19 May 2005

Hon Jim Anderton

Minister for Economic Development Minister for Industry and Regional Development

Building capability into the economy Budget 2005 confirms the Labour-Progressive Government’s commitment to building a sustainable and inclusive economy, capable of continued growth, for the benefit of all New Zealanders, Economic Development Minister Jim Anderton said today.

"Budget decisions in economic, industry and regional development are very much about building on the foundations we started laying in 2000 when the government began re-engaging with business and regions in a way we hadn’t seen in this country for close to 20 years," Jim Anderton said.

Total investment in Vote Economic, Industry and Regional Development is now close to $250 million – $235 million of that on services and /or grants and awards to firms, sectors and regions. The balance goes on policy advice and on building public sector knowledge and expertise in key regional and economic development issues in such areas as small business, infrastructure and Auckland.

Jim Anderton said Budget 2005 supports building management and business capability with a new allocation, from the Growth and Innovation Framework budget package, of $10.5 million over four years.

Half of the funding will be used by Project Collaboration, a public/private initiative to ensure management and business skills training meets the needs of New Zealand business. The remainder will go to mentoring services for small business and the development of SME advisory boards as recommended by the Small Business Advisory Group.

"Management and business capability are the foundations of successful firms. Improved business performance that leads to more productive firms is a key driver of sustainable economic growth and improved living standards for all New Zealanders.

"The government’s commitment to improving business performance is shared by the private organisations involved in Project Collaboration. By working with private sector suppliers of management and business capability development services, we can promote greater alignment to business needs than by working alone," Jim Anderton said.

Other significant funding in 2005-06 includes:

$58.4 million for regional and sectoral development – including strategic work such as that being done by the Food and Beverage Taskforce, support for business clusters and incubators, and the development of networks and partnerships between and among regions, sectors and clusters of businesses and government; $56.6 million over three years to provide advice and help to the country’s regional partnerships in identifying, producing and implementing sustainable economic development strategies for their regions;

$30.7 million for promoting New Zealand businesses, their products and services, within New Zealand and internationally, to support the development of international trade and to attract new high-quality investment;

$25 million for business information, training and advice and grants with a particular focus on entrepreneurs, start ups, small businesses and new exporters; $62 million in services and grants for fast-growing businesses; $35.6 million for the large budget screen production fund;

$3 million to support major events with the potential to provide international profiling opportunities for New Zealand; An $844 000 contribution to the running of the industry bodies established in the biotechnology, ICT, screen production and design sectors and a further $1.3 million for specific projects within those sectors; A $6.1 million Market Development Assistance scheme for encouraging the integration of New Zealand businesses into global markets.

ENDS

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