Chief Executive's Overview
Introduction
The 2000/2001 year has been one of change and consolidation. It was the first full year of operating under a widened role in relation to economic development policy and specific industry and regional development policy initiatives.
A new branch - the Industry and Regional Development Branch - has been established to lead the Ministry's work on many of these issues, and over the past year has focussed on establishing Industry NZ as the primary delivery vehicle for the Government's programmes in this area. This Crown entity was built from scratch, and came into being in October 2000. Programmes were developed and introduced prior to that date, through an establishment unit in the Ministry. I wish to recognise the tremendous effort and enthusiasm shown by all those who worked to establish the new entity.
I especially acknowledge the key role played by Paul Carpinter, who led the Ministry during this phase and over the previous four-and-a-half years. I took over as Chief Executive from Paul in May 2001.
At the same time as facing new challenges, the Ministry has maintained a high standard in all its more established functions - as this report and this overview demonstrate.
Economic Development
The Ministry has a key role in meeting the Government's objectives for sustainable economic, regional and industry development. The aim is to lift the economic wellbeing of all New Zealanders, while maintaining or enhancing our physical and social environment.
The Ministry conducted a research programme to inform its policy advice on economic development issues. Research has been completed on relevant New Zealand and international trends, and on the interface between innovation and entrepreneurship. An evaluation strategy for government economic development initiatives and programmes was established. A pilot analysis of Industry NZ programmes against expected impacts was also completed.
Ongoing policy advice was provided on regional development. Initiatives have included creating a regional development framework and developing a programme to assist regions with acute needs. The Ministry has facilitated regional partnerships and assisted with regional economic development strategies.
The Ministry has worked closely with regional groups and other agencies to develop and manage specific regional development policies and strategies. For example, we supported the Tairawhiti Development Taskforce, which was a partnership between central government and the Wairoa and Gisborne District Councils. The Taskforce worked extensively to address major barriers to development in the region and to support development projects. It initiated an integrated regional transport study and a project to improve community access to the Internet.
The Ministry has worked closely with regional partners on projects ranging from regional telecommunications studies, providing computers in schools, integrated transport planning and soil and climate studies.
The Office of Tourism and Sport played a significant role in the development of the New Zealand Tourism Strategy 2010. The strategy recommended a whole-of-government approach to tourism policy led by a Ministry of Tourism. Cabinet has agreed that the Office of Tourism and Sport will be developed into a Ministry of Tourism by January 2002.
Supportive Regulatory Environment for Business
The Ministry has worked to create an environment that encourages and provides certainty for business innovation, development and growth.
The year was notable for its extensive business law reform programme, which saw the passage of a large number of Bills.
New Zealand's ability to demonstrate a robust regulatory environment is essential to its continuing capacity to attract domestic and international capital. This has been reflected in the priority given to the Ministry's work on the Takeovers Code and the Commerce Amendment Bill, which will strengthen competitive disciplines on firms by discouraging anti-competitive practices.
The Ministry's substantial investment in reducing business compliance costs strongly reflected the Government's desire to create a supportive business environment.
Establishment of a Ministerial appointed Business Compliance Cost Panel to assess the impact of compliance costs on small-to-medium enterprises was a central feature of the Government's business compliance cost reduction programme.
The Ministry has established a Business Compliance Costs Unit, responsible for co-ordinating the interdepartmental work associated with the Government's response to the Business Compliance Cost Panel's report. The Government's final response is due in December 2001. The Unit will also review all Regulatory Impact Statements which contain Business Compliance Costs Statements, prior to policy proposals being submitted to Cabinet.
The Ministry commenced a comprehensive review of New Zealand's intellectual property law, including trade marks (an Amendment Bill was introduced), patents and aspects of copyright. This review is central to the development of intellectual property in a transforming economy, and addresses issues such as new technologies and New Zealand's international obligations. This work also included the development of measures to address some concerns raised by Māori over the treatment of intellectual property rights affecting Māori cultural property.
The Ministry has made considerable progress in developing a system for domestic emissions trading, including holding a number of dialogue sessions with key sectors around obligations under an emissions trading regime. This scheme is likely to be a central means by which New Zealand will meet its obligations under the Kyoto Protocol, if this proceeds. The Government has recently announced its intention to ratify the Kyoto Protocol. Work on emissions trading will feed into the further consideration of the domestic climate change policy response.
The Ministry has participated in the officials' process concerning the Local Government Amendment Bill and funding powers reviews. Our particular interest is to ensure the reformed local government legislation enables an environment that positively encourages business innovation, development and growth.
