The Year's Key Achievements
Economic transformation is a key priority for the Government. This is fundamentally about changing the country's product mix towards one that provides higher value and higher returns – products that differentiate on the basis of quality and innovation rather than price.
This Ministry leads the public sector-wide effort to develop and implement the Government's economic transformation policy programme. We also deliver specific key items of work within that programme.
Without clear direction and joint public and private sector effort, significant economic change is likely to proceed slowly.
The Ministry has adopted five strategic priorities to shape its contribution to the Government's economic transformation agenda. Agreed with Ministers, these priority areas are critical for economic growth. This overview outlines our key work on the strategic priorities in the 2006/07 financial year:
- Leadership
- International linkages
- Innovation
- Regulatory environment
- Infrastructure
The Ministry's work on economic transformation is linked to a focus on sustainability. In 2006/07, we assumed leadership of three key elements of the Government's sustainability policy: sustainable procurement, eco-verification and business partnerships.
To deliver to our stakeholders, the Ministry must be a strong, integrated organisation, and this report describes some key initiatives around the Ministry's Organisational Development Strategy.
Finally, I would like to thank all staff for their commitment in making the achievements outlined in this report possible.
Geoff Dangerfield
September 2007
Leadership
Leading a whole-of-government approach to economic development
The Ministry of Economic Development is responsible for leading and coordinating the Government's economic transformation policy programme across the public sector.
Improved economic performance means getting a number of things right – effective labour market policies, good research and development systems and a primary sector focus, to name just a few aspects key to New Zealand's economic development. Our policy programme needs to be well focused and well coordinated to achieve the step change the government seeks.
The Ministry's responsibility is to take the lead on advice on economic development strategy, but implementation within the public sector relies on government agencies working together.
At the same time, the Ministry recognises that it is ultimately the private sector that drives economic growth. So, as well as ensuring that public agencies are joined up in their approach to economic development issues, the Ministry also has a leadership role in creating and maintaining a dialogue with key private sector influencers. And as a major provider of services to business, the Ministry is committed to maintaining the ease of doing business in New Zealand.
Economic Transformation
The Ministry has lead responsibility for three aspects of the Government's economic transformation agenda: Growing globally competitive firms, World-class infrastructure, and An internationally competitive city – Auckland.
This has involved an ongoing process of initiating, synthesising and reporting on key initiatives and executing agreed policies. In August 2006, Cabinet approved priority economic transformation goals and action agendas, and economic transformation was a major theme for Budget 2007.
Sustainability
The sustainability dimension of the economic transformation programme has been given more emphasis during 2007. Economic development must be sustainable in every sense, and the Ministry is integrating sustainability issues more broadly within the economic transformation agenda. The Ministry is leading three key elements of the Government's environmental sustainability policy: devising a sustainable procurement policy, creating a scheme for eco-verification of the authenticity of suitable products and services, and developing partnerships with business on approaches to sustainable development.
Auckland
The Ministry has taken a lead role in bringing together key Auckland businesses and local authorities to discuss development priorities for the region to strengthen Auckland's contribution to national economic performance. This has included establishing a cross-government action agenda for developing Auckland as an internationally competitive city.
The Government Urban and Economic Development Office (GUEDO) in Auckland has built stronger links between central government agencies, and between these agencies and Auckland local government and business, and has helped Auckland stakeholders develop a Metro project and plan. The Metro plan was launched in October 2006 and is aimed at providing an action plan for the Auckland Regional Economic Development Strategy.
GUEDO also worked with local government on strengthening governance in Auckland, leading to local government's proposal to central government in December 2006.
Working with the Private Sector
The Ministry has continued to work with and support the Growth and Innovation Advisory Board. Since early 2007, the Board has taken a high-level strategic role on the overall shape, direction and priorities of the economic transformation agenda and has been a key conduit between government and the wider business sector on economic development issues.
In particular, the Board's engagement with the private sector has contributed to the thinking around the development of Auckland as a world-class city, sustainable business developments, innovative and productive workplaces, broadband and Export Year 2007.
Building a Cross-Sector Evidence Base
During the year, the Ministry worked with the Treasury and Statistics New Zealand on the production of the next Economic Indicators Report. These reports have been produced by the Ministry every two years since 2003, and this latest assessment of New Zealand's economic performance will be published in late 2007.
