Section 2: The Ministry's Strategy for Growth

Ministry of Economic Development Strategic Priorities

Achieving a permanent shift in New Zealand's sustainable rate of growth depends on getting many aspects of economic strategy right - a supportive business environment, labour market and educational outcomes, effective research and development policy, and so on.

The Ministry leads development and implementation of the Growth and Innovation Framework across the public sector. Through our leadership we aim to achieve "joined-up government" and greater alignment and consistency between government policy and services across areas related to economic development.

Being well connected with the rest of the world is key to New Zealand's growth prospects. Trading internationally not only gives firms access to larger markets, it also leads to productivity improvements as businesses discover and embrace new technologies, markets and production methods to compete with foreign firms. This is particularly important for New Zealand, because the domestic market is small and a long way from major global markets.

The Ministry will work on policies to ensure New Zealand firms are well placed to take advantage of international opportunities. In particular, we will emphasise a deeper economic relationship with China across a broad front of business and regulatory activity. We will focus on creating a Single Economic Market with Australia, and on aligning Australia and New Zealand's economic development policies to strengthen the trans-Tasman economy as a whole. We will work with other agencies to co-ordinate New Zealand's regulatory environment more closely with those of our major trading partners, and to promote stronger business networks.

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. The performance of New Zealand businesses is variable, and relatively few evolve into world-class firms.

This strategic priority focuses on improving the conditions that spur innovation - such as increasing the linkages between the private sector and the public science system, and ICT capability within firms. It focuses on the suite of facilitative policies that seek to improve the ability of firms to identify opportunities and translate them into commercial success.

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 will 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 will also work to ensure that regulations designed to achieve non-economic outcomes do not unnecessarily detract from achieving the Government's economic objective.

Effective infrastructure - such as energy, transport, communications and water distribution - is crucial to New Zealand's productive capacity and growth prospects. Key areas of infrastructure have lacked investment in the past. Shortages in supply or volatility in prices have major economic and social effects - which can be exacerbated by our challenging geography and widely dispersed population.

The Ministry will focus on improving the functioning of the New Zealand energy system and enhancing our connectivity through an effective telecommunications environment. We will work to create an environment that encourages and enables private sector investment in infrastructure, and to ensure that public infrastructure investments are timely and well targeted.