[ Last Updated 7 November 2006 ]
Short Description
A review of the government's business assistance programmes shows they are helping firms to be competitive at home and abroad, but some improvements will be made to better target assistance, Economic Development Minister Trevor Mallard announced today.
Author
Hon Trevor Mallard, Minister of Economic Development
A review of the government's business assistance programmes shows they are helping firms to be competitive at home and abroad, but some improvements will be made to better target assistance, Economic Development Minister Trevor Mallard announced today.
The review was one of a series announced last year aimed at continual improvements in performance. The remaining ministerial expenditure reviews have been delayed until next month to ensure that links are made between the reviews' findings.
"The government's economic transformation agenda demonstrates our commitment to enhancing business capability and growing world-class, internationally competitive New Zealand firms. Getting our business assistance programmes right, and on a continuous cycle of enhancement is a key part of that transformation work as we adapt to changing global environments," Trevor Mallard said.
"While the review showed the government is generally on the right track with its business support, improvements will be adopted to maximise the benefits for business.
"The review identified some key issues. For example, our programmes are based on international best practice but there is also a need for the programmes to be more closely linked to the specific needs of New Zealand firms, and the unique conditions shaping our economy.
"It also found that the effectiveness of the programmes will be improved by better coordination of policy and strategies across those government agencies administering the programmes. This will better target assistance."
Among the changes adopted following this review:
- Ministry of Economic Development (MED) will work with agencies including the Ministry of Research, Science and Technology and the Tertiary Education Commission to review funding for programmes supporting innovation, education and business partnerships between firms, Crown Research Institutes and tertiary education institutes, to ensure that priorities are more closely aligned.
- Government agencies will also start working on a framework to allow them to jointly assess their priorities for business assistance. The Ministry of Economic Development (MED) will report back on this work to Cabinet by the end of April 2007.
- The review also proposed a series of measures to shift the focus of activities to support more explicitly international connections, innovation and investment.
Seven individual programme evaluations were also released today that link in with this review. These were part of MED's regular evaluation process for business assistance programmes.
The programmes evaluated were Information Services, Escalator, Sector Projects, World Class New Zealanders, the Enterprise Network Fund, the GIF Industry Governed Body Fund and the GIF Sector Project Fund - all operated by government economic development agency New Zealand Trade and Enterprise. An overview of sector programmes was also released.
Trevor Mallard said four of the seven programmes were found to be effective in their current form, meeting the needs of business and government, and giving tangible benefits to the firms involved.
"The Escalator and Sector Projects programmes, together with the GIF Industry Governed Body Fund and the GIF Sector Project Fund, will continue largely in their current forms."
The Information Services Programme and the World Class New Zealanders Programme will also continue mostly unchanged, but with altered budgets.
The part of the World Class New Zealand budget used mainly to bring international business experts to New Zealand will be redirected into NZTE's wider sector budget to ensure such visits continue to align with NZTE's sector activities.
The Enterprise Network Fund will be disestablished as a stand-alone programme, with the funding to be absorbed into NZTE's wider sector budget.
"While the Enterprise Network Fund will not continue as a separate programme, NZTE will continue its work to support groups of firms to attend off-shore events," Trevor Mallard said.
Questions and answers about the review of business assistance programmes and fact sheets about each programme evaluation were also released today.
Review of Business Assistance Programmes - Questions and Answers
What Was the Purpose of the Review?
Currently government spends some $287 million a year on supporting New Zealand businesses through a wide range of business assistance programmes.
The review was one of several ministerial expenditure reviews announced earlier this year across the state sector. These reviews are aimed at ensuring government continues to get the best value for money and are part of the government's commitment to continually improve and enhance public services.
This review of business assistance programmes assessed whether or not the mix of programmes and funding arrangements for business assistance was working and if any improvements could be made to further lift business success.
What Did the Review Cover?
The review considered business assistance programmes delivered by New Zealand Trade and Enterprise, the Ministry of Economic Development and the New Zealand Venture Investment Fund Limited. A full list is available at Expenditure Review of Business Assistance Programmes.
What Are the Key Findings?
The government's business assistance programmes are generally achieving their objectives and are comparable with those in other similar jurisdictions, but recommends some improvements:
- changes to the emphasis of existing programmes in order to address the particular issues facing New Zealand firms, namely internationalisation, innovation and access to capital.
- improved targeting of business assistance programmes and greater coordination across government agencies providing assistance to businesses.
In particular it recommends:
- increase the targeting of NZTE's international connections activity;
- increase the alignment the activities funded by business capability grants with the objectives of increasing internationalisation of New Zealand businesses and innovation;
- extend NZTE's strategy in assisting businesses to internationalise;
- ensure Investment New Zealand's support of inward investment enhances the international connectedness of New Zealand firms;
- ensure effective information sharing between Investment New Zealand and NZVIF to facilitate New Zealand firms access to domestic sources of finance; and
- increase access to finance programmes' focus on underdeveloped markets.
The review also recommends reallocating funding within the Vote, co-funding arrangements for some programmes and adjustments to programme breadth including:
- reducing the multi-year appropriation for the Regional Partnership Programme by up to $10 million in 2006/2007. This will feed into the current review of regional economic development policy. The proposed reduction is due to consistent underspends and will not affect the ability of regions to access funding;
- ensuring levels of programme subsidy reflect the social benefits of activities;
- enhancing the related business capability development programmes by bringing them together under a single overarching programme umbrella;
- amalgamating training activities' funding streams, programme design, administration and contracting processes; and
- improving the statement of intent and output agreement process to ensure these documents reflect programme objectives to be pursued.
What Will Be Done with the Results?
The review recommendations will be adopted, with work underway to ensure they will form the basis for future decisions about the scope, mix and range of business assistance programmes.
Who Took Part in the Review?
The general public through an open submission process, and stakeholders including Regional Economic Development Agencies, Chambers of Commerce, Employers and Manufacturers' Association, Council of Trade Unions, New Zealand Institute, Business New Zealand, Export New Zealand, Growth and Innovation Advisory Board, Small Business Advisory Group, and a sample of New Zealand businesses. Other government departments delivering business assistance were also interviewed.
Who Conducted It?
A cross-agency team from the Ministry of Economic Development, New Zealand Trade and Enterprise, the Ministry of Foreign Affairs and Trade, the Treasury and the State Services Commission.
How Does This Review Relate to the Evaluations also Released Today?
All business assistance programmes are already subject to regular evaluation. The review complements this evaluation work by pulling together conclusions from all the evaluations and looking across the combined impact of all the programmes to see how we can increase the contribution they make to New Zealand's economic transformation.
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