The Ministry also worked with the Ministry of Research, Science and Technology (MoRST) and the Treasury to improve linkages between the private sector and public science by improving public researcher mobility and leading work on public/private research partnerships. This included acting on relevant recommendations from the OECD review of New Zealand's innovation policy, jointly commissioned with MoRST.
International Linkages
Improving the international linkages that allow firms to benefit from trade, knowledge transfer and investment
As a small, geographically distant economy, New Zealand faces considerable challenges in developing and maintaining international linkages in the face of a rapidly changing regional and global environment.
Distance impacts on the ease of person-to-person contact and business relationships and on the transfer of tacit knowledge, such as subtle differences in consumer preferences. There is robust competition for skills and the right sort of international capital that supports globally competitive firms. Institutional, legal and regulatory differences, while not a function of distance, can create costs for firms and also influence their investment decisions. Finding a competitive and sustainable niche in large international markets requires building our firms' capabilities.
During the year, the Ministry advanced this strategic priority through policies and programmes that:
- help innovators to identify and take advantage of new opportunities and exploit their competitive advantage;
- boost productivity by enabling firms to seek out and access new markets, new technologies and knowledge, skilled labour, and best practice work and management techniques;
- increase incentives for firms to innovate by creating competitive pressure from offshore and providing much greater consumer choice; and
- assist New Zealand firms to overcome scale disadvantages in the domestic market, thereby enabling them to leverage much higher returns from innovation.
The Ministry was involved in a wide range of international issues but gave priority to three areas we believe have the greatest potential to produce growth:
- supporting the efforts of business to build networks and deepen relationships in other economies, and to identify and pursue profitable international business models.
- advancing work on deepening New Zealand's relationship with Australia by developing a single economic market with that country.
- building deeper economic relationships with a number of Asian countries, particularly China.
Supporting International Networks
Globally competitive firms
The Ministry leads the work on the economic transformation theme Growing globally competitive firms. This work has focused on three key issues:
a need for better linkages between firms and research organisations, and better focus and alignment of government innovation investment.
under-developed capital markets, consistently low private savings in financial instruments and low levels of private sector investment in research and development.
size and distance from market, as well as firms' limited skills and aspirations to internationalise, as inhibiting factors to firm growth.
Export Year
The Ministry had substantial input into the government's Export Year 2007 initiative, working with the Ministry of Foreign Affairs and New Zealand Trade and Enterprise (NZTE) to advise on key activities and participate in their implementation. The Ministry also contributed to identifying complementary measures, which were approved by Cabinet, including additional funding for the Market Development Assistance Scheme, the extension of NZTE's footprint into Asia, a US export contract bonding facility and the Thinking Globally resource kit for schools.
Tourism
The Ministry of Tourism has, in partnership with industry, progressed the mid-term update of the New Zealand Tourism Strategy. The strategy responds to the changes in the global and local tourism marketplace over the past five years and has a particular focus on lifting the sector's performance by increasing expenditure per visitor and improving product quality.
The strategy builds on the 100% Pure brand, positioning the sector at the forefront of a competitive and sustainable New Zealand. It particularly focuses on matching the brand promise with delivery (by the sector and New Zealand as a whole) to ensure that global concerns about sustainability are addressed. The final strategy will be launched in November 2007.
Developing a Single Economic Market with Australia
Australia is our most important economic partner and the largest market for New Zealand goods and services. New Zealand already enjoys uniquely close social, institutional and business linkages with Australia, and this work programme is designed to further strengthen them. Some key aspects of this work include the following.
Cooperation on economic development issues
In both 2006 and 2007, the CER Business Dialogue held in parallel with the annual CER Ministerial meeting focused on the food and beverage sector. Discussion centred on the benefits of a more collaborative approach to positioning the Australasian food and beverage sector in the global trading environment. At the 2007 meeting, there was an added emphasis on sustainability, possible collaboration in responses to "food miles" issues and the implications for the global food system of diverting grain production to meet increasing demand for biofuels.
The Ministry completed an evaluation of the Australia/New Zealand Biotechnology Partnership Fund (ANZBPF) in 2007. As a result, the Government has confirmed its commitment to the fund's ongoing operation.
