design of the preferred legal structure for investing in venture capital - the limited partnership.
Infrastructure
Improving the quality and reliability of key infrastructure services
Sound infrastructure services, such as transport, energy, communications and water distribution, are essential to New Zealand's growth prospects and our general quality of life. Efficient and reliable infrastructure services reduce the costs of production, increase the attractiveness of New Zealand as a location for investment, and facilitate the flow of ideas, goods and services, and people. Infrastructure bottlenecks or shortages of critical services jeopardise the productivity, profitability and even viability of firms. Even a small risk of supply disruption adds substantially to the uncertainty that firms face, and can be an impediment to growth and sustainable development.
It is therefore important that firms and consumers have access to the infrastructure services they need, when they need them. In recent years, however, some significant issues have emerged. These include challenges to the short and long-term security of New Zealand's energy supply, increasing traffic congestion in and around Auckland, and the need to ensure that New Zealanders have access to and are able to use new telecommunications technologies. The Ministry has been working with other government agencies and the private sector to address these issues.
Key achievements during 2004/2005 included:
Improve the Functioning of the Electricity Sector
The Government's objectives for the electricity sector, including outcomes that the Government wants the Electricity Commission to give effect to, are set out in the Government Policy Statement (GPS) on Electricity Governance. The Ministry led development of this GPS, which was released in October 2004. The objectives include:
- managing security of supply and implementing the reserve energy mechanism;
- working with Transpower and grid users to facilitate priority investment in the grid where necessary;
- promoting efficient use of electricity; and
- improving hedge market transparency and liquidity, and demand-side participation.
Working with the Electricity Commission, the Ministry has developed its capacity to monitor the Commission's performance, and improve the performance of the industry as a whole.
Improve the Functioning of the Gas Sector
Effective Governance of the Gas Sector
The Ministry led development of the GPS on Gas Governance, released in October 2004. This sets out the Government's policy for gas industry objectives, governance and rules relating to the wholesaling, processing, transmission, distribution and retailing of gas.
The Ministry has also advised Government about establishing the Gas Industry Company, an industry body to govern the gas industry to meet the objectives set out in the GPS.
Security of Gas Supply
The Ministry's Crown Minerals Group has established an investment strategy to provide incentives for greater gas exploration activities. The strategy is being implemented progressively from 2005. Initiatives include:
- acquisition of seismic and other technical data critical to attracting competitive bids for exploration permits;
- improved IT systems to make data readily and freely available to explorers;
- more frequent competitive tenders for permits in frontier petroleum basins; and
- targeted marketing to bring larger international exploration companies to New Zealand.
Open Access to the Maui Pipeline
The Ministry has monitored the industry's progress on the development of open access arrangements for the Maui pipeline. Despite substantial progress being made, a number of significant issues remained unresolved as at the Government's 20 May 2005 deadline. Accordingly, the Ministry is now taking a more active role in guiding the development of a commercial industry solution.
Other Energy Work
Sustainable Energy Principles
The Ministry has led the whole-of-government process of developing a sustainable energy framework as a basis for informing future government and private sector decisions on energy matters. The Sustainable Energy: Creating a Sustainable Energy System for New Zealand discussion document was released in October 2004, and key stakeholders were engaged in a series of workshops in early 2005. The outcome of the engagement was reported to the Government in July 2005, and further work is being undertaken on a number of specific issues.
Improving Efficiency of RMA Processes
The Ministry has contributed to the review of the Resource Management Act (RMA), led by the Ministry for the Environment. The Ministry is now leading work on the development of National Policy Statements and National Environmental Standards for various types of network infrastructure under the RMA.
Information and Communications Technology Issues
Building New Zealand's Digital Economy
The Ministry led a whole-of-government process to develop the Digital Strategy, which was released in May 2005. This strategy sets out initiatives targeted at creating a digital future for all New Zealanders, using the power of ICT to enhance all aspects of our lives. The Ministry is now leading implementation of the strategy.
Working with the Ministry of Education, the Ministry has implemented the initial roll-out of broadband internet access to all New Zealand communities, under Project Probe. Working with MoRST, we provided policy advice to establish an Advanced Research Network, a very high-speed broadband service to universities and research institutes nationwide.
Radio Spectrum
The Ministry has reviewed radio spectrum policy to identify and prioritise policy issues for further action, with a focus on maximising the utilisation of the radio spectrum for communication and broadcasting.
Water and Sewerage Issues
Efficient Allocation of Water Resources
The Ministry has contributed to work on the Water Programme of Action - an interdepartmental work programme to ensure that New Zealand's freshwater resources are sustainably managed.
The Ministry has also contributed to work related to the Resource Management (Waitaki Catchment) Amendment legislation, to improve water allocation decisions in the Waitaki catchment.
Assisting with Local Water Infrastructure Needs
The Ministry of Tourism has designed, and (following Government decisions) is implementing, a subsidy scheme for water and sewerage provision in small communities with low ratepayer bases and high visitor numbers.
