The Business Growth Agenda Future Direction 2014 ISBN 978-0-478-43311-1 Online ISBN 978-0-478-43306-7 Hardcopy CROWN COPYRIGHT © 2014 This work is licensed under the Creative Commons Attribution 3.0 New Zealand licence. In essence, you are free to copy, distribute and adapt the work, as long as you attribute the work to the Crown and abide by the other licence terms. To view a copy of this licence, visit http://creativecommons.org/ licenses/by/3.0/nz/. Please note that no departmental or governmental emblem, logo or Coat of Arms may be used in any way which infringes any provision of the Flags, Emblems, and Names Protection Act 1981. Attribution to the Crown should be in written form and not by reproduction of any such emblem, logo or Coat of Arms. Ministers’ Foreword Export Markets Group of Ministers: Rt Hon John Key We are pleased to present this report setting out Hon Bill English our progress on, and the future direction for, our Hon Steven Joyce Hon Murray McCully Business Growth Agenda. Hon Tim Groser Hon Nathan Guy Between late 2012 and early 2013, we published six reports setting out an ambitious work Hon Craig Foss programme, focusing on the six key inputs businesses need to succeed, grow and add Hon Nicky Wagner jobs: export markets, capital markets, innovation, skilled and safe workplaces, natural Hon Dr Pita Sharples resources and infrastructure. This Business Growth Agenda (BGA) aims to build a more Capital Markets Group of Ministers: productive and competitive economy by building business confidence, and addressing Hon Bill English the issues that matter to firms. Hon Steven Joyce Since that time, we have made significant progress across all six areas. More than half of Hon Tony Ryall the more than 350 BGA actions are complete or being implemented. Hon Craig Foss At the same time, we have continued to create a business environment that has delivered Innovation Group of Ministers: more jobs, higher business investment and higher wages for New Zealanders. Over the Hon Steven Joyce past year, the economy has shown considerable momentum, with growth of around four Hon Nathan Guy per cent per annum in the second half of 2013. Employment and wages also continued Hon Craig Foss to grow in the second half of 2013, with unemployment falling to six per cent in the Hon Amy Adams December quarter. Skilled and Safe Workplaces Group This report summarises the significant achievements New Zealand has made to date. of Ministers: Hon Steven Joyce Looking ahead, the economy is expected to grow strongly over the next year and to Hon Judith Collins perform better than many other major advanced economies. However, we will continue Hon Hekia Parata to face a number of issues, including ongoing uncertainty in international markets and Hon Paula Bennett a high New Zealand dollar - reflecting the underlying strength of the New Zealand economy. Hon Simon Bridges Hon Michael Woodhouse We now have the opportunity to encourage more businesses to build a global presence Hon Dr Pita Sharples and take advantage of the increasing demand for New Zealand products being created Hon Tariana Turia by a rapidly-emerging middle class in Asian and in other markets. Natural Resources Group of Ministers: The challenge for the BGA now is to reduce capacity constraints in the New Zealand Hon Steven Joyce economy and convert a couple of years of good growth into a sustained long-term lift in Hon Paula Bennett our growth rate, providing stronger incomes for Kiwis and their families. Hon Nick Smith In the light of our progress, we now intend to focus our future efforts on a smaller number Hon Tim Groser of areas we see as particularly critical to building business confidence and growth – while Hon Amy Adams continuing to deliver on our existing work programme. Hon Nathan Guy Hon Simon Bridges This report therefore sets out our future approach in relation to each of the six key Hon Dr Pita Sharples inputs, including a number of key priorities we are committed to delivering over the next Hon Peseta Sam Lotu-Iiga few years. Infrastructure Group of Ministers: We appreciate your feedback on New Zealand’s Business Growth Agenda, and encourage Hon Bill English you to continue to provide your views on what matters for business success and growth. Hon Gerry Brownlee Hon Steven Joyce Hon Paula Bennett Hon Nick Smith Hon Amy Adams Hon Nathan Guy Hon Simon Bridges Hon Bill English Hon Steven Joyce MINISTER OF FINANCE MINISTER FOR ECONOMIC DEVELOPMENT The Business Growth Agenda Growing competitive businesses creates jobs and increases It is businesses that drive exports to the world. Nothing creates sustainable, high-paying economic growth and build jobs and boosts our standard of living better than business confidence and growth. a more successful economy