Along with the Ministry of Research, Science and Technology, the Ministry participated in the Commonwealth States and Territory Advisory Council on Innovation (CSTACI), which has become a valuable forum for dialogue on common innovation policy issues. CSTACI met in New Zealand for the first time in November 2006.
New Zealand and Australia also worked together on the development of a common framework for government policies on sustainable procurement. The Australia and New Zealand Government Framework for Sustainable Procurement was in the final stages of development by the end of the 2006/07 year.
Business law coordination programme
The revised Australian/New Zealand Memorandum of Understanding (MOU) on Business Law Coordination was signed in 2006. The MOU includes new priority areas for trans-Tasman business law coordination and acknowledges several important developments in the trans-Tasman environment, such as the objective of a trans-Tasman single economic market. Progress under the MOU includes:
- The Trans-Tasman Accounting and Auditing Standards Advisory Group is continuing to analyse differential reporting and auditor regulation regimes and work towards the mutual recognition of auditors. In addition, financial reporting standards-setters in both countries have agreed to adopt an integrated approach to strategic planning, participating in international standards-setting and preparing and approving standards.
- Changes have been made to reduce the need for companies operating in both jurisdictions to duplicate documents and filing requirements. The New Zealand Companies Office and the Australian Securities and Investments Commission are working on information technology arrangements to facilitate the sharing of information.
- The Australia-New Zealand Mutual Recognition Treaty relating to securities offerings was signed by Ministers in February 2006. Regulations to complete the details of the regime in both countries are expected to be finalised later in 2007.
- Policy decisions were made in June 2007 on a new regulatory framework for financial advisors in New Zealand. The proposed framework will provide a firm basis for trans-Tasman mutual recognition of financial advisors.
- Good progress continues to be made on improving information sharing between competition and consumer law enforcement agencies. Australia has passed legislation containing information sharing proposals. New Zealand officials continue to develop information sharing proposals with a view to introducing legislation in late 2007.
- The Ministry continued to participate in Australian-led projects aimed at developing fully harmonised approaches across Australia to product safety and trade measurement policy. As a result, in April 2007, the Coalition of Australian Governments announced its determination to put in place a single national policy for trade measurement in Australia. Having a single law governing trade measurement and a single regulator (the National Measurement Institute) will facilitate moves towards greater trans-Tasman harmonisation in this area.
TTMRA and broader regulatory coordination
The Trans-Tasman Mutual Recognition Arrangement (TTMRA), which came into effect in 1998, has significantly removed regulatory barriers to trade in goods and the movement of registered people. Key recommendations arising from the first review of the arrangement, including a renewed information and education campaign and the establishment of the Cross-Jurisdictional Review Forum on a permanent basis, were implemented during the 2006/07 year.
Deepening the Economic Relationship with Asia
The Ministry put particular focus on deepening New Zealand's economic relationship with China. New Zealand firms are keen to seize opportunities arising from access to China's large and rapidly expanding markets. Primary products, education and tourism are key areas for New Zealand.
The Ministry provided policy and technical advice, as well as negotiating expertise, for the Free Trade Agreement negotiations with China. The Ministry also continued to build its relationship with the Chinese Administration for Quality Supervision, Inspection and Quarantine, with a view to concluding a Mutual Recognition Arrangement on electrical safety and electro-magnetic compatibility.
In tourism, a review of New Zealand's Approved Destination Status visa system for leisure tours from China has led to the scheme being strengthened through a redesign of the system and a shift in administration of the scheme to Tourism New Zealand. Industry support for the changes, greater agency cooperation and closer links with the Chinese national tourism authority have been achieved through a consultative process led by the Ministry of Tourism.
The Ministry of Tourism provided policy advice on new tourism marketing investment by the Government in China. An additional $7 million over two years will enable a Tourism New Zealand consumer campaign in Shanghai to position New Zealand as a high value destination in this key source market, which is now accessible by direct flights to Auckland.
To further develop relations with other Asian countries, the Ministry (under processes led by the Ministry of Foreign Affairs and Trade) provided policy and technical advice, and negotiating expertise, on the ASEAN-Australia/New Zealand and the Gulf Cooperation Council States Free Trade Agreements. In addition, the Ministry contributed a member to the Japan/New Zealand officials' working group, which is developing proposals to enhance the economic relationship between the two countries.
