Performance Information for Appropriations
Vote Economic Development
MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister for Economic Development (M25), Minister for Small Business (M62), Minister for the Rugby World Cup (M79) ADMINISTERING DEPARTMENT: Ministry of Economic Development MINISTER RESPONSIBLE FOR MINISTRY OF ECONOMIC DEVELOPMENT: Minister for Economic Development
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Part 1 - Summary of the Vote
Part 1.1 - Overview of the Vote
The Minister for Economic Development is responsible for appropriations in the Vote for the 2010/11 financial year covering the following: • a total of just under $21 million for policy advice on economic, industry and regional development policies and initiatives to promote sustainable economic development and issues related to small and medium enterprises
• a total of just under $159 million for New Zealand Trade and Enterprise operating expenses • a total of just under $33 million for New Zealand Trade and Enterprise cash grant schemes
• a total of just under $92 million for other services related to firms and industry
• a total of $5.400 million for capital expenditure in the Ministry of Economic Development, and
• a total of just over $8 million for capital investments in the early stage equity finance markets and offshore market development assistance to business. Details of these appropriations are set out in Parts 2-6 below.
Part 1.2 - High-Level Objectives of the Vote
Government Priorities and Outcomes - Links to Appropriations
Government Priorities Government Outcomes Appropriations
Support for science, innovation and trade Enterprising and innovative businesses Policy Advice and Sector Leadership-Firm Capability, Sectoral and Regional Development Policy Advice - Small Business Analysis and Development Services for Firms Regional and Sector Development Services Standardised Training and Advisory Services International linkages Policy Advice and Sector Leadership-Firm Capability, Sectoral and Regional Development Analysis and Development Services for Firms Identification and Coordination of International Market Opportunities International Investment Facilitation Services New Zealand’s participation at Expo 2010 Shanghai, China - MYA Standardised Training and Advisory Services
A productive and competitive Auckland Policy Advice and Sector Leadership-Firm Capability, Sectoral and Regional Development Regional and Sector Development Services Dynamic and trusted markets Policy Advice and Sector Leadership-Firm Capability, Sectoral and Regional Development International Investment Facilitation Services Investment Fund Management
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Government Priorities Government Outcomes Appropriations
Better regulation Ease of doing business Policy Advice and Sector Leadership-Firm Better public services Capability, Sectoral and Regional Development Policy Advice-Small Business
Objectives of the Vote The Government’s goal is to lift the long-term performance of the economy in order to make New Zealand a more prosperous country, capable of providing well-paid jobs and a better standard of living, and to provide the world-class public services needed to give opportunity and security to New Zealanders. Work under Vote Economic Development directly contributes to this goal by aiming to help develop enterprising and innovative businesses; improve international linkages; make Auckland more productive and competitive; create dynamic and trusted markets; and increase ease of doing business. The Vote provides advice on how the government can promote economic development across the economy as a whole, as well as through firms, sectors and regions.
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VOTE ECONOMICDEVELOPMENT 110 ECONOMIC DEVELOPMENT AND INFRASTRUCTURE SECTOR - INFORMATION SUPPORTING THE ESTIMATES 2010/11 B.5A Vol.1 Vol.1 B.5A 2010/11 ESTIMATES THE SUPPORTING INFORMATION - SECTOR INFRASTRUCTURE AND DEVELOPMENT ECONOMIC Part 1.3 - Trends in the Vote
Summary of Financial Activity
2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14
Non- Departmental Departmental Estimated Transactions Transactions Total Actual Actual Actual Actual Budgeted Actual Budget Budget Budget Estimated Estimated Estimated $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 $000 Appropriations
Output Expenses 157,416 160,853 178,447 186,425 222,448 219,872 20,962 161,182 182,144 169,858 167,610 167,609 Benefits and Other Unrequited Expenses ------N/A - - - - - Borrowing Expenses ------
Other Expenses 116,398 78,071 299,348 114,413 189,179 172,940 - 122,795 122,795 101,209 87,983 85,213 Capital Expenditure 40,288 48,180 200,806 25,924 133,148 37,838 5,400 8,147 13,547 5,172 5,172 5,172
Intelligence and Security Department Expenses ------N/A--- - and Capital Expenditure Total Appropriations 314,102 287,104 678,601 326,762 544,775 430,650 26,362 292,124 318,486 276,239 260,765 257,994
Crown Revenue and Capital Receipts Tax Revenue ------N/A---- -
Non-Tax Revenue ------N/A - - - - - Capital Receipts ------N/A - - - - -
Total Crown Revenue and Capital Receipts ------N/A---- -
VOTE ECONOMIC DEVELOPMENT
New Policy Initiatives
2009/10 2010/11 2011/12 2012/13 2013/14 Budgeted Budget Estimated Estimated Estimated Policy Initiative Appropriation $000 $000 $000 $000 $000 Funding for the Kiwi Expats Regional and Industry - 600 400 200 - Association Development Fund
Transfer of responsibility for Policy Advice and Sector 1,091 1,041 1,041 1,041 1,041 Government Procurement from Leadership - Firm Capability, Vote Commerce Sectoral and Regional Development
Government Procurement Reform Policy Advice and Sector 3,000 - - - - Leadership - Firm Capability, Sectoral and Regional Development
West Coast Timber Industry West Coast Timber Industry 4,000 - - - - Settlement Settlement The Release and Redevelopment Purchase of Queen’s Wharf, 20,000 - - - - of Queen’s Wharf, Auckland Auckland
RWC Free-to-Air Broadcasting Rugby World Cup Free-to-Air 640 1,600 960 - - Rights Broadcasting Rights Final Fund Applications Enterprise Development Fund 600 - - - -
Contribution to the Establishment Identification and Co-ordination of - (70) (140) (150) (151) of the Productivity Commission International Market Opportunities Contribution to the Establishment Regional Partnerships - (48) (94) (100) (100) of the Productivity Commission and Facilitation
Funding for Economic Growth Identification and Co-ordination of (180) - - - - Agenda and Managed Funds International Market Opportunities Domicile work
Funding for Economic Growth Regional And Sector (570) - - - - Agenda and Managed Funds Development Services Domicile work Funding for Economic Growth International Biotechnology (3,270) - - - - Agenda and Managed Funds Partnerships Domicile work
Funding for Economic Growth Policy Advice and Sector - 1,500 - - - Agenda and Managed Funds Leadership - Firm Capability, Domicile work Sectoral and Regional Development
Funding for Economic Growth Transformational Initiatives Fund - 2,520 - - - Agenda and Managed Funds Domicile work Food Innovation Network Establishment and operation of 5,000 9,015 5,360 950 780 the Food Innovation Network New Zealand
Food Innovation Network Regional Partnerships and (3,000) (6,115) (5,360) (950) (780) Facilitation
Food Innovation Network Transformational Initiatives Fund (2,000) - - - -
Square Kilometre Array Square Kilometre Array - 1,000 700 700 600
Square Kilometre Array Regional Partnerships - (1,000) (700) (700) (600) and Facilitation Rowing NZ High Performance Grant to Rowing New Zealand 1,000 - - - - Centre
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2009/10 2010/11 2011/12 2012/13 2013/14 Budgeted Budget Estimated Estimated Estimated Policy Initiative Appropriation $000 $000 $000 $000 $000 Rowing NZ High Performance Negotiation and Completion (1,000) - - - - Centre of Stadium Projects
Funding for the NZ 2011 Office Policy Advice and Sector 750 2,750 1,500 - - Leadership - Firm Capability, Sectoral and Regional Development
Funding for the NZ 2011 Office Rugby World Cup Leverage - 3,300 7,950 - - and Legacy Programmes Funding for the NZ 2011 Office Regional Partnerships - (5,650) - - - and Facilitation
Funding for the NZ 2011 Office International Biotechnology - (2,300) - - - Partnerships Total Initiatives 26,061 8,143 11,617 991 790
Analysis of Significant Trends
Total Vote: All Appropriations Figure 1 - Trends in actual and estimated expenses and capital expenditure
Source: Ministry of Economic Development The departmental and non-departmental appropriations in Vote Economic Development, which are detailed in the Summary of Financial Activity table above, show the following significant changes below:
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Departmental output expense Figure 2 - Trends in departmental output expenses
Source: Ministry of Economic Development The increase between 2006/07 and 2007/08 mainly reflects the Buy Kiwi Made Marketing programme of $6.400 million. The decrease between 2007/08 and 2008/09 mainly reflects the cessation of the Buy Kiwi Made Marketing Programme of $5.682 million, and the disestablishment of the Growth and Innovation Advisory Board of $115,000 offset by increased Rugby World Cup costs of $790,000. The increase between 2008/09 and 2009/10 mainly reflects the Government Procurement reform programme costing $4.239 million, the Rugby World Cup NZ 2011 office of $1.496 million and the Volunteer Recruitment website for major events of $500,000. The decrease between 2009/10 and 2010/11 reflects reduced funding for both the Government Procurement reform programme of $3.6 million, Cross Departmental Research of $270,000 and the Volunteer Recruitment website and resources bank for major events of $615,000 that were both one-off funding in 2009/10. This is offset by an increase of $3 million for the Rugby World Cup NZ 2011 office in 2010/11. The decrease between 2010/11 and 2011/12 mainly reflects the Rugby World Cup NZ 2011 office of $2.750 million.