with more jobs for Kiwis. Building a more competitive and productive economy for New Zealand is one of the key priorities the Prime Minister has laid out for this Government to achieve. The Business Growth Agenda will drive this by ensuring the Government stays focused on what matters to business, to encourage confidence and further investment. There are six key inputs that businesses need to succeed and grow. By focusing on these inputs we will ensure businesses have the opportunity to lead economic growth. The six key areas in the Business Growth Agenda are: Export markets Infrastructure Capital markets Natural Innovation resources Skilled and safe workplaces The Government is holding itself accountable to the business community and to the public to achieve tangible progress in each of these areas. The Ministry of Business, Innovation and Employment and the Treasury are working alongside other agencies to coordinate the Business Growth Agenda and ensure businesses can more easily access the advice and support from government agencies they need to be successful. Contents Progress Highlights 6 Introduction 9 Economic Context 10 Building Export Markets 11 Building Capital Markets 29 Building Innovation 44 Building Skilled and Safe Workplaces 63 Building Natural Resources 81 Building Infrastructure 98 Progress on Cross-Cutting Themes 122 Regions and Sectors 125 Progress Highlights Export markets Capital markets Of the 55 actions included in the August 2012 Building Export Of the 50 actions included in the February 2013 Building Capital Markets progress report, just under half have now been Markets progress report, half have now been completed and completed and substantive work is underway for all of the substantive work is underway for all of the other actions. Key other actions. Key achievements in this area include: achievements in this area include: • further progress on our FTA agenda, with negotiations on • successful completion of the Government Share Offer the Trans-Pacific Partnership and with Korea at advanced programme, with the float of Genesis Energy earlier this year stages, negotiations continuing with India and the Regional • continuing implementation of the Financial Markets Conduct Comprehensive Economic Partnership with ASEAN and Act 2013, including improvements to employee share its FTA partner countries, and an agreement on economic schemes, and the clarification and widening of disclosure cooperation concluded with Chinese Taipei exemptions for investors in early-stage and private companies • steady growth in the use of New Zealand Story assets since • the passing of the Financial Reporting Act, which will remove launching in 2013 the requirement for small and medium-sized companies to produce complex financial statements • a total of 60 trade missions led by the Government since the • the passing of the Housing Accords and Special Housing Areas beginning of 2012 Act 2013 along with other measures aimed at improving the • strong uptake of NZTE’s new Better by Capital service, operation of the housing market designed to help New Zealand businesses access capital to • the launch by the Commission for Financial Literacy and fund their international growth Retirement Income of an online tool that allows New • establishment of Education New Zealand in September 2011. Zealanders to compare different KiwiSaver funds, using improved disclosure information produced as a result of We will continue to work to complete these actions, while new KiwiSaver disclosure regulations. particularly focusing our efforts on a smaller number of areas We will continue to work to complete these actions, while critical to building New Zealand’s export markets: particularly focusing our efforts on a smaller number of • negotiating comprehensive, high-quality FTAs and areas critical to building New Zealand’s capital markets: implementing existing FTAs • rebuilding our financial reserves and focusing on efficient management of our operating balance once we have returned • providing NZTE with more resources to assist more to surplus in 2014/15 companies • establishing the NZTE Regional Investment Attraction • boosting our representation in China programme to identify regional investment opportunities • increasing our representation in other emerging markets and develop a compelling ‘pitch’ for potential investors • implementing the Financial Markets Conduct Act • promoting the procurement of New Zealand capital goods and services with New Zealand’s Export Credit Office • strengthening consumer credit laws by implementing the Credit Contracts and Financial Services Law Reform Bill • conducting fit-for-purpose checks on market-facing regulatory • creating opportunities for new and innovative forms of regimes capital raising by