The Ministry is leading implementation of the Government's E-Commerce Strategy, for the benefit of individuals, businesses, state sector agencies and the national economy. The Ministry provided policy support for the Electronic Transactions Bill, which aims to facilitate the use of electronic technology to meet a range of statutory requirements.
The regulatory environment for New Zealand business is increasingly an international one. Many of the regulatory regimes the Ministry is responsible for have a large and growing international dimension. This is reflected in the Ministry's extensive involvement during the year in international trade and economic policy development and negotiations. These included a wide-ranging role in the development of the Singapore New Zealand Free Trade Agreement.
The importance of Australia for our regulatory framework was recognised in the conclusion of a new Memorandum of Understanding on Co-ordination of Business Law.
Facilitating New Business Opportunities and Partnerships
The Ministry's work on industry and regional development has produced tangible results. We brokered the disposal of surplus Defence Force land and undertook extensive consultation with the Mayoral Taskforce on Hobsonville. This provided Sovereign Yachts, a high-tech export company, with a suitable site for super-yacht construction. The expected results are creation of around 350 jobs over two years and export earnings of around $600 million.
The Ministry has also worked with key sector groups to maximise their economic potential. A national Wood Processing Strategy is being developed, with groups working on issues such as transport, skills and labour. Strategies are also being developed for the biotechnology and creative industries, and initial contacts have been made with industry and unions on potential strategies in manufacturing and textiles, clothing and footwear.
The Ministry, with assistance from Te Puni Kōkiri and the Department of Work and Income, has brokered and supported regional development partnerships involving councils, iwi/Māori and business in Tairawhiti, Eastern Bay of Plenty and Northland. These regional partnerships use a wide consultative process to prepare regional development strategies that will guide the future sustainable economic development of their regions, and the Ministry is supporting the strategy preparation process with technical advice and central government co-ordination.
The Ministry also provided grants to support several discrete regional development projects during the year, including research on aquaculture opportunities in Opotiki, work to improve access to the Kaipara Harbour, research on soil and climate issues for under-utilised land in Northland, work on possible corporate structures for community irrigation schemes in the South Island and a contribution towards the costs of installing personal computers in schools in Tairawhiti.
Informed Consumers and Safe Products
The Ministry of Consumer Affairs contributed to positive developments for consumers and business by engaging in reviews and recommending changes to the legislative frameworks governing fair trading, consumer guarantees, consumer credit transactions, motor vehicle sales (with the Ministry of Economic Development) and product safety for household cots and babywalkers. Considerable progress was also made in developing and contributing to initiatives to build consumer confidence in e-commerce. The Ministry also undertook extensive industry and public consultation during the review of the system for measuring pre-packaged goods; and workplace, public and product safety in the supply, installation and use of electricity and gas.
The Ministry continued to develop relationships with community agencies and organisations, such as Budget Advisory Services, Citizens Advice Bureaux and the Māori Women's Welfare League. The Ministry also worked closely with industry organisations and groupings involved in manufacturing, importing, retailing and the service sector, as well as specialist interests in energy safety and trade measurement. These relationships are critical to delivering effective information and education services on consumer law, consumer rights and responsibilities, and effective safety and measurement frameworks for consumers and the public.
The Ministry initiated and led a review of the regulations governing petrol and diesel quality. The purpose of the review was to ensure New Zealand consumers have access to petrol and diesel that comply with accepted and up-to-date quality, safety and environmental standards. It is the first comprehensive review since the regulations were issued in 1988.
Efficient Services to the Business Community
During the year the New Zealand Insolvency and Trustee Service rolled out a new trust account and case management IT system. The case management system introduces a nationally accessible database and case management process, which will ensure all cases are managed using the same best practices, delivering a high and consistent level of service to clients.
The Companies Office continued to expand the range of information and services available via the Internet. A document imaging programme now allows for key documents to be viewed as an image on the Internet. Liquidators and receivership document filing also became available on-line this year.
The Intellectual Property Office increased the information available for viewing over the Internet. It also established a toll-free number to promote intellectual property awareness and assist clients in registering their intellectual property.
Work commenced on software development for the electronic Personal Property Securities Register, which will come on-line on 1 May 2002. This will be a fully electronic register for all financial security interests, except land. It will incorporate the Motor Vehicle Securities Register, the Company Charges Register, the Industrial and Provident Societies Charges Register and the Chattels Securities Register (currently administered by the Department of Courts).
Allocation of Crown Resources
The Ministry successfully completed an auction of 2GHz radio spectrum frequencies on behalf of the Crown in February 2001. This auction was the largest and most complex the Ministry has managed.
A 3G block was set aside from the auction for purchase by a Māori spectrum trust to promote Māori participation in the telecommunications and information technology sectors. This is now available for transfer to the trust.