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Non-departmental expense Figure 3 - Trends in non-departmental output expenses
Source: Ministry of Economic Development The increases in 2007/08 of $11.653 million and 2008/09 of $13.400 million mainly reflect cost pressures in New Zealand Trade and Enterprise’s (NZTE) offshore offices eg, movements in exchange rates that affect the foreign currency of New Zealand dollar funding provided are adjusted each year. The increase in 2009/10 is mainly due to New Zealand’s Participation at the 2010 Expo in Shanghai, China of $26.448 million, which reduces to only $4.960 million in 2010/11.
Non-departmental other expense Figure 4 - Trends in non-departmental other expenses
Source: Ministry of Economic Development
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A substantial level of reprioritisation has occurred to redirect resources from less effective programmes towards those shown to be more effective. This has seen a reduction in some NZTE operational expenditure and the closure of a number of grant programmes. The decrease from 2005/06 to 2006/07 mainly reflects a lower level of payments made in 2006/07 for the Large Budget Screen Production Fund of $63 million offset by a higher level of assistance from the Market Development Assistance Fund of $23 million. The increase from 2006/07 to 2007/08 mainly reflects the write off of the Eden Park redevelopment suspensory loan in 2007/08 only of $185 million, reflecting the impairment of the loan to the Eden Park Redevelopment Board for the upgrade of Eden Park for the Rugby 2011 World Cup Finals Venue, an increase of payments from the Large Budget Screen Production Fund of $16 million, a higher level of assistance from the Market Development Assistance Fund of $14 million and an increase in payments associated with the Promotion of New Zealand Associated with the America’s Cup of $10 million. The decrease from 2007/08 to 2008/09 mainly reflects the 2007/08 write off associated with the Eden Park suspensory loan of $185 million, payments for Promotion of New Zealand Associated with the America’s Cup of $10 million which were offset by increased payments in 2008/09 for the Large Budget Screen Production Fund of $19 million. The higher estimated actual in 2009/10 is due primarily to an increase in funding for the Regional Partnerships and Facilitation Fund of $4 million, funding of the Louis Vuitton Trophy series of $3 million, one-off funding for the Dunedin and Christchurch Stadiums and similar infrastructure projects of $35 million and a higher level of payments for the Large Budget Screen Production Fund of $5 million. There was also a one-off payment for the West Coast Timber settlement in 2009/10 of $4 million. The decrease between 2009/10 and 2010/11 is due primarily the closure of the Market Development Assistance Fund of $41 million, the one-off funding in 2009/10 for the stadiums and similar infrastructure projects of $35 million, a decrease in 2010/11 for the Large Budget Screen Production Fund of $17 million offset by increases for the International Growth Fund of $20 million, the Promotion of New Zealand Associated with the America’s Cup of $11 million, the establishment and operation of the Food and Innovation Network of $9 million and the Rugby World Cup Leverage and Legacy Programme of $4 million. The decrease between 2010/11 and 2011/12 is due primarily to a reduction in funding for the Promotion of New Zealand Associated with the America’s Cup of $18 million.
Trends in capital expenditure Figure 5 - Trends in capital expenditure
Source: Ministry of Economic Development
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The increase from 2006/07 to 2007/08 mainly reflects the Loan to the Eden Park Redevelopment Board of $185 million, offset by reductions in the Capital Growth Facility of $12 million, Stadium Development of $14 million, and the Venture Investment Fund of $6 million. The decrease between 2007/08 and 2008/09 mainly reflects the 2007/08 Loan to the Eden Park Redevelopment Board of $185 million. The increase between 2008/09 and 2009/10 mainly reflects the purchase of Queen’s wharf in Auckland for $20 million, and increased Departmental capital expenditure of $14 million offset by a decrease in the Venture Investment Fund of $14 million. The decrease between 2009/10 and 2010/11 mainly reflects the 2009/10 purchase of Queen’s Wharf for $20 million and decreased Departmental capital expenditure of $15 million. For further details of new initiatives agreed, refer to the “New Policy Initiatives by Appropriations”.
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Part 2 - Details and Expected Performance for Output Expenses
Part 2.1 - Departmental Output Expenses
Intended Impacts, Outcomes and Objectives
Intended Impacts, Outcomes or Objectives of Appropriations Appropriations
Increased business investment in innovation. Policy Advice - Policy Advice and Increased investment in businesses’ productive capability. Sector Leadership - Firm Capability, Sectoral and Regional Development. Improved business management and strategic capability. Increased opportunities for key economic sectors to grow and compete internationally. Reduced barriers and improved ability for New Zealand firms to access opportunities in overseas markets. Creation of lasting benefits for New Zealand from major events, particularly the 2011 Rugby World Cup. More effective economic development activity in the Auckland region. An Auckland infrastructure and urban form that creates greater opportunities for economic development. Improved business access to capital. More efficient and effective government procurement.
Increased business investment in innovation. Policy Advice - Small Business. Increased investment in businesses’ productive capability. Improved business management and strategic capability. An efficient regulatory environment that does not unnecessarily impose burdens on business. More streamlined business-government interactions that allow businesses to transact with government quickly, cheaply, and effectively.
For further information on the intended impacts, outcomes and objectives of the departmental output expense appropriations, please see the Statement of Intent for the Ministry of Economic Development.
Policy Advice - Small Business (M62)
Scope of Appropriation
This appropriation is limited to policy advice on issues relating to lifting the capability and performance of Small to Medium Enterprises (SMEs), including ministerial servicing and advice on the development, coordination and implementation of policies and programmes that affect SMEs.
Expenses and Revenue
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 1,700 1,544 1,531 Revenue from Crown 1,666 1,510 1,506
Revenue from Other 34 34 25
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Reasons for Change in Appropriation The decrease in appropriation is mainly due to a one-off expense transfer into 2009/10 only of $110,000 for the Business Compliance Cost calculator project and a one-off expense transfer from 2008/09 to 2009/10 of $50,000 due to a delay in the research into the Capability of Small Businesses to comply with Government Regulations. There was one-off expense transfer of funding from NZAID into 2009/10 of $6,000 for the Building Seminar on Ease of Doing Business. Output Performance Measures and Standards
2009/10 2010/11 Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard
Compliance with the Quality Standards for Policy Advice and No less than 3 No less than 3 No less than 3 Ministerial Servicing (refer Conditions on Use of Appropriation), (met expectations) (met expectations) (met expectations) as assessed by the Minister of Small Business twice during the year.
Replies to Ministerial correspondence and Parliamentary 100% within agreed No less than 98% met 100% within agreed questions completed in required timeframes/standard: timelines standard timelines • 100% of reports and oral advice to the Minister are delivered within the timeframes required by and agreed with the Minister. • 100% of draft Ministerial correspondence is submitted to the Minister within 10 working days of receipt in the Ministry. Where only an interim reply is possible, a final reply shall be provided within the following timeframes: • 90% within 20 working days of the original receipt in the Ministry. • 100% within 30 working days of receipt in the Ministry.
