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65. A consultation exercise was undertaken in March 2003 to gauge stakeholder views on the proposed approach to integration. Representatives from MED, MFAT, Trade NZ and Industry NZ met with a range of groups to discuss the proposed service range, including: Business New Zealand, Chambers of Commerce, Export New Zealand, EDANZ, Employers and Manufacturers Associations, Council of Trade Unions, Local Government New Zealand, FOMA, Ngai Tahu, Pacific Business Trust, and a range of industry groups (a full list is attached in Appendix 2).

66. Feedback on the proposed service design was positive. Some key issues have been canvassed in other sections of this paper. Other common messages include:

• Groups have been very supportive of the merger. There is an overwhelming view that linking internationalisation with capability development makes clear sense. There is clear support for the objective and functions of the organisation as already agreed by Cabinet.
• Services and the structure of NZTE need to be relevant and flexible to local conditions - one size does not fit all and should not be centrally dictated. Concern has been expressed by some stakeholders as to the risk of crowding out the role of other providers such as Economic Development Agencies (EDAs) or industry associations, through regional services and offices or sector strategy work. There were a number of comments that some of the sector strategy or regional work of Industry New Zealand has not really embodied a partnership approach. There was the suggestion that NZTE engage in discussions with key regional economic development groups before establishing a regional structure and making final decisions on resource allocation.
• There is clear support and understanding of the role of NZTE in providing foundation and enabling services. In particular, the sector strategy processes have been regarded as generally successful, although a number of groups emphasised that this should not be limited to the GIF sectors. There is also strong support for the market development aspect of the growth services. There was more uncertainty about the value and nature of the higher level grants and a caution against NZTE providing business management "consultancy" services in the business growth area. When questioned, a number of groups supported bringing more contestability into the market development services (e.g. option of using a grant or purchasing an internal service) but not if the level of charging currently utilised by Trade NZ increased.
• Communication with the broader business community needs to be improved, particularly on:
  • the precise nature of services offered - information on schemes and basic advisory information needs to be more intelligible for businesses
  • transparency in relation to grants (criteria, allocation and benefits derived)
  • NZTE being broad based and not just dealing with a few chosen sectors
  • clarifying the policy role of MED/MFAT versus the delivery role of NZTE.

  These messages will be focused on as part of the communication strategy for the launch of NZTE in July and in shaping the ongoing communications for the organisation.

• Not surprisingly, there is broad support for reducing compliance costs and bureaucracy and improving flexibility in the application of grants schemes (in addition to improving transparency). There was some support that the foundation level grants (Enterprise Development Grants scheme) be devolved to regional groups, as they are for a Technology NZ grant scheme. This will be considered during the detailed design phase of the grants scheme.