The Ministry assisted with presentation of the Crown's case on the petroleum claim before the Waitangi Tribunal.
The settlement of the Maui royalty dispute resulted in additional payments by the Maui joint venturers of approximately $70 million over the life of the field. The dispute arose because the Maui mining licence in 1973 set a royalty rate of five percent of the value of gas and condensate at the well head but did not specify how that value was to be calculated. The Government and Maui joint venturers have now agreed to a set of rules for calculating well-head value.
The Ministry convened an international conference on minerals exploration in New Zealand in September 2000.
A record number of 22 petroleum exploration wells were drilled in the year 2000. This reflects the success of a long-term marketing strategy for fostering investment in New Zealand's petroleum resources.
Network and Infrastructure Policy
The Ministry advised on the recommendations of the Ministerial Inquiry into Telecommunications and developed draft legislation to implement the Government's decisions. The Telecommunications Bill was being considered by the Commerce Select Committee at year's end.
The Ministry led development of policy advice on electricity reform following the Ministerial Inquiry report of June 2000. The Electricity Industry Bill sets the regulatory frameworks for self-governance by industry and consumers, and for price control of lines businesses.
The Government has introduced regulatory arrangements for the electricity market, featuring self-governance by industry and consumers, backed up by comprehensive regulatory powers and the introduction of price control of lines businesses by the Commerce Commission.
A comprehensive review of the regulatory environment governing natural gas was initiated to ensure that gas is delivered in an efficient, fair, reliable and sustainable manner to existing and potential users.
Other Services
Responsibility for the Government Superannuation Fund (GSF) passed to the Ministry of Economic Development in 1998, when the GSF Department was abolished. The Ministry has worked closely with Treasury to establish a new investment policy and a suitable governance structure for the long-term management of the GSF.
A new Crown entity will be established in the coming year to take over responsibility for the GSF. It will be responsible for implementing a new investment policy which is expected to increase the long-term return on the GSF's assets, and reduce the contribution required from the Government to meet GSF retirement benefits.
The Ministry assisted the Minister of Sport, Fitness and Leisure to implement the recommendations of the Graham Taskforce on Sport, Fitness and Leisure by helping to establish a new national agency to co-ordinate recreation and sport. This is ongoing into 2001/2002. A new board has been appointed and legislation drafted. Change management services were provided for the affected agencies.
Management and Capability Issues
Strengthening the organisation's capability and effectiveness is a key priority for the Ministry's Strategic Leadership Team. The pace of change in the commercial and international environments means we need first-class policy and operational staff who are flexible and wide ranging. There are constant requirements to respond to specific output needs and pressures. We are also working to build the Ministry's skills and knowledge base. That will enable us to enhance our capability to provide outputs desired by the Government in the longer term.
Maximising Performance
The Ministry has revised its human resources strategy to develop its longer term capability. This involves a three-year plan to develop intellectual leadership, communication and influencing skills, and to develop an internal culture based on communication, flexibility and involvement of staff and managers.
During the year the Ministry launched a nation-wide graduate recruitment programme, resulting in the appointment of a number of high quality graduates who will join the Ministry in February 2002.
The Ministry is working to enhance its policy advice capability, with initiatives including regular secondments with other departments, updating the existing policy environment course and providing training on Treaty perspectives for policy groups.
The Ministry has implemented a standardised selection process for managers, a core training programme on key management information, and targeted training on communications, negotiation skills, Treaty and Tikanga awareness, performance management and project management.
The Ministry introduced a comprehensive feedback process to assess and develop managers' communications skills. Some 45 managers each received detailed feedback from internal and external sources on their communication skills and then received assistance to develop individual plans to strengthen these skills.
Statement of Resources as at 30 June 2001
| | 2000/2001
Actual | 1999/2000
Actual |
|---|
| Chief Executive Office | 2 | 3 |
| Industry and Regional Development Branch | 29 | 13 |
| Regulatory and Competition Policy Branch | 60 | 57 |
| Operations Branch | 431 | 484 |
| Resources and Networks Branch | 42 | 47 |
| Ministry of Consumer Affairs | 61 | 64 |
| Corporate Branch | 97 | 101 |
| Office of Tourism and Sport | 12 | - |
| Energy Efficiency and Conservation Authority | - | 29 |
| | 734 | 798 |
Male/Female Staff Numbers
| | 2000/2001 | Female | Male |
|---|
| Ministry Staff (expressed as full time equivalents) | 734 | 370 | 364 |
Staff Remuneration
Managing Relationships
The Ministry is fostering strong, resilient relationships with outside agencies in the public, private and local government sectors, and in the regions. Given its central role in implementing key government policies, the Ministry is more regularly in the public, political and media spotlight. It also needs to interact professionally with a wide range of sector, regional and business groups. The Corporate Communications function has therefore been expanded and refocused on high level relationship and issues management.