Conditions on Use of Appropriation
Reference Conditions Quality Standards for Analysis and Advice Refer Policy Advice and Sector Leadership - Firm Capability, Sectoral and Regional Development output expense below.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Baseline Savings 2008/09 (130) (130) (130) (130) (130) Previous Government
Build capability for small to medium business policy 2005/06 356 356 356 356 356 advice
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Policy Advice and Sector Leadership - Firm Capability, Sectoral and Regional Development (M25)
Scope of Appropriation
This appropriation is limited to the purchase of policy advice, ministerial servicing and programme management for the development, evaluation and overview of economic, industry and regional development policies and initiatives to achieve short and long term economic growth and stability, and improving and leading the public sector procurement policy and practises.
Expenses and Revenue
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 20,769 19,849 19,431 Revenue from Crown 20,389 19,469 19,109
Revenue from Other 380 380 322
Reasons for Change in Appropriation The decrease in appropriation is mainly due to a reduction in funding for Government Procurement reform of $3.650 million in 2010/11, an one-off expense transfer into 2009/10 only from the previous year of $115,000 for the Major Events Resources Bank, one-off funding for the Cross Departmental Research Fund in 2009/10 of $330,000, one-off funding for the Volunteer Recruitment Website for Major Events in 2009/10 of $500,000, reduced funding for the economic transformation agenda of $60,000 in 2010/11 and one-off funding for impact of skills on New Zealand firms of $60,000 in 2009/10. This is offset by increased funding for the RWC 2011 office of $1.500 million and the Managed funds domicile of $1.500 million. There were also one-off transfers in 2009/10 of $200,000 to the Department of Labour for the Investor Migrant “Introduce and Integrate” programme and $175,000 for the Identity Verification Service. Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard
Compliance with the Quality Standards for Policy Advice and No less than a 4 No less than a 3 No less than a 4 Ministerial Servicing (refer Conditions on Use of Appropriation), (met and sometimes (met expectations) (met and sometimes as assessed by the Minister twice during the year. exceeded my exceeded my expectations) expectations)
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2009/10 2010/11 Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard
Policy advice supports the Government in its role as “purchaser” The Ministry receives The Ministry receives The Ministry receives and/or “owner” of a number of Crown entities, statutory boards favourable feedback favourable feedback favourable feedback and other organisations under Vote Economic Development, on the criteria set by the on the criteria set by the on the criteria set by the covering appointments, roles and functions, and the financial Office of the Auditor- Office of the Auditor- Office of the Auditor- and non-financial performance of the following: General in its review of General in its review of General in its review of • New Zealand Trade and Enterprise. Crown entity monitoring Crown entity monitoring Crown entity monitoring work work work • New Zealand Venture Investment Fund Limited with the Crown Ownership Monitoring Unit (COMU). This includes advice to the government on appointments, roles and functions, and on the overall contribution of each organisation to the Government’s policy objectives. Compliance with the Quality Standards for Policy Advice and Ministerial Servicing (refer Conditions on Use of Appropriation), as assessed twice during the year. Replies to Ministerial correspondence and Parliamentary 100% within agreed No less than 98% met 100% within agreed questions completed in required timeframes/standard: timelines standard timelines • 100% of reports and oral advice to the Minister are delivered within the timeframes required by and agreed with the Minister. • 100% of draft Ministerial correspondence is submitted to the Minister within 10 working days of receipt in the Ministry. Where only an interim reply is possible, a final reply shall be provided within the following timeframes: • 90% within 20 working days of the original receipt in the Ministry. 100% within 30 working days of receipt in the Ministry.
Conditions on Use of Appropriation
Reference Conditions
Quality Standards for Analysis and Advice Purpose The objective for the advice is clearly stated; it answers sustainable economic development issues raised by the Minister and demonstrates a clear understanding of the desired outcome of the Government and/or the Minister. Problem Definition Any public policy problem, including the underlying causes, size and materiality of issues, is identified and supported by data or other evidence.
Context There is a clear and logical statement of the issue or problem and why it necessitates Ministerial action. Logic The assumptions behind the advice and the logic of how options will resolve issues and achieve objectives are clear.
Accuracy All material facts are present and accurate and based on reliable research or evaluation findings or other appropriate information. Known gaps that could significantly affect the conclusions are identified and the range of uncertainty stated. Options A range of options is presented that provides clearly differentiated choices and these are rigorously evaluated against the analytical framework. Costs, benefits, consequences and risks/opportunities of the options are assessed as part of the analysis. Where it is not appropriate to use a range of options the reasons are clearly stated. Recommendations Recommendations are clear, logical and action oriented and can stand alone from the rest of the advice. They are sufficient to enable a decision to be made on the proposal or to move to the next decision/action point.
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Reference Conditions Consultation Evidence of thorough and timely consultation with other government departments and interested parties is presented, and their views, including objections, incorporated as appropriate.
Practicality Issues of implementation, technical feasibility, practicality and timing are considered and advice accurately identifies compliance, transitional, legal, machinery of government political, legislative, Treaty of Waitangi, or other issues or risks that require management. Communication Guidance is provided on how communications arising from decisions on the advice should be handled, including an assessment of key stakeholders who should be informed and how.
Presentation Material is presented to suit the target audience and: • is concise and structured in a way which assists others to understand the aim of the advice, key features of the information, analysis and recommendations, and their key implications • uses appropriate language and style • uses empirical evidence • avoids clichés and technical jargon (or where the latter is not possible, it is used appropriately for a general audience), and • is consistent with departmental and Cabinet Office presentation requirements.
Note - All aspects of the standards may not apply to specific pieces of policy advice, given considerations of urgency or the particular nature of the advice to be provided. Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government Funding for the NZ 2011 Office 2009/10 750 2,750 1,500 - -
Funding for Economic Growth Agenda and Managed 2009/10 - 1,500 - - - Funds Domicile work Transfer of responsibility for Government 2009/10 1,091 1,041 1,041 1,041 1,041 Procurement from Vote Commerce
Government Procurement Reform 2009/10 3,000 - - - -
Baseline Savings 2008/09 (1,510) (1,510) (1,510) (1,510) (1,510) Major Events - Continuation and Development of 2008/09 1,012 1,012 1,012 1,012 1,012 Bidding Programme
Previous Government Transformation Initiatives 2007/08 2,000 2,000 2,000 2,000 2,000 National Stadium and Finals Venue for hosting the 2006/07 500 500 500 - - Rugby World Cup 2011, and Auckland Legacy work programme
Implementation and co-ordination of the Economic 2006/07 575 515 515 515 515 Transformation Agenda
Coordination of activity across the public sector around 2006/07 190 190 190 - - the hosting of the Rugby World Cup in 2011 Management and business capability coordinating 2006/07 178 178 178 178 178 project
Infrastructure policy capability beyond the energy and 2005/06 400 400 400 400 400 ICT sectors Implement Auckland economic policy presence 2005/06 318 318 318 318 318
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Part 2.2 - Non-Departmental Output Expenses
Intended Impacts, Outcomes and Objectives
Intended Impacts, Outcomes or Objectives of Appropriations Appropriations
The firms that NZTE works with grow faster, are more successful internationally and deliver Analysis and Development Services for Firms higher economic benefit to New Zealand. (see Note 1)
The firms that NZTE works with grow faster, are more successful internationally and deliver Identification and Coordination of International higher economic benefit to New Zealand. Market Opportunities (see Note 1) The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
The firms that NZTE works with grow faster, are more successful internationally and deliver International Investment Facilitation Services higher economic benefit to New Zealand. (see Note 1) Enterprising and competitive businesses whose success will underpin productivity gains Investment Fund Management and economic growth. Improved business access to capital. Early stage capital markets in New Zealand continue to develop in order to better enable new enterprising and competitive businesses to access finance for growth.
