2. Drivers of Commerce's Business
The Government's Strategic Directions
The Government's strategic directions are set out in seven Overarching Goals, which are broad and not time-bound, and in eight Strategic Priorities (1999-2000), which are focused on the next three years. They were announced by the Prime Minister in December 1998.
Commerce has a particular relationship with two of the seven Overarching Goals, and, most specifically, with five of the eight Strategic Priorities. These Strategic Priorities drive Commerce's Key Results.
Overarching Goals Relevant to the Ministry
"We want a strongly growing internationally competitive enterprise economy; an economy which generates trade, employment, income and social opportunities in which all New Zealanders can participate. To do this we must run sound fiscal and economic policies, we must have open competitive markets, we must foster a passion for enterprise, hard work, skill and creativity."
"We value innovation and our ability to build on new ideas and technologies. Our future prosperity depends on our ability to adapt and we must be prepared to create and take advantage of new opportunities. As Government, we are committed to lifting educational standards and achievement. We want to encourage New Zealanders to gain and use the new skills and knowledge needed to enable us to participate in the global economy."
Strategic Priorities 1999-2002 Relevant to the Ministry
"Our strategic priorities centre on lifting the productive capacity of our country to become a high value economy. We want to focus on ways to develop smart people with a sense of opportunity, smart products and services, new and expanding markets. In particular we will:
- Lift educational standards and achievement.
- Expand our knowledge base and technological capability.
- Strengthen our external links by liberalising trade, investment and immigration.
- Improve the quality of our regulatory environment.
- Encourage the contestable supply of resources and services in areas of public sector responsibilities.
The Government's Interests as Owner
The Government also has a strong ownership interest in the Ministry. Commerce's core capabilities, as found in its staff, its organisation and systems, and its management of assets and risk, all contain intrinsic value for the Government.
The Government's interest as owner is to see the organisation's value enhanced by maintaining its close alignment with the Strategic Priorities; by ensuring integrity in all of its activities through its commitment to its own and the public service's values and codes; and by developing its potential and future capabilities.
The Government's interest as owner is enduring, requiring the Ministry to consistently improve its intrinsic value over time.
The Public Sector Environment
Government policy is characterised by a strong emphasis on fiscal discipline, sustaining budget surpluses, reducing national debt and lowering taxation. This environment places funding constraints on government departments. Commerce therefore faces a future where resources will always be scarce and where the pressure for efficiency and effectiveness is constant.
The public sector also faces increasing demand from Parliament and the public for greater accountability. This requires Commerce to define clearly the services it undertakes, as set out in the annual purchase agreements with Ministers. It requires transparent and best practice governance arrangements, and better means of measuring achievement. Maintaining high ethical standards is crucial.
The Business Environment
The New Zealand business environment is a key driver for Commerce. In important ways this environment is determined by international trends. Business remains under strong pressure to increase international competitiveness. These pressures are felt through a wide variety of consumer and market mechanisms, including changing consumer demands, new market opportunities, technological change and international trade liberalisation.
The business environment is also significantly determined by Government policy, which is designed to develop open and competitive markets within New Zealand. As a part of this, the Government is encouraging businesses to strengthen their capacity to adapt, and is supporting this by its five-point programme (which includes lifting the knowledge base of industry and improving access to investment capital), and by its continuing efforts to reduce the costs to business of complying with laws and regulations.
Government initiatives also include policies that are economy wide or impact on a number of sectors (e.g. tariff reform or facilitating foreign investment) and policies relating to specific sectors (e.g. electricity reform). New Zealand's international trade policies continue to pursue open and competitive markets regionally and globally through entities such as CER, APEC and WTO.
A business sector operating under increasing international and domestic competition will require Commerce to have a clear focus on:
- improving the operation of specific markets (microeconomic reform)
- enhancing business and consumer law
- improving the quality of regulatory interventions
- reducing the cost to business of complying with regulation
- eliminating unnecessary regulations, and
- improving Commerce's own service delivery to business.
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