External and internal communications strategies were developed during the year in response to the Ministry's expanded role. Enhancements to the Ministry's Intranet to improve its value as a business tool, and to provide a one-stop-shop for staff information needs, were underway at year's end.
Providing Equal Employment Opportunities
The Ministry has progressed its EEO objectives to 2010 throughout the year, with efforts to improve the quality of the EEO recruitment data showing positive results. During the year Treaty of Waitangi and tikanga training was delivered to almost all policy staff and managers.
The Ministry conducted a scholarships programme for targeted groups of students during the year. Eight Māori students and one Pacific Island student received scholarships for the completion of their tertiary studies, each valued at $5,000 per annum. The scholarships are designed for students who are close to completing their study, have performed well academically, have close links with their communities, and who plan to work in areas which contribute to the Ministry's goals.
Ethnic Group Composition as a Percentage of All Ministry of Economic Development Permanent Staff
Employing Resources Effectively
The number of Votes administered by the Ministry and the diversity of its outputs places a premium on effective financial management systems.
To enhance these systems, during the year the Ministry upgraded its costing models and chart of accounts. The new chart of accounts is based around an organisational structure and Vote/Output Class/Output structure, where each is independent of the other. They can be reported on separately or collectively, providing better financial management information.
The Ministry's integrated planning process has resulted in a better alignment of business planning, and operational and capital budgeting within the Ministry, with closer co-ordination between the timing of budget development and planning decisions. This has reduced duplication when reporting ex-ante and ex-post.
The Ministry continues to review its accommodation requirements as business needs change. The Ministry's head office lease expires in 2004. A project team comprising senior management and an external advisor has been established to investigate and implement a strategy (process and milestones) to achieve an optimum solution for head office accommodation for the medium to long term.
The Ministry holds a number of other leases. During the year seven new leases were entered into totalling 1,017 square metres. This increase was offset by five leases expiring totalling 2,348 square metres. These changes resulted in the Ministry's property portfolio reducing from 34,107 square metres to 32,776 square metres. Rental occupancy costs were reduced from $7.604 million to $7.161 million.
Managing Risk
Risk management procedures were strengthened during the year by tightening the linkage between identifying and managing risks and the Ministry's high level objectives; and by integrating risk management activity more completely into branch business planning and Ministry strategic planning.
Timetabling was advanced so that the Ministry's Risk Profile for 2001/2002 was in its final approval stages by 30 June 2001. A review of the Ministry's legal compliance arrangements was completed, confirming that systems were in place but that these could be simplified by electronic aids, while a review of business continuity and crisis management planning commenced.
E-Government
During 2000/2001 the Ministry developed websites for Industry NZ, the Ministerial Panel on Business Compliance Costs and the E-Commerce Action Team and Network.
Other E-Government achievements in 2000/2001 were led by the Companies Office and Intellectual Property Office and included:
- electronic back-capture of all key company documents to provide access to that material via the Companies Office website;
- launch of a new module covering reporting requirements for company receivers and liquidators, providing Internet-based filing process and electronic reminder process;
- enhancements to the account management structure to give citizens greater control over the way their organisation interacts with the Companies Office and Intellectual Property Office sites;
- introduction of an improved "look and feel" for websites to simplify customer usage of the Companies Office and Intellectual Property Office sites;
- addition of electronic versions of the Commissioner's decisions to the Intellectual Property Office site, providing citizens with free access to a resource they have previously had to obtain in paper either in person from the Intellectual Property Office at Lower Hutt or via a third party provider;
- launch of a static information site at www.ppsr.govt.nz to provide information to the public on the Personal Property Securities Register, a wholly electronic register commencing on 1 May 2002.
A more centralised information management and systems development and delivery structure has been implemented across the Ministry. This has laid the foundation for a more co-ordinated and strategic focus to managing information and knowledge. The new approach has reduced duplication of effort, resources, equipment and systems within the Ministry and has led to greater consistency of approach across the organisation.
Conclusion
The 2000/2001 year was a landmark for the Ministry. We established a new branch and managed the establishment of a new Crown entity. We continued to deliver excellent service to Ministers, consumers and other third parties across a very wide range of policy and operational outputs.
I thank the Ministry's management and staff for their efforts over the year, and for the welcome they have given me as incoming Chief Executive.
Geoff Dangerfield
Chief Executive
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