The firms that NZTE works with grow faster, are more successful internationally and deliver Regional and Sector Development Services higher economic benefit to New Zealand. (see Note 1) The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
The New Zealand sectors NZTE works with are stronger and better able to compete Standardised Training and Advisory Services internationally. (see Note 1)
The firms that NZTE works with grow faster, are more successful internationally and deliver New Zealand’s participation at Expo 2010 higher economic benefit to New Zealand. Shanghai, China - MYA (see Note 1)
Note 1 - For further information on the intended impacts, outcomes and objectives of the non- departmental output expense appropriations, please see the Statement of Intent for New Zealand Trade and Enterprise.
Analysis and Development Services for Firms (M25)
Scope of Appropriation
The appropriation is limited to customised advice and support to firms based on analysis of opportunities, issues and risks facing them in their growth and internationalisation, including advice and support for firms to access business assistance grants.
Expenses 2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 18,222 18,222 16,242
Reasons for Change in Appropriation The decrease in appropriation is due to an increased transfer to MED of $45,000 in 2010/11 for the responsibilities of the Business Portal (Business.Govt), and a negative foreign exchange adjustment for NZTE of $185,000 in 2010/11. Savings of $1.750 million in 2010/11 were offered up through the 2009 Value for Money Exercise.
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Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard Number of firms receiving proactive account managed services N/A N/A 400-450 (see Note 1)
Number of firms receiving transactional services and referrals N/A N/A 3,500 - 4,000 (see Note 1) Percentage firm satisfaction by proactive account managed N/A N/A 72% (see Note 2) firms
Percentage firm satisfaction by firms receiving transactional N/A N/A 72% (see Note 2) services and referrals
Note 1 - Account managed services are those that involve an NZTE Account Manager, who manages NZTE’s relationship with the firm and works closely with their senior management team to develop and implement a plan of activity that normally extends between 18 months and two years. Transactional services and referrals provide firms with access to NZTE programmes and services, including NZTE’s international network. Note 2 - International studies of firm satisfaction with business assistance services show that 72% is the mean score. In the absence of historic data for NZTE, the entity will use this industry benchmark and update targets in next year’s Estimates. Note 3 - A new set of measures has been developed for the services in this output class as a result of a Performance Measurement Framework for NZTE. Conditions on Use of Appropriation
Reference Conditions
N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with appropriations.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Baseline Savings 2008/09 - (1,750) (1,750) (1,750) (1,750)
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Identification and Coordination of International Market Opportunities (M25)
Scope of Appropriation
This appropriation is limited to the identification and coordination of international market opportunities for firms through market analysis and intelligence, facilitation into international business networks and marketing and support of New Zealand’s presence at significant international events.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 74,494 73,594 69,450
Reasons for Change in Appropriation The decrease in appropriation is mainly due to the reversing of unfunded Budget 2008 commitments for Economic Transformation: Innovation of $800,000 in 2010/11 (this reversal was decided as part of Budget 2009), a negative foreign exchange adjustment for NZTE of $2.695 million for 2010/11 and one-off funding of $159,000 for TNF: Resources for WTO and FTA / CEP Negotiations for 2009/10. There was one-off funding of $1.500 million in 2009/10 for the Asia Strategy Expansion Project - New Concept Centre in Shanghai. Also $180,000 was given up for the Economic Growth Agenda in 2009/10 and $70,000 was given up as NZTE’s contribution to the Productivity Commission’s establishment and operation in 2010/11. Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard Number of introductions made to firms by NZTE offshore offices N/A N/A 1500 - 1800
Number of leads given to firms by NZTE offshore offices (see Number of leads Met Minimum 900 leads Note 1) (see Note 2) Implement key marketing and communications campaigns 4 to 6 key marketing Met 4 to 6 key marketing and around sector projects and/or strategic initiatives and communications communications campaigns will be campaigns provided (see Note 3) will be provided Number of firms actively engaged in Beachheads A minimum of 90 firms Met A minimum of 90 firms are active in the are active in the Beachheads programme Beachheads programme Percentage firm satisfaction with international opportunities N/A N/A 72% (see Note 4) received from NZTE offshore offices
Percentage firm satisfaction with NZ brand at international Effectiveness will be An average of 91% of 85% events measured through a all relevant clients post campaign client surveyed believed the survey new Zealand branding is useful or very useful in supporting their business objectives (as at October 2009)
Percentage firm satisfaction with Beachheads N/A N/A 72%
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Note 1 - These activities may include: providing advice to firms on market entry and expansion; development and distribution of market research and market intelligence reports; trade shows; workshops; forums or market visits. Note 2 - A lead connects firms and partners to opportunities (international and domestic) that will be beneficial to them and that have a clearly defined outcome or benefit to warrant NZTE engagement. Note 3 - Funding for Marketing activities was reduced in 2009/10 following the value for money exercise. Note 4 - International studies of firm satisfaction with business assistance services show that 72% is the mean score. In the absence of historic data for NZTE, the entity will use this industry benchmark and update targets in next year’s Estimates. Conditions on Use of Appropriation
Reference Conditions
N/A Projects will be approved, managed and monitored according to NZTE internal processes (project management guidelines and criteria and government policy).
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Contribution to the Establishment of the Productivity 2010/11 - (70) (140) (150) (151) Commission
Funding for Economic Growth Agenda and Managed 2009/10 (180) - - - - Funds Domicile work Savings 2008/09 (700) (1,500) (1,700) (1,700) (1,700)
Previous Government
Expanding the Beachheads Programme and leveraging 2007/08 1,000 1,000 1,000 1,000 1,000 the development of NZ’s international networks to support the development of globally competitive firms.
In-market assistance for New Zealand firms in China, 2007/08 2,537 2,537 2,537 2,537 2,537 India and Japan.
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International Investment Facilitation Services (M25)
Scope of Appropriation
This appropriation is limited to coordination and analysis of opportunities for investment into New Zealand and investment by New Zealand firms into international markets.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 15,206 15,206 13,613
Reasons for Change in Appropriation The decrease in appropriation is mainly due to the reversing of unfunded Budget 2008 commitments for Economic Transformation: Innovation of $1.100 million in 2010/11 (this reversal happened as part of Budget 2009) and a negative foreign exchange adjustment for NZTE of $593,000 in 2010/11, offset by reduced savings given up in 2010/11 of $100,000. Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard Investment New Zealand will host potential investors to NZ 10-15 individuals Met 10-15 individuals under the Visiting Investor Programme. hosted during the year hosted during the year
Number of investment opportunities facilitated by Investment 2-6 cases managed Met 2-6 clients (at case+ New Zealand progressing to case + stage. during the year stage) managed Number of deals in pipeline. N/A N/A 220-250 cases in the pipeline
Aggregate dollar value of deals in pipeline. N/A N/A $200m direct economic impact Number of firms receiving outward direct investment advice. N/A N/A 15
Percentage satisfaction of Investment NZ clients with N/A N/A 72% (see Note 1) Investment NZ delivery.
Note 1 - International studies of firm satisfaction with business assistance services show that 72% is the mean score. In the absence of historic data for NZTE, the entity will use this industry benchmark and update targets in next year’s Estimates. Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with appropriations.
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Baseline Savings 2008/09 (2,000) (3,000) (3,000) (3,000) (3,000)
Investment Fund Management (M25)
Scope of Appropriation
Operational costs of the Venture Investment and Seed Co-investment Funds.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 2,330 2,330 2,330
Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard Selection of Venture Capital Fund Managers - Selection Standard practices Met Standard practices methodology and due diligence to select investment managers; are followed are followed investment charters and governance processes conform to industry “standard practice”. Selection of Seed Fund Co-investment partners - Selection Standard practices are Met Standard practices are methodology and due diligence to select investment managers; followed followed investment charters and governance processes conform to industry “standard practice”.
Manage the Venture Investment Fund and the Seed Co- Standard practices are Met Standard practices are investment Fund - Fund management conforms to industry followed followed “standard practice” for venture capital “fund of funds” and angel co-investment portfolio.
Monitor the performance and results achieved by the seed fund 100% adherence Met 100% adherence managers and the angel networks. with agreed with agreed performance measures. performance measures. Compliance monitoring Compliance monitoring as specified in the as specified in the Output Agreement Output Agreement
Provision of advice to the Minister as required will be delivered 100% within Met 100% within within 15 working days of the formal request, unless otherwise agreed timelines agreed timelines agreed, and will be of a standard acceptable to the Minister.