The Ministry also supported NZTE's implementation of the strategy resulting from that organisation's global services review, which focuses on enhancing its work in China, India and Japan.
Innovation
Fostering entrepreneurship and innovation in New Zealand firms
It is often difficult for New Zealand firms to compete successfully on the basis of scale of operation, or to sustain a position as the least-cost producer. If our businesses are to succeed against their international competitors, they must continually find new opportunities and new ways of producing goods and services.
Innovation involves a combination of:
- creating and marketing new or improved products and services that consumers both here and abroad value highly; and
- creating and adapting to new forms of organisation and new technologies.
Entrepreneurs are at the heart of this process, spotting new opportunities and motivating those around them to devote resources to innovation.
Initiatives taken during the year to help New Zealand become increasingly innovative and entrepreneurial include the following.
Improving the Innovation System
The Ministry developed a better understanding of the New Zealand innovation system as a result of internal work and an OECD review of New Zealand's innovation system, which was commissioned jointly by the Ministry and the Ministry of Research, Science and Technology (MoRST) and published in August 2007. This work provided an improved evidence base to support the overall development of innovation policy and has enabled the Ministry to contribute more effectively to the development of advice on a wider range of innovation system issues.
A particular focus of work in the past year has been the Ministry's contribution to the development of a research and development tax credit aimed at increasing private sector research and development. This credit was announced as part of the Government's business tax reforms in Budget 2007.
The Ministry has also worked with MoRST to explore opportunities for improved performance in our institutional arrangements for the public science system, including linkages with the private sector. We also commenced work with Auckland Plus and other regional stakeholders to better understand opportunities and impediments in the Auckland innovation system.
We are improving our understanding of what matters most for lifting firm productivity, for example, by analysing results from the annual Business Operations Survey and research on firm performance using data from a new Statistics New Zealand longitudinal firm performance database.
Effective, Competitive Markets
The Ministy led the work that resulted in the Government changing the mandate of the New Zealand Venture Investment Fund (NZVIF).
Previously, the fund had concentrated on providing funding for young New Zealand firms at their very early stages, by focusing on seed, start-up and early expansion investment. That work will continue, but the investment mandate was extended to include expansion and late expansion stages of firm growth.
The Ministry continued to develop its understanding of the issues and options for improving capital investment and also completed evaluations or baseline reviews of the Strategic Investment Fund, Investment NZ, the Visiting Investor Programme and the Seed Co-Investment Fund. These evaluations provided the basis for new policy and improved targeting of programme funds.
The Skill Development System
As part of the Government's broader workplace productivity agenda, the Ministry has facilitated a Business Capability Partnership Programme. This is a collaborative partnership between business and government focusing on raising business, management and leadership capability. Specific initiatives undertaken so far include the development of business benchmarking tools and a management focus initiative.
Improving Business Assistance Programmes and Business Linkages
In November 2006, the Ministry completed a review of the business assistance programmes delivered by NZTE, the Ministry and NZVIF. This review pulled together the key lessons from evaluations of these programmes. This and other work undertaken by the Ministry over the course of the year has highlighted the need for sharper prioritisation and focus of business assistance initiatives aimed at improving firm productivity and their capacity to innovate. This will result in enhancements to programmes over the next year.
The Ministry has also led or contributed to a range of sectoral strategies in areas of significance to the New Zealand economy. This included advising the Government on its programme for partnering with industry to grow high-value food and beverage exports, which was launched in July 2007. The Ministry also supported an industry-led strategy for aquaculture development.
Other work aimed at improving the innovative capacity of the New Zealand economy included advice to the Government on new regional-level mechanisms to support the development of globally competitive firms. Initiatives for Auckland regional economic development were identified in an action plan launched in October 2006.
Regulatory Environment
Strengthening the growth focus in the regulatory environment for business
Decisions regarding whether, when and how to regulate play a critical role in shaping the business environment. This strategic priority aims to ensure that these decisions are based on sound analysis and that, where regulation occurs, it is designed and implemented in a way that fosters economic activity as well as other policy objectives.
The most notable initiatives for 2006/07 were as follows.
