Executive Summary
2. Economic Transformation is fundamentally about changing a country's mix of goods and services towards those that provide higher value and higher returns – products which differentiate on the basis of quality and innovation rather than cost.
3. Other small economies with similar characteristics to New Zealand have succeeded in leveraging off their natural resource bases to move into higher value products through collaborative efforts by the public and private sectors. There is no reason why New Zealand cannot have similar success.
4. The ET agenda builds on the direction of the Government's Growth and Innovation Framework to improve income per capita through innovation and raising productivity in an environmentally sustainable way. We have made substantial progress in implementing the ET agenda over the past year, including:
- A new approach to developing the telecommunications sector
- Developing the NZ Energy Strategy
- A $1.3 billion funding package for transport
- Initiatives to respond to climate change, including an emissions trading scheme
- Introducing tertiary education reforms
- A $3.4 billion package to encourage companies to grow and invest, undertake R and D and expand internationally
- Deepening capital markets, including enhancing KiwiSaver
- Launching the Metro Project action plan for transforming Auckland's economy.
5. To build on these achievements, a continued, yet sharper focus on a few key priority areas is critical for three reasons:
- our productivity levels and growth rate need to improve;
- we need to be well placed to respond to and capture the commercial opportunities arising out of the strong and growing pressure for environmental sustainability; and
- we need to position ourselves to take advantage of an increasingly integrated global economy.
6. In a series of meetings on each of the ET sub-themes, Ministers have identified six priorities (in addition to ongoing and planned work) for achieving this sharper focus:
- improving access to quality, fast, reliable broadband services to ensure strong global connections
- positioning New Zealand as a world-leading exponent of smart and innovative responses to environmental issues
- developing workplace skills, focussing on basic literacy and numeracy
- supporting business internationalisation and extracting the best value from global value chains
- focusing government investment in areas that reflect and extend New Zealand's strengths
- making Auckland a world-class hub of innovation and internationalisation.
7. This paper seeks Cabinet's agreement to proposed actions for achieving these six priorities. Overall the aim for the next steps of the ET agenda is to achieve a step change in New Zealand's productivity and economic growth which builds on New Zealand's unique strengths and which advances New Zealand towards a sustainable future.
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