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Baseline Savings 2009/10 (260) (260) (260) (260) (260)
Previous Government Administration of Seed Co-Investment Fund 2008/09 700 700 700 700 700
Operating funding for Seed Co-investment Fund and 2006/07 400 400 400 400 400 Venture Investment Fund Improving access to finance - establish the Seed Co- 2005/06 512 512 512 512 512 investment Fund
Transfer administration of the NZ Venture Investment 2005/06 978 978 978 978 978 Fund from Vote Research, Science and Technology
New Zealand’s Participation at Expo 2010 Shanghai, China (M25)
Scope of Appropriation and Expenses
Type, Title, Scope and Period of Appropriations Appropriations, Adjustments and Use $000
New Zealand’s Participation at Expo 2010 Shanghai, China (M25) Original Appropriation 26,600
This appropriation is limited to New Zealand’s participation at Expo 2010 in Adjustments to 2008/09 9,756 Shanghai, China. Adjustments for 2009/10 - Commences: 1 July 2008 Adjusted Appropriation 36,356
Expires: 30 June 2011 Actual to 2008/09 Year End 4,948 Estimated Actual for 2009/10 26,448 Estimated Actual for 2010/11 4,960
Estimated Appropriation Remaining -
Output Performance Measures and Standards
2009/10 2010/11 Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard
Ministerial-led missions N/A N/A 3 fully supported missions Companies using VIP hospitality at the pavilion N/A N/A 140 companies
New Zealand business people attending related events at NZ N/A N/A 450 individuals Central
Seminars/workshops held for New Zealand delegations N/A N/A 12 seminars/workshops Support provided for non-ministerial New Zealand delegations N/A N/A 16 delegations Percentage firm satisfaction with NZTE delivery at Shanghai N/A N/A 80% expo
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government New Zealand’s participation at Expo 2010 Shanghai, 2008/09 16,200 4,800 - - - China.
Regional and Sector Development Services (M25)
Scope of Appropriation
This appropriation is limited to customised advice and support to regional institutions for the development of regional economic development strategies, and to sectoral industry bodies and groups of firms for the development and implementation of plans to improve the performance of sectors.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 47,514 47,514 39,022
Reasons for Change in Appropriation The decrease in appropriation is mainly due to a foreign exchange adjustment for NZTE of $462,000 in 2010/11, a decrease for the Food and Beverage Taskforce of $3.500 million in 2010/11, a decrease for the reversing of unfunded Budget 2008 commitments for Economic Transformation: Innovation of $1.400 million in 2010/11 (this reversal happened as part of Budget 2009) and one-off expense transfers in 2009/10 for the Food and Beverage Taskforce of $1.200 million. When the new NZTE appropriation structure was setup, funding requirements were forecast to reduce by $500,000 in 2010/11. Increased savings of $2 million in 2010/11 were offered up through the 2009 Value for Money Exercise and $570,000 was given up in 2009/10 to help fund the Economic Growth Agenda.
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Output Performance Measures and Standards
2009/10 2010/11 Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard
Number of strategic initiatives and sector projects delivered in Up to 6 strategic Met Up to 4 strategic partnership with industry initiatives and up to initiatives and up to 4 major sector projects 4 sector projects delivered in the delivered in the 2010/11 2009/2010 financial year financial year (see Note 1)
Number of firms and partners participating in strategic initiatives N/A N/A 410-430 and sector projects Percentage of milestones achieved in strategic initiatives and 90% of agreed Met 90% of agreed sector projects milestones in each milestones in each programme plan strategic initiative plan achieved achieved Number of firms assisted to improve productivity through: N/A N/A Better By Design: • Better By Design 70-80 firms • Lean Business Lean: 55-65 firms
Percentage firm satisfaction with N/A N/A 72% (see Note 2) • Better By Design • Lean
Note 1 - Strategic initiatives and sector projects may run over several years. Delivery refers to those activities under the strategic initiative or sector project approved for the 2009/10 financial year. Details of the specific strategic initiatives and major sector projects, including milestones, will be specified in the NZTE’s Output Agreement with ministers. Note 2 - International studies of firm satisfaction with business assistance services show that 72% is the mean score. In the absence of historic data for NZTE, the entity will use this industry benchmark and update targets in next year’s Estimates. Conditions on Use of Appropriation
Reference Conditions N/A Projects will be approved, managed and monitored according to NZTE internal processes (project management guidelines and criteria).
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Funding for Economic Growth Agenda and Managed 2009/10 (570) - - - - Funds Domicile work Globally Competitive Firms - New Zealand Firms 2008/09 1,150 1,150 1,150 1,150 1,150 Operating More Effectively in Global Markets.
Baseline Savings 2008/09 (300) (2,300) (2,300) (2,300) (2,300) Reversal of Unfunded Budget 2008 commitments for 2008/09 (2,800) (4,200) (5,200) (5,200) (5,200) Economic Transformation : Innovation
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Standardised Training and Advisory Services (M25)
Scope of Appropriation
This appropriation is limited to standardised training and advisory services provided by third parties to firms on a range of business development needs including business incubation, capital acquisition, finance brokering and exporting.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 15,765 15,165 15,565
Reasons for Change in Appropriation The decrease in appropriation is due to reduced funding in 2010/11 for the assistance package for SMEs facing difficulties in the current economic climate. Output Performance Measures and Standards
2009/10 2010/11
Budgeted Estimated Actual Budget Performance Measures Standard Standard Standard (See Notes 1 and 2)
Businesses receive management training (see Note 3). Estimated 8,000 - Met Estimated 8,000 - 10,000 businesses 10,000 businesses Clients surveyed indicate that they have taken action to improve 85% of survey Met 85% of survey their business as a result of attending Enterprise Training. respondents respondents
Capital raised by clients with assistance from the Escalator $10 -$15 million in Met $10 -$15 million in service. capital raised capital raised Escalator Service clients indicate (see Note 4) they: 85% of survey Met 85% of survey • gained useful insights and knowledge from dealings with respondents respondents the Escalator Service
• have or intend to implement changes in their business as a 60% of survey Met 60% of survey result of their interaction with the Escalator Service. respondents respondents
Note 1 - Third parties refers to contracted service providers. Note 2 - Some performance measures may change and additional measures may be developed in 2010 as a result of policy development in relation to this output class. Any changes to the measures will be published in the Supplementary Estimates for 2010/11. Note 3 - Management training may include general business management training, export training, executive management training or investment training. This training is currently delivered under the following programmes: Enterprise Training, ETP Export Training, Advanced Export Training, Pre Market Training (working title), Path to Market, Investment Ready, Escalator, Pacific Pre-business Training, CEO Training (working title). Targets for individual training programmes will be included in NZTE’s Output Agreement. Note 4 - As measured by client surveys undertaken by the contracted Escalator Service provider.
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Conditions on Use of Appropriation
Reference Conditions N/A Projects will be approved, managed and monitored according to NZTE internal processes (project management guidelines and criteria) and government policy.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Baseline Savings 2008/09 (500) (500) (500) (500) (500) Previous Government
Business Capability Assessment Tool. 2008/09 900 900 900 900 900 Management and business capability coordinating 2006/07 622 622 622 622 622 project.
Enabling businesses to access information that 2005/06 1,855 1,855 1,855 1,855 1,855 enhances capability and lifts productivity.
Summary of Service Providers for Non-Departmental Outputs
2009/10 2009/10 2010/11 Expiry of Budgeted Estimated Actual Budget Reporting Funding Provider $000 $000 $000 Mechanism Commitment
Crown Entities
New Zealand Trade and 197,649 196,149 158,852 Provider’s Annual Ongoing Enterprise Report • Analysis and Development Services for Firms • Identification and Coordination of International Market Opportunities • International Investment Facilitation Services • Regional and Sector Development Services • Standardised Training and Advisory Services New Zealand’s Participation at Expo 2010, Shanghai
New Zealand Venture Investment 2,330 2,330 2,330 Provider’s Annual Ongoing Fund Limited Investment Fund Report Management Total 199,979 198,479 161,182
The above table summarises funding to be allocated through Vote Economic Development to non- departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.