KiwiSaver
The Ministry made a major contribution to the implementation of KiwiSaver by developing legislation and regulations to enact the scheme; leading the tender process for default providers; taking responsibility for the implementation of the scheme relating to the Government Actuary; and involvement in the scheme's implementation and evaluation project. The KiwiSaver Act was passed in October 2006. The default provider tender process was completed in December 2006, and the evaluation strategy for KiwiSaver was agreed by Cabinet in December 2006.
Quality Regulation Review
This review, aimed at ensuring the regulatory environment for business supports the Government's economic transformation efforts, was completed in July 2007, with Cabinet decisions expected later in 2007. Three main areas of activity have resulted:
Better regulation through enhanced regulatory process disciplines
This includes:
- implementing a strengthened regulatory impact assessment regime from April 2007, to ensure that government decisions regarding regulation are based on a sound analysis of net benefits;
- developing a business cost calculator (to be implemented by March 2008) to facilitate a standard approach to assessing the costs businesses incur in complying with regulation;
- providing guidance for policy analysts on how various models of regulatory flexibility can be incorporated into regulatory design; and
- creating guidelines on regulatory compliance, to help ensure that effective compliance is a key consideration when designing and implementing regulations.
Better regulation through improving the stock of regulation
This includes:
- analysis of the issues submitted through the Government's Business Consultation website;
- sector studies looking at the regulatory and compliance issues facing the retail, hospitality, wine and horticulture industries;
- working with other agencies to address potential gaps, overlaps and inconsistencies in approach at the interface between:
- the Health and Safety in Employment Act, the Injury Prevention, Rehabilitation, and Compensation Act and the Hazardous Substances and New Organisms Act;
- the business and resource consents processes; and
- the contractual and legislative requirements placed on suppliers of health-related services; and
- proposals for a rolling programme of annual sector studies, to ensure an on-going focus on the stock of regulation. The relatively minor fixes identified from the Quality of Regulation Review will be dealt with through a "fast track" Bill, while the more complex issues will be the subject of new targeted interagency projects.
Better regulation through reducing the cost of information provision and access
One of the key issues raised during the review was business frustration with the need to supply the same information in different forms to different government agencies. We are now working with the Accident Compensation Corporation, Inland Revenue and Statistics New Zealand to examine the potential for developing a standard business reporting model. The ultimate aim would be that businesses only have to provide information once, and this information is then used to fulfil numerous government reporting requirements.
Standards and Conformance Infrastructure Review
The last stage of the Standards and Conformance Infrastructure Review was completed during the year. The review aimed to identify the strengths and weaknesses in New Zealand's existing standards and conformance infrastructure, its operational alignment with government policy, and its capacity to deliver outcomes that facilitate trade. The review concluded that the infrastructure is fundamentally sound, but also put forward a number of proposals for improvement to meet future challenges. Further proposals and report backs are scheduled at the end of 2007 and by May 2008.
Review of Financial Products and Providers
Decisions were made on a comprehensive review of the financial services sector, which focused on regulation of insurance markets, managed funds and superannuation schemes, issuers of securities and non-bank financial institutions, as well as consumer redress in the financial sector. The aim was to promote a sound and efficient financial sector in which:
- the public has confidence in the professionalism and integrity of advisers;
- targeted regulation encourages innovative and competitive markets while not imposing unnecessary costs; and
- New Zealand meets its international obligations to mitigate against money laundering and the financing of terrorism.
The main changes resulting include:
- regulation of financial advisers by a co-regulatory model involving approved professional bodies, with oversight by the Securities Commission;
- registration of all financial service providers on a publicly-searchable database;
- implementing comprehensive consumer dispute resolution and redress mechanisms;
- licensing trustees and retaining them as frontline supervisors while enhancing the approval and monitoring role of the Securities Commission; and
- making the Reserve Bank the single prudential regulator for banks, non-bank deposit takers and insurers.
Legislation to implement these changes is expected to be introduced later in 2007.
Decisions on insurance, collective investment schemes and debt issuers, regulation of platform and portfolio management services and an enhanced disclosure regime are expected to be made in 2008.
Insolvency and Limited Partnerships Law Reform
An extensive overhaul of New Zealand's insolvency law culminated in the passing of the Insolvency Act 2006, the Companies Amendment Act 2006 and the Insolvency (Cross-Border) Act 2006 in November 2006.