Transport Issues
Improving the Efficiency of Land Transport Networks
The Ministry contributed to the development of the Wellington Land Transport Package announced in January 2005, which will provide for $225 million of new Government investment for Wellington land transport.
The Ministry has also been contributing to the Auckland Road Pricing study led by the Ministry of Transport, which is expected to be completed by November 2005.
Organisational Development Strategy
The Ministry continues to strive to meet the goals and expectations set by government. Our organisational development strategy sets out medium-term initiatives designed to ensure we have the capability to achieve these goals. Over the past year we have continued to concentrate our efforts in four areas:
Strengthening Our Leadership Role
Build and Maintain a Higher External Profile
The Ministry continued to undertake a range of activities during 2004/2005 to improve stakeholders' understanding of, and contribution to, the sustainable economic development process and our role in that. The chief executive and senior members of the Ministry spoke at a range of external events, provided briefings for senior journalists and commentators and networked with a range
of key stakeholders.
Members of the Strategic Leadership Team undertook an Industry Insite programme where they spent time with businesses. The programme was designed to help senior managers gain a deeper appreciation of the issues faced by businesses in New Zealand. The programme complemented the ongoing relationship management work undertaken by managers and staff with business generally.
Auckland Presence
To deliver on our commitment to strengthen the relationship between the Ministry and Auckland, in July we opened the Auckland-based Government Economic and Urban Development Office.
Australian Presence
The Ministry has continue to leverage off the senior position it established in Canberra. The incumbent has worked over the past 12 months to develop effective networks and to identify key points of engagement for the Ministry at state and federal level in Australia.
Building an Integrated Organisation
Planning and Strategy
Embedding the work already commenced to develop and implement effective strategy and planning systems continued to be a focus for 2004/2005. The emphasis this year was on improving and refining our strategic priorities. This was undertaken through a range of contributing activity. One key undertaking was establishment of four strategic priority advisory groups comprising key business, academic and other stakeholders, to assist in the consideration of our strategy. Through our internal planning processes, we identified the "vital few" projects which would, in the next 12 months, advance our strategic intent. This process helped to ensure that appropriate resources are allocated to these key projects.
In addition to deepening and reinforcing our focus on the strategic priorities, the Ministry also spent time developing systems that ensured the review of progress against plans. A quarterly operating review programme was initiated by the chief executive with the strategic leadership team to monitor our performance and identify opportunities for learning and resource reallocation.
Knowledge Sharing
Work was undertaken by a cross-Ministry group to identify and encourage opportunities for improved knowledge sharing across the Ministry. This group identified both system and broader culture initiatives to help ensure that skills and information held across the organisation are effectively identified and utilised. In terms of improving key knowledge management systems, work was undertaken to review and strengthen our web-based presence, ministerial reporting systems, research register and record management practices. All of these core systems will help to improve the flow of information through the Ministry.
Developing Our Skills and Expertise
Leadership Development
During the year, the Ministry continued its leadership development programme, which is designed to improve our managerial competence and deepen our ability to lead and influence others. Building off managers' attendance at the residential leadership programme, the Ministry undertook follow-up development activities including a coaching programme for the Senior Leadership Team, provision of team-based sessions for managers to role model and share the leadership principles, and refresher modules for managers in some of the key components of the leadership model.
Specialist Development
Recognising the critical coaching and mentoring role that senior advisory staff play in the policy development process, the Ministry introduced in 2004/2005 a training programme designed to develop and support these skills. The Ministry also reviewed and enhanced its policy development training for new staff. More structured support and advice was made available to the Ministry's managers to help them identify and support the learning and development needs of their staff.
Recruitment and Retention
Using a mix of outsourced and in-house expertise, the Ministry continues to focus on the active recruitment of skilled staff with critical skills both domestically and internationally. With a tightening labour market we are continuing to identify opportunities for both the efficient and effective attraction and retention of key staff. Secondments to external agencies, movements to different roles within the Ministry and cross-Ministry project teams were all activities used by managers during 2004/2005 to assist staff with development and ensure the effective utilisation of people skills within the Ministry.
Improving Our Performance
Core Support Structures
Work continued on building robust and streamlined technology systems to support the work of the Ministry. Driving this work is a three-year IT road map designed to ensure best practice technology solutions are implemented. Much of the work programme undertaken during the year focused on researching, developing strategies and investigating various proofs of concept for the potential configuration of the systems.
Much of this programme of work is designed to rationalise and standardise a range of IT activity to manage costs, and maximise reliability and business functionality across the Ministry. A number of projects focused on enhancing our external facing systems were commenced. These systems are designed to improve business processes and ensure a good engagement for clients. In addition to this future proofing work, a major review of the Ministry's security practices was undertaken, and key findings from that review implemented.
Accommodation
The Ministry began work last year to implement an open plan work environment, and this work continued in our Wellington Bowen Street building during 2004/2005. Four floors were refitted during the year.
Geoff Dangerfield
Chief Executive
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