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Part 5 - Details and Expected Results for Other Expenses
Part 5.2 - Non-Departmental Other Expenses
Intended Impacts, Outcomes and Objectives
Intended Impacts, Outcomes or Objectives of Appropriations Appropriations
Overseas investment in New Zealand firms continues and grows more enterprising and Film New Zealand productive businesses. Improved business access to capital. The firms that NZTE works with grow faster, are more successful internationally and deliver International Growth Fund (see Note 1) higher economic benefit to New Zealand. The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
The firms that NZTE works with grow faster, are more successful internationally and deliver International Biotechnology Partnerships higher economic benefit to New Zealand. (see Note 1) The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
Increased opportunities for key economic sectors to grow and compete internationally. Large Budget Screen Production Fund Overseas investment in New Zealand firms continues and grows more enterprising and competitive businesses. A strengthened New Zealand brand in global markets.
Improved environment for enterprise and growth. Major Events Development Fund Improved business management and strategic capability. Management Development Fund
A strengthened New Zealand brand in global marketplaces. Promotion of New Zealand Associated with Reduced barriers and improved ability for New Zealand firms to access opportunities in the America’s Cup overseas markets. The firms that NZTE works grow faster, are more successful internationally and deliver Regional Partnerships and Facilitation higher economic benefit to New Zealand. (see Note 1) The New Zealand sectors NZTE works with are stronger and better able to compete internationally. Increased business investment in innovation. Improved business management and strategic capability.
The firms that NZTE works with grow faster, are more successful internationally and deliver Sector Strategies and Facilitation (see Note 1) higher economic benefit to New Zealand. The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
Note 1 - For further information on the intended impacts, outcomes and objectives of the non- departmental other expenses appropriations, please see the Statement of Intent for New Zealand Trade and Enterprise.
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Establishment and operation of the Food Innovation Network New Zealand (M25)
Scope of Appropriation
This appropriation is limited to the establishment and operation of the Food Innovation Network New Zealand.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 5,000 350 9,015
Reasons for Change in Appropriation The funding was agreed to by Cabinet in November 2009. The appropriation is focussed on the establishment of the Food Innovation Network New Zealand and the increase is a result of the phased implementation of the Food Innovation Network New Zealand. Note that there is funding of $18.205 million projected over five years. Expected Results
2009/10 2010/11
Budgeted Estimated Actual Budget Standard Standard Standard Funding agreements in place for Manukau hub and Network 1 Funding Agreement Achieved 3 Funding Agreements company establishment.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Food Innovation Network 2009/10 5,000 9,015 5,360 950 780
Film New Zealand (M25)
Scope of Appropriation
Operation of an independent structure for Film NZ, development of a marketing plan for the film sector and coordination of regional film offices.
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Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 799 799 833
Reasons for Change in Appropriation The change in appropriation in 2010/11 of $34,000 is due to an increased transfer from the Growth and Innovation Framework (GIF) Sector Project Fund and the GIF Industry Governed Bodies Fund. Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Facilitate and coordinate access to New Zealand by Meet the objectives Met Meet the objectives international and domestic large scale film productions to help outlined in the Film NZ outlined in the Film NZ New Zealand be one of the world’s best screen production funding agreement funding agreement destinations.
International Biotechnology Partnerships (M25)
Scope of Appropriation
Facilitation of joint ventures between Australia and New Zealand companies in biotechnology development, manufacturing and marketing.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 730 730 1,700
Reasons for Change in Appropriation The decrease in appropriation is due to $3.270 million of savings being given up in 2009/10 to fund the Economic Growth Agenda and Managed Funds domicile while $2.300 million was given up in 2010/11 for the Rugby World Cup leverage and legacy programmes.
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Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Development of collaborative partnerships in biotechnology 2-5 collaborative 2 collaborative 2-5 collaborative development, manufacturing and marketing between partnerships developed partnerships developed partnerships developed New Zealand and International companies. as at March 2010 (see Note 1)
Note 1 - This performance measure may be updated following a review of the fund’s objectives in 2010. Any changes to the measures will be published in the Supplementary Estimates for 2010/11. Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with Cabinet decisions.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Funding for Economic Growth Agenda and Managed 2009/10 (3,270) - - - - Funds Domicile work Funding for the NZ 2011 Office 2010/11 - (2,300) - - -
International Growth Fund (M25)
Scope of Appropriation
This appropriation is limited to support for high growth firms to undertake additional market development and business capability activities required for growth in new markets, that deliver benefits for both the firm and the wider New Zealand economy.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 9,838 9,838 30,027
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Reasons for Change in Appropriation The increase in appropriation is due to an increased transfer of $20.400 million from the Market Development Assistance Fund in 2010/11 offset by a transfer of an underspend to 2009/10 of $211,000. Note that this appropriation was previously the Growth Services Fund. Expected Results
2009/10 2010/11
Budgeted Estimated Actual Budget Standard Standard Standard
Firms receive grant funding as part of a wider assistance Up to 30 firms receive Up to 19 firms by 30 50-60 firms receive package. funding (see Note 1) June 2010 (see Note 1) funding (see Note 1) Client satisfaction with NZTE’s delivery of the International New measure in N/A 85% of survey Growth Fund. 2010/11 respondents are satisfied with NZTE’s delivery of the International Growth Fund (see Note 2) International Growth Fund grant applications are assessed and 100% adherence 100% adherence 100% adherence with processed in accordance with specified criteria and guidelines. specified criteria and guidelines. Compliance monitoring as specified in NZTE’s Agreement with Ministers
Note 1 - 2009/10 is the first year of operation of the International Growth Fund, with a lower initial appropriation of $9.838 million to allow time for the fund to be bedded in. The International Growth Fund is fully operational in 2010/11 and its appropriation increases to $30.027 million, funded from reprioritisation from the Market Development Assistance Fund and the Enterprise Development Fund. Note 2 - The survey is limited to respondents who have been invited to apply for the Fund. Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines.
Large Budget Screen Production Fund (M25)
Scope of Appropriation
Assistance to film and television productions that spend over $15 million in New Zealand.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 52,481 52,481 35,556
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Reasons for Change in Appropriation This is a demand-driven appropriation and the amount drawn down depends on the number of films that meet the criteria for funding in any given year. Note that $16.925 million was approved in the February Baseline Update for 2009/10 to meet anticipated demand. Expected Results
2009/10 2010/11
Budgeted Estimated Actual Budget Standard Standard Standard
International and domestic large scale film productions locate in At least 4 large scale 8 large scale At least 4 large scale New Zealand. productions located in productions productions located in New Zealand New Zealand
Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with Cabinet decisions.
Major Events Development Fund (M25)
Scope of Appropriation
Support for major events that provide economic, social, cultural and international profiling benefits to New Zealand.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 7,582 7,582 5,821
Reasons for Change in Appropriation The decrease in appropriation is due to a reduction in funding in 2010/11 of $461,000 related to the development of the Bid Programme and one-off funding of the Giant Rugby Ball Venue in Tokyo of $1.800 million in 2009/10 only. This is offset by a $500,000 transfer to departmental expenditure to fund the development and management of a volunteer recruitment website for events through to the end of 2011.