The Insolvency Act streamlines the personal bankruptcy process while the Companies Amendment Act adopts the Australian voluntary administration regime and makes some minor amendments to the corporate insolvency provisions in the Companies Act 1993. Regulations to give effect to these changes are currently being drafted.
Significant Ministry work with other agencies resulted in the introduction of the Limited Partnerships Bill, which sets up a new business structure known as limited partnerships, intended to make it easier for start-up firms to secure venture capital.
In addition, 2006/07 saw the Ministry leading an OECD project to evaluate the effectiveness of industry-led regulation in different market situations.
Infrastructure
Improving the quality and reliability of key infrastructure services
Sound infrastructure services, such as energy, communications, transport and water distribution, are essential to New Zealand's growth prospects and our 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.
Key work by the Ministry to address these issues over the last year included the following.
Energy
New Zealand Energy Strategy
The Ministry leads the development of the New Zealand Energy Strategy (NZES), which sets direction for the sector, explores the key energy challenges that New Zealand faces, and outlines actual and proposed actions to address the challenges. Analysis of the role of energy within a wider sustainability and economic transformation framework was undertaken in support of the development of the NZES.
The draft NZES was released in December 2006. After extensive stakeholder engagement and submissions, it is expected the final strategy will be released in the second half of 2007.
Security of supply
Ensuring New Zealand can meet its energy demands over the long term, at reasonable prices, is critical to the global competitiveness of New Zealand firms and New Zealanders' quality of life.
The Ministry continued to work with the Electricity Commission on electricity security of supply issues, to ensure that electricity supply arrangements are working well and that the market is delivering competitive outcomes, including sufficient investment to ensure security of supply.
Changes to the Government Policy Statement on electricity governance were led by the Ministry, as was work on a new section 26 policy statement under the Commerce Act 1986, which emphasised the importance of incentives in encouraging investment in infrastructure.
Working closely with the Gas Industry Company, the Ministry has continued to improve the functioning of the gas market in order to ensure a smooth transition to the post-Maui environment.
Climate change
Supporting the development and take up of low-emissions energy is an important element of the Government's response to climate change, and this is a core component of the NZES.
Development of the New Zealand Emission Unit Register has been led by the Ministry, and regulations for operating the register are now being developed. The Ministry has also contributed to wider government work programmes on climate change, including work on an emissions trading scheme.
Mitigating the effects of rising oil prices
The Ministry held a successful global tender for additional oil stocks to meet New Zealand's international obligation to hold 90 days of oil reserves.
Advice on biofuels policy was provided to the Government, and a draft Biofuel Bill was released for pre-consultation in June 2007.
The Crown's acquisition and provision of data to support petroleum block offers has encouraged exploration activities in the Northland, Outer Taranaki and East Coast Basins. As a result, new areas under exploration have quadrupled in size. More importantly, exploration work programmes have become more aggressive, and there is greater competitive interest in exploring New Zealand's basins for petroleum.
The level of interest in the Great South Basin was also materially enhanced by the Crown's acquisition of data. The level of work proposed in the recently awarded exploration permits for that area could double the exploration effort around New Zealand, with approximately NZ $1 billion exploration expenditure expected there over the next five years.
Information and Communications Technologies
The evolving ICT landscape
The information and communications technology (ICT) sector is notable for ongoing and rapid developments in technology, leading to very large quantity and quality improvements, and cost reductions. The overall challenge remains to maintain investment incentives while improving competition and reducing bottlenecks.
The Digital Strategy
The Digital Strategy, released in 2005, is well established, and the Ministry is responsible for coordinating the resulting cross-government work programme. That programme includes:
- the National Library leading the development of a draft Digital Content Strategy;
- the State Services Commission instigating a number of initiatives, including the Government Shared Network, e-authentication, and the e-Government Strategy update;
- the Ministry of Research, Science and Technology implementing the Kiwi Advanced Research and Education Network (KAREN); and
- the Ministry of Culture and Heritage progressing digital TV and cultural portal initiatives.
In addition, the Ministry progressed specific elements of the Digital Strategy, including the security and confidence discussion document, and implementation of spam and telecommunications legislation.
