Recommendations
80. I recommend that the Committee:
Background
1. note that:
1.1 in August 2006, Cabinet agreed to a suite of action areas to be progressed as part of the economic transformation agenda, and agreed that Ministers will provide an update every six months on progress in implementing the agenda [CAB Min (06) 31/3];
1.2 in April 2007, Cabinet agreed that the first economic transformation update on progress should be included in the September 2007 update [CAB Min (07) 11/6];
2. note the substantial progress that has been made in implementing the economic transformation agenda;
3. agree that there is a need to further refine and extend the economic transformation agenda building upon this success;
Future Priorities
4. agree that future priorities for economic transformation should focus on a few key priority areas for the following reasons:
4.1 New Zealand's productivity levels and growth rate need to improve;
4.2 New Zealand needs to be well placed to respond to and capture the commercial opportunities arising out of the strong and growing pressure for environmental sustainability;
4.3 New Zealand needs to be positioned to take advantage of an increasingly integrated global economy.
5. agree that the economic transformation priorities and associated actions over the medium term, subject to economic and fiscal conditions, should include the following:
5.1 improving access to quality fast, reliable broadband services to ensure strong global connections:
5.1.1 accelerating investment in broadband;
5.2 positioning New Zealand as a world-leading exponent of smart and innovative responses to environmental issues:
5.2.1 implementing emissions trading and associated carbon markets to reduce net greenhouse gas emissions;
5.2.2 advancing environmental solutions, including sustainable land management, eco-verification and test beds for sustainability;
5.2.3 developing instruments to provide for water quality and future demand for fresh water;
5.3 developing workplace skills, focusing on literacy and numeracy:
5.3.1 upskilling the workforce;
5.4 supporting business internationalisation and extracting the best value from global value chains:
5.4.1 more sophisticated and integrated in-market business support;
5.4.2 integrated and targeted onshore support for internationalising firms, and business opportunities with international potential, with a focus on capability development;
5.5 focussing government investment in areas that reflect and extend New Zealand's strengths:
5.5.1 tackling fragmentation and better aligning government spend across education and training, research, science and technology, business and market development in six areas of focus, namely: pastoral systems, environmental solutions, health solutions, advanced foods, advanced materials and digital content;
5.6 making Auckland a world-class hub of innovation and internationalisation:
5.6.1 supporting the development of the Auckland Innovation Precinct;
5.6.2 enhancing Auckland's waterfront and supply chain effectiveness;
Broadband
6. note that the government will continue to monitor levels of investment in broadband infrastructure and will initiate a process for engaging with the private sector on this issue;
Environmental Issues
7. direct the Ministry of Economic Development (MED) and the Ministry for the Environment (MfE) in conjunction with the Ministry of Agriculture and Forestry (MAF) and the Department of Conservation (DoC) to:
7.1 develop a framework for identifying the government's role in supporting the effective development of voluntary carbon markets, paying particular attention to issues such as emerging market platforms, the capability and application of eco-verification methods, and clear messaging in engagement with business and households;
7.2 report to the Minister of Finance, Minister of Agriculture, Minister for Economic Development, Minister of Commerce, and Acting Minister for the Environment by 30 April 2008 on a proposed framework;
8. note that a comprehensive report to Ministers on progress in marshalling eco-verification expertise, leveraging existing eco-verification infrastructures and supporting uptake of eco-standards and eco-labels, is due by 30 April 2008;
9. direct officials from MED, MfE, MAF and Ministry of Research Science and Technology to report to Cabinet Policy Committee (POL) by February 2008 on the potential for New Zealand to be promoted as an internationally-recognised test bed for sustainability, with options for how the concept could be grounded;
10. direct officials from MfE, MAF and MED to report to the Minister of Agriculture, Minister for Economic Development, and Acting Minister for the Environment by 31 March 2008 with proposals for instruments to provide for water quality and future demand for freshwater;
11. agree that setting realistic, achievable and consistent targets in specific areas as a means of completing an overall picture of what a sustainable New Zealand looks like provides a firm basis on which the government and business can partner to achieve change, and which businesses can take into account in their decision-making;
12. direct officials to develop targets in specific areas clearly linked to outcomes, and to report to the Minister for Economic Development and the Acting Minister for the Environment with recommendations by 31 January 2008;
Workplace skills
13. note that the Ministry of Education, the Department of Labour and the Tertiary Education Commission are due to report to POL by 31 October 2007 on a strategy to "Upskill the workforce" which will examine proposals for putting significant effort into workplace language, literacy and numeracy development;
Internationalisation
14. direct officials from MED, the Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise (NZTE), in consultation with the Treasury to report back to POL by 15 December 2007 with further details on the nature and implications of the two supporting business internationalisation proposals, namely:
14.1 more sophisticated and integrated in-market business support;
14.2 integrated and targeted onshore support for internationalising firms, and business opportunities with international potential, with a focus on capability development;
15. note that further options are being considered by economic transformation Ministers on initiatives to transform small and medium enterprise capability, productivity and potential for internationalisation;
16. invite the Minister for Economic Development and the Minister for Small Business to report back to POL by early November 2007 on any further initiatives arising from this consideration in paragraph 15 which should be incorporated into the economic transformation agenda;
Research and Technology
17. note that officials are due to report back to the Minister for Tertiary Education, the Minister of Research, Science and Technology and the Minister for Industry and Regional Development with final proposals for areas of technology focus by 31 October 2007 and on mechanisms for implementation by 15 December 2007;
18. note that MoRST and MED, in consultation with relevant agencies, will be reporting to the Minister of Research, Science and Technology and the Minister of Economic Development on future opportunities to further improve the innovation system [EDC (07) Min 13/3];
Auckland Issues
19. direct MED and NZTE in consultation with MoRST, the Tertiary Education Commission, the Department of Labour, the Foundation for Research, Science and Technology and the Treasury, to report to the Minister of Finance, Minister for Tertiary Education, Minister of Research Science and Technology and Minister for Economic Development by 15 December 2007, on the role for government in relation to the wider Innovation Precinct, as part of the report back on the feasibility study for the Auckland Innovation Centre;
20. direct MED, Ministry of Transport, MfE, Treasury and the Department of Internal Affairs to report to the Minister of Finance, Minister of Transport, Minister for Economic Development, Minister of Local Government and Acting Minister for the Environment by March 2008 on whether, and if so how, central government should engage with local and regional stakeholders on the future of the Auckland waterfront development;
21. note that in the interim officials will be holding exploratory discussions with controlling parties of waterfront assets;
Next Steps
22. note that the agreed priorities will feed into and guide future Budget decisions, and the financial implications of specific initiatives will be identified and considered through the Budget process in the light of the overall fiscal context;
23. note that the Minister of Economic Development intends to publicly release the paper under CAB (07) 554 at an appropriate time, subject to any withholdings that may be required in accordance with the Official Information Act 1982.
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