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Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Additional economic, social and cultural, and international Funding directed to 10 Funding directed to 12 Funding directed to 10 exposure benefits are leveraged from new and existing major to 15 major events to major events to achieve to 15 major events to events. achieve a portfolio of a portfolio of major achieve a portfolio of major events where events where 100% major events where 90% achieve additional achieve additional net 100% achieve net social, cultural or social, cultural or additional net social, economic benefits economic benefits cultural or economic benefits
Conditions on Use of Appropriation
Reference Conditions
N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with Cabinet decisions.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Continuation and Development of a Bid Programme. 2009/10 4,232 3,771 3,771 3,771 3,771
Baseline Savings 2009/10 (200) (200) (200) (200) (200) Rugby World Cup 2011 - Detailed Plan for Maximising 2009/10 2,500 2,500 - - - Benefits to New Zealand
Management Development Fund (M25)
Scope of Appropriation
Assistance to address the management capability gap in New Zealand, through the commissioning of research, stimulation of business interest and supply of management development services.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 361 298 756
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Reasons for Change in Appropriation The change to the appropriation for 2010/11 is due to a transfer of $395,000 in 2009/10 to the Regional and Industry Development Fund to fund commitments to Organics Aotearoa New Zealand. Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Implementation of coordinated initiatives that stimulate demand 2 to 4 initiatives 2 initiatives 2 to 4 initiatives for quality capability development services among firms in order report outcomes which to achieve sustained improvements in the market for contribute to overall management capability development services. capability development market improvements
Conditions on Use of Appropriation
Reference Conditions
N/A Grants and services are administered and made or delivered in accordance with government policy guidelines.
Promotion of New Zealand Associated with the America’s Cup (M25)
Scope of Appropriation
This appropriation is limited to meeting costs associated with the proposed sponsorship of Team New Zealand’s participation in the next multi-challenger America’s Cup.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 3,500 - 18,250
Reasons for Change in Appropriation An expense transfer has been approved for $18.250 million to 2010/11 reflecting the uncertainty as to when, and under what conditions, the next multi challenger America’s Cup will be staged. There was also a transfer in 2009/10 of $3.500 million for Support for the Louis Vuitton Trophy Series.
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Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Support the promotion of New Zealand associated Milestones met as per N/A Milestones met as per with participation at the next multi-challenger America’s Cup. funding agreements funding agreements
Regional and Industry Development Fund (M25)
Scope of Appropriation
Support of industry and regional specific projects that are likely to have the ability to contribute to government economic objectives and to unlock high growth potential, including support of Buy Kiwi Made sectoral and regional initiatives.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 1,030 1,030 600
Reasons for Change in Appropriation The $600,000 in 2010/11 is a late decision during the Budget 2010 process for funding to the Kiwi Expats Association (Kea) to build on the momentum gained through the previous three years’ government funding and assist Kea to achieve self-sufficiency. This has reopened this appropriation with related funding in 2011/12 and 2012/13. Expected Results
2009/10 2010/11
Budgeted Estimated Actual Budget Standard Standard Standard Funding agreement in place for Kea build on the momentum N/A N/A Achieved gained through the previous three years’ government funding and assist Kea to achieve self-sufficiency.
Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines, and in accordance with Cabinet decisions.
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Funding for Kiwi Expats Association 2010/11 - 600 400 200 - Previous Government Expanding the Beachheads Programme and leveraging 2007/08 630 - - - - the development of NZ’s international networks to support the development of globally competitive firms
Baseline Savings 2008/09 (1,644) (1,644) (1,644) (1,644) (1,644)
Establish Regional and Industry Development Fund 2005/06 1,644 1,644 1,644 1,644 1,644
Regional Partnerships and Facilitation (M25)
Scope of Appropriation
Provision of advice and grants to support the development of business incubators and regional clusters, and to support regional partnerships to develop and implement sustainable economic growth strategies.
Expenses 2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 18,379 11,819 8,613
Reasons for Change in Appropriation The decrease in appropriation is mainly due to the closure of the Regional Strategy Fund and the end of the Enterprise Auckland Fund appropriations in 2009/10, additional savings of $2.650 million given up in 2010/11 as part of the 2009 VFM exercise, and increased funding transferred to the Food Innovation Network NZ in 2010/11 of $3.115 million. Also there were transfers to fund the RWC office of $5.650 million and the Square Kilometre Array of $1 million offset by a rephasing of the appropriation from future years of $7.620 million. Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Provide funding for large-scale regional projects which at a local Milestones met as per Met Milestones met as per and regional level support development attraction and retention funding agreements funding agreements of productive firms and globally competitive firms.
Number of incubators funded. 8 8 8 incubators funded Number if high growth exits achieved by the incubator network 20 20 20-25 exits (see Note 1).
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Note 1 - A high growth exit occurs when a company leaves the incubator with the following characteristics: is globally ambitious, has a well-thought out and executable business plan; has a thorough understanding of their target market; has a strong and experienced management team, has a good independent governance. Conditions on Use of Appropriation
Reference Conditions
N/A Grants and services are administered and made or delivered in accordance with government policy guidelines.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Contribution to the Establishment of the Productivity 2010/11 - (48) (94) (100) (100) Commission
Food Innovation Network 2009/10 (3,000) (6,115) (5,360) (950) (780) Square Kilometre Array 2010/11 - (1,000) (700) (700) (600)
Funding for the NZ 2011 Office 2010/11 - (5,650) - - - Savings 2008/09 (800) (3,450) (3,450) (3,450) (3,450)
Rugby World Cup Free-to-Air Broadcasting Right (M79)
Scope of Appropriation
This appropriation is limited to meeting the government contribution to the joint bid by the Māori Television Service, Television New Zealand and Mediaworks for the Rugby World Cup free-to-air broadcasting right.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 640 640 1,600
Reasons for Change in Appropriation Government contribution to the joint bid for the Rugby World Cup free-to-air broadcasting right. This appropriation was established as a new other expense under Non-Departmental Other Expenses effective from 2009/10.
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Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Successful completion of joint bid between Māori Television Met Met Met Service, Television New Zealand and Mediaworks for the Rugby World Cup free-to-air broadcasting rights.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
RWC Free-to-Air Broadcasting Rights 2009/10 640 1,600 960 - -
Rugby World Cup Leverage and Legacy Programmes (M25)
Scope of Appropriation and Expenses
Type, Title, Scope and Period of Appropriations Appropriations, Adjustments and Use $000
Rugby World Cup Leverage and Legacy Programmes (M25) Original Appropriation 11,250
This appropriation is limited to the provision of Rugby World Cup leverage and Adjustments to 2008/09 - legacy programmes (both offshore and onshore). Adjustments for 2009/10 - Commences: 1 July 2010 Adjusted Appropriation 11,250
Expires: 30 June 2012 Actual to 2008/09 Year End - Estimated Actual for 2009/10 - Estimated Actual for 2010/11 3,300
Estimated Appropriation Remaining 7,950
Reasons for Change in Appropriation The appropriation was established as a new other expense under Non-Departmental Other Expenses, effective from 1 July 2010. Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
The profile of Rugby World Cup Leverage programmes is raised N/A N/A RWC events are in key offshore markets. successfully completed in 5 offshore markets
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2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Opportunities for New Zealanders to participate in the N/A N/A 90% adherence to tournament are increased. Volunteer and Festival programme participation targets and milestones
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000
Current Government Funding for the NZ 2011 Office 2010/11 - 3,300 7,950 - -
Sector Strategies and Facilitation (M25)
Scope of Appropriation
Assistance with the facilitation of specific sector initiatives, particularly in the areas of major events, pre- feasibility and feasibility studies and guarantees for significant projects to access funding through other government programmes and cash grants.
Expenses
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 1,500 1,500 1,204
Reasons for Change in Appropriation The decrease in appropriation is due to $2.014 million being transferred to fund the Market Development Assistance Fund in 2010/11 (since transferred to the International Growth Fund) offset by transfers to Transformational Initiative Projects of $560,000 in 2009/10 and to the New Zealand Innovation Centre for the Business case and Proposed Support of $1.158 million in 2009/10 (since given up as savings). Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Number of grants awarded. 4-6 4-6 4-6
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Conditions on Use of Appropriation
Reference Conditions N/A Grants and services are administered and made or delivered in accordance with government policy guidelines.
Square Kilometre Array (M25)
Scope of Appropriation
This appropriation is limited to supporting New Zealand’s contribution to the joint bid with Australia to host the Square Kilometre Array.