The two major Digital Strategy grant funds – the Community Partnership Fund and the Broadband Challenge Fund – progressed, and successful applications to the first round of both funds were announced.
Telecommunications regulatory changes
The Ministry has started a review of the Telecommunications Service Obligation.
A significant component of the new Telecommunications Amendment Act, passed in December 2006, is the requirement for the Ministry to support the Telecommunications Minister in developing a regulatory determination to implement the Act's requirements for the operational separation of Telecom. The Ministry has consulted on the operational separation model, which will form the basis for the regulatory determination, and the Minister is expected to release this determination in the second half of 2007.
Supporting the uptake of new technology
New technology offers opportunities to enable greater sector development of innovative technologies and services, including methods of approaching radio spectrum allocation and management.
Advice was provided on allocating spectrum for new broadband wireless access technologies and services, including:
- the completion of a Cabinet stocktake paper on future allocation opportunities;
- planning for the 2.3/2.5 GHz auction;
- creation of new public park licences for broadband wireless technologies; and
- the conclusion of the initial allocation round and planning for the second allocation round of 3.5 GHz spectrum area licences.
Overarching Infrastructure Issues
As part of the Government's economic transformation agenda, the Ministry helped coordinate overarching infrastructure policy initiatives. The Ministry also continued to support other Ministries' work on particular infrastructure issues significant to economic development. Specific initiatives included:
- participating in work on improving freshwater allocation and quality, in particular, development of a national policy statement;
- contributing to key transport-related initiatives, including developing the implementation of the New Zealand Transport Strategy;
- advising the Ministry for the Environment (MfE) on a proposed National Policy Statement (NPS) and National Environment Statement (NES) for electricity transmission;
- advising on next steps in preparation of a draft NES under the Resource Management Act for telecommunications;
- in conjunction with MfE, advising on the development of an NPS for electricity generation. (This work has been delayed pending the development of the NZES);
- facilitating participation of infrastructure providers in earthquake and pandemic preparedness exercises; and
- the Government Urban and Economic Development Office (GUEDO) focused on infrastructure issues in relation to Auckland.
Contributing to Other Government Priorities
Reducing Inequalities
The Ministry has a key role in assisting the Government to develop and implement policies and services that promote economic growth. While the outputs produced under the Ministry's Votes are not specifically focused on reducing inequality, much of our work makes a general contribution towards the outcome of diminishing economic and social disparities for Mäori and Pacific peoples.
Examples of relevant policy areas in which contributions were made during 2006/07 are:
- improving access to finance for all businesses;
- facilitating businesses' access to international markets and opportunities;
- changes in the telecommunications markets aimed at reducing charges and broadening coverage;
- protection and use of intellectual property rights;
- lowering business transactions and compliance costs; and
- promoting appointments of Mäori and Pacific people to government boards, advisory groups and networks.
The Ministry also worked with the Ministry of Pacific Island Affairs and Te Puni Kökiri when developing policy on economic development issues.
Because of the generic nature of most of our business environment policy outputs and the multitude of factors that influence business performance, it is not possible to make a direct causative link between our work and the performance of an individual firm or even a group of businesses (such as Mäori or Pacific businesses).
However, as part of its efforts to ensure that basic information about consumer rights and responsibilities are readily available, the Ministry of Consumer Affairs continued to differentiate the way it delivered information to maximise penetration of groups of consumers considered to be most vulnerable, including low income Mäori and Pacific people. To assure the relevance of the services targeted to Mäori, they were delivered by the Mäori Women's Welfare League, while the Pacific Consumer Reference Group advised the Ministry on the appropriateness and effectiveness of its communications with Pacific consumers.
Carbon Neutral Public Service
The Prime Minister announced in her Statement to Parliament in February 2007 that the Ministry, along with five other government departments, would take the lead in achieving carbon neutrality in the public service.
The five other lead agencies are the Ministry for the Environment, Treasury, Department of Conservation, Inland Revenue Department and Ministry of Health.
By early 2008, the Ministry and the five other lead agencies will have implemented plans to reduce emissions further and offset remaining emissions, with a target of offsetting all 2007–2012 emissions by the end of 2012.
For information on how the Ministry is managing its own environmental footprint, see the section entitled "Environmental Performance".
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