Expenses
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation - - 1,000
Reasons for Change in Appropriation The appropriation was established as a new other expense under Non-Departmental Output Expenses, effective from 1 July 2010. The funding was transferred from the Regional Partnerships and Facilitation Appropriation. Expected Results
2009/10 2010/11 Budgeted Estimated Actual Budget Standard Standard Standard
Comprehensive joint international strategy promoting the N/A N/A New Zealand Australia and New Zealand bid fully implemented (over the participates in activities period leading up to the siting decision, expected in 2012. and events promoting the joint bid as outlined in the strategy
New Zealand undertakes the necessary preparation to host the N/A N/A New Zealand identifies SKA, demonstrating that we have viable locations and potential feasible sites infrastructure. by 2012, including infrastructure
New Zealand builds its capability to benefit from participation in N/A N/A New Zealand capability the SKA project, including our capability in science and industry. is identified, action plans are developed and implemented
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Square Kilometre Array 2010/11 - 1,000 700 700 600
Transformational Initiatives Fund (M25)
Scope of Appropriation and Expenses
Type, Title, Scope and Period of Appropriations Appropriations, Adjustments and Use $000
Transformational Initiatives Fund (M25) Original Appropriation 9,766
Funding for the implementation of policy on transformational initiatives as Adjustments to 2008/09 - agreed by Cabinet. Adjustments for 2009/10 520 Commences: 1 March 2009 Adjusted Appropriation 10,286
Expires: 30 June 2013 Actual to 2008/09 Year End - Estimated Actual for 2009/10 -
Estimated Actual for 2010/11 4,520 Estimated Appropriation Remaining 5,766
Reasons for Change in Appropriation The appropriation was established effective from 1 July 2009. Note there was a transfer in, of $2.520 million for the Economic Growth Agenda and a transfer out of $2 million for the establishment and operation of the Food Innovation Network New Zealand. Expected Results 2009/10 2010/11
Budgeted Estimated Actual Budget Standard Standard Standard
Assessment of small number of large scale economic 23 2 development opportunities in accordance with TI methodology and criteria.
Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Current Government
Funding for Economic Growth Agenda and Managed 2010/11 - 2,520 - - - Funds Domicile work Food Innovation Network 2009/10 (2,000) - - - -
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Reporting Mechanisms
Appropriation Reporting Mechanism Establishment and operation of the Food Innovation Network New Zealand Annual Report - MED
Film New Zealand Annual Report - MED International Biotechnology Partnerships Annual Report - NZTE
International Growth Fund Annual Report - NZTE Large Budget Screen Production Fund Annual Report - MED
Major Events Development Fund Annual Report - MED Management Development Fund Annual Report - MED
Promotion of New Zealand Associated with the America’s Cup Annual Report - MED Regional and Industry Development Fund Annual Report - MED Regional Partnerships and Facilitation Annual Report - MED and NZTE
Rugby World Cup Free-to-Air Broadcasting Right Annual Report - MED Rugby World Cup Leverage and Legacy Programmes Annual Report - MED
Sector Strategies and Facilitation Annual Report - NZTE Square Kilometre Array Annual Report - MED
Transformational Initiatives Fund Annual Report - MED
The above table indicates the mechanisms to be used for reporting actual performance for each non- departmental other expenses appropriation.
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Part 6 - Details and Expected Results for Capital Expenditure
Part 6.1 - Departmental Capital Expenditure
Intended Impacts, Outcomes and Objectives
Intended Impacts, Outcomes or Objectives of Appropriations Appropriations
• Internally funded capital projects integral to the delivery of the Ministry’s strategic objectives. Ministry of Economic Development - Capital Expenditure • Implementation and operation of administration of the New Zealand Emissions Trading Scheme - (NZETS). • To establish the new base regulatory infrastructure for the financial sector ie, a register of all financial service providers, the establishment of a central dispute resolution body, and the authorisation and supervision of Approved Professional Bodies (APBs) to co-regulate financial advisers - (Financial Regulation Infrastructure). • Project governance and methodology successfully used for the creation of other registers within the Ministry would be adopted. The project steering committee will use external QA and a project manager will be contracted who will use industry standard project management methodology. The project performance will be measured at predetermined junctures in terms of timeliness and budget against the plan and in terms of the quality of the software for each module delivered - (Enterprise Project). • Implement a package of interlinked initiatives to strengthen the infrastructure and support high quality regulation, growth and innovation. Initiatives include a Regulators Forum, Contestable Fund, information clearing house, sector advisory boards and wider participation in standards development - (Standards and Conformance Infrastructure Review). • The Intellectual Property Registry System will facilitate enhanced service to IP rights holders by providing a full suite of on-line services by which registered IP can be applied for and maintained. This will make it easier for IP rights holders to transact directly with the office in relation to non- complex transactions, thereby potentially reducing their overall costs of maintaining their registered IP rights - (Intellectual Property Electronic Registry System (Eclipse)).
Ministry of Economic Development - Capital Expenditure PLA (M25)
Scope of Appropriation
This appropriation is limited to the purchase or development of assets by and for the use of the Ministry of Economic Development, as authorised by section 24(1) of the Public Finance Act 1989.
Capital Expenditure
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Forests/Agricultural - - - Land - - -
Property, Plant and Equipment 4,700 1,898 3,500 Intangibles 16,056 11,450 1,900
Other (108) (108) - Total Appropriation 20,648 13,240 5,400
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Reasons for Change in Appropriation The decrease in appropriation is due to Departmental Capital transfers from 2008/09 to 2009/10 for the New Zealand Emissions Trading Scheme ($4.006 million), Enterprise Project ($3 million), Eclipse Project ($1 million), Financial Regulation Infrastructure ($1.500 million) and the Web Based Regulatory Requirements Clearing House ($50,000) and a decreased forecast of capital expenditure for 2010/11 of $6.700 million offset by a return of savings in 2009/10 from the development of the Electronic Register for Financial Service Providers of $900,000 and a Departmental Capital transfer of $108,000 for funding the Identity Verification Service in 2009/10.
Part 6.2 - Non-Departmental Capital Expenditure
Intended Impacts, Outcomes and Objectives
Intended Impacts, Outcomes or Objectives of Appropriations Appropriations
The firms that NZTE works with grow faster, are more successful internationally and deliver higher New Zealand Trade and Enterprise economic benefit to New Zealand. The New Zealand sectors NZTE works with are stronger and better able to compete internationally.
Improved business access to capital Seed Co-investment Fund • New Zealand firms can access early stage equity for growth.
Improved business access to capital Venture Investment Fund • New Zealand firms can access early stage equity for growth.
New Zealand Trade and Enterprise (M25)
Scope of Appropriation
To increase NZTE’s in-market assistance for New Zealand firms in China, India and Japan.
Capital Expenditure
2009/10 2010/11
Budgeted Estimated Actual Budget $000 $000 $000 Total Appropriation 4,045 598 147
Reasons for Change in Appropriation The decrease in appropriation is due to a one-off capital transfer to 2009/10 of $3.921 million due to the delay of the Asia Strategy Expansion Project - New Concept Centre in Shanghai offset by an increase in New Zealand Trade and Enterprise Capital Expenditure in China, India and Japan of $23,000 as phased in the 2007 Budget.
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Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Previous Government
In-market assistance for New Zealand firms in China, 2007/08 124 147 172 172 172 India and Japan.
Seed Co-investment Fund (M25)
Scope of Appropriation
Support the development of the market for early stage equity finance.
Capital Expenditure
2009/10 2010/11 Budgeted Estimated Actual Budget $000 $000 $000
Total Appropriation 20,487 3,000 8,000
Reasons for Change in Appropriation The decrease in appropriation is a direct result of an expense transfer of $10.529 million from 2008/09 into 2009/10 due to delays in approving networks for funding of new investments and an adjustment of $1.958 million made to correct a prior year error. Current and Past Policy Initiatives
Year of 2009/10 2010/11 2011/12 2012/13 2013/14 First Budgeted Budget Estimated Estimated Estimated Policy Initiative Impact $000 $000 $000 $000 $000 Previous Government
Establish a Co-investment Programme to Assist 2005/06 8,000 8,000 - - - Development of the Market for Early Stage Equity Finance.
Reporting Mechanisms
Appropriation Reporting Mechanism
New Zealand Trade and Enterprise Annual Report NZTE Seed Co-investment Fund Annual Report of NZVIF Limited
The above table indicates the mechanisms to be used for reporting actual results for each non- departmental capital expenditure appropriation.
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