Future Direction Progress To Date

Government’s Strategic Priorities Delivering better public services within tight financial constraints Responsibly managing the Government’s finances Rebuilding Christchurch Building a more productive and competitive economy Investment Context for the Business Growth Agenda Regional Development Regulatory Reform Māori Economic Development Export Markets Innovation Skilled & Safe Workplaces Infrastructure Natural Resources Investment Business Growth Agenda Cross-cutting themes

The 2015 Future Direction report will contain: Export Markets Innovation Skilled & Safe Workplaces Infrastructure Natural Resources Investment The Business Growth Agenda: Provides a platform for ongoing communication between businesses and government on the Government’s economic work plan Sets ambitious targets to focus the direction of the Government’s work Holds government agencies to account for delivery of work The areas the Government is focussing on The state of play for each area A high-level goal for each area Detail on the actions being taken A list of progress indicators Purpose of the BGA A vision for economic success

1.A market based economy that reflects Kiwi attributes – agile, resourceful, innovative and world-beating 2.Our businesses add greater value to their goods and services – attracting a premium from our natural resources, intellectual edge and industry know-how 3.We are more internationally connected to reduce the impacts of distance, and seen as a real hub of talent and ideas for the Asia-Pacific region 4.An economy where all regions and our people have the opportunity to grow and prosper 5.We are one of the most highly-skilled countries in the world, with ambitious business leaders who make the best of our diversity of talents and ideas An economy like this will grow our productivity and our incomes, and deliver real and ongoing improvements in the quality of life for all New Zealanders. What would a successful New Zealand economy look like in 2025?

We will attract high-quality investment into all parts of New Zealand We will grow exports, by developing businesses that are internationally connected and able to add value to volume and seize opportunities in an Asia-Pacific centred world We will develop New Zealand as a hub for high-value, knowledge-intensive businesses conducting more R & D to lift innovation We will have skilled and safe workplaces, where all our people are equipped with the skills to participate and succeed in our 21 st century economy and society In the natural resources area, we will improve the productivity of our resource-related industries while reducing their environmental impact We will provide the right infrastructure at the right time to support future investment, growth and quality of life To achieve this vision, we need to take action in a range of areas

Building export markets: creating businesses that are internationally connected and able to add value to volume and seize opportunities in an Asia-Pacific centred world Export Markets Signing of the Korea-New Zealand FTA Increasing the number of companies intensively serviced by NZTE to a total of 612 Increasing exports with Taiwan by over 15 per cent Agreement to explore an upgrade of the China-New Zealand FTA Accession to the WTO Government Procurement Agreement, Significant growth in the international education industry to a total value of $2.85 billion Significant growth in tourism to a total exceeding $8 billion for the first time Increasing New Zealand’s footprint in the ASEAN region ICT exports have increased in value by $384 million since 2010 Concluding an Air Services Agreement with India Continuing to roll out Trade Single Window Ongoing integration of the NZ Story Creating Seafood and Wine versions of the NZ Story Target to “Increase the ratio of exports to GDP to 40% by 2025”

Building Investment: attracting high-quality investment into all parts of New Zealand Target to “Significantly lift the rate of business investment as a percentage of GDP, with an emphasis on attracting capital that generates economic growth, creates high-value jobs and builds resilience in regions” Investment Overhauling our financial markets legislation Facilitating the establishment of new public growth markets Bringing the Limited Partnerships Amendment Act and Companies Amendment Act into force Supporting the development of new sources of capital Strengthening our consumer credit laws Making solid progress on developing the Asia Region Managed Funds Passport Ongoing progress on NZTE’s Regional Investment Attraction Programme Making progress on returning to surplus and on repaying debt

Building Innovation: developing New Zealand as a hub for high-value, knowledge-intensive businesses conducting more R&D to lift innovation Target to “Create the right business environment and incentives to encourage New Zealand’s business sector to increase its expenditure on R&D to 1% of GDP” Innovation Increasing funding for Business R&D Growth Grants by $20 million a year Supporting 493 high-tech firms to increase their investment in R&D through R&D Growth Grants, Technology Development Grants and Project Grants Supporting high-tech start-ups to develop and commercialise IP through the new incubators and repayable grants programmes Officially opening GreenHouse (Christchurch’s new innovation hub) in June 2015 Implementing legislation for cashing out R&D tax losses, to ensure the tax system does not discourage R&D Working towards the establishment of ICT graduate schools in Auckland, Wellington and Christchurch. Continued to implement the National Science Challenges, launching five National Science Challenges in 2014/15 bringing the total to six.

Building Safe and Skilled Workplaces: equipping all our people with the skills to participate and succeed in our 21 st century economy and society Target to “Materially lift New Zealand’s long-run productivity growth rate while maintaining our high rate of labour force participation” Skilled & Safe Workplaces In 2014 the proportion of year-olds with NZQF Level 4 or higher qualifications was 54.9 per cent, up from 52.6% in 2012 Establishment of the first 11 Communities of Schools and the implementation of the Principals Recruitment Allowance, to raise quality teaching and leadership in our schools Increasing our investment in apprenticeships Targeting intensive services to those clients identified as having the highest future liability, as part of the investment approach to welfare Holding four job fairs in Perth, Melbourne, Sydney and Brisbane Enabling the supply of the skills needed for the Canterbury rebuild, through the Canterbury Skills Shortage List, the Canterbury Skills and Employment Hub, and the Skills for Canterbury package. Enactment of the Employment Relations Amendment Act in March 2015 Increasing the size of the Labour Inspectorate

Building Natural Resources: improving the productivity of our resource- related industries while reducing their environmental impact Target that “The quality of our natural resource base improves over time while sustaining the growth needed from key sectors to meet our 40% exports to GDP target” Natural Resources Annual merchandise exports Source: Statistics NZ, Ministry of Primary Industries ($ billions, year ending June) Publication of the Guide to Section 32 of the Resource Management Act Changes to the resource consent process Releasing the amended National Policy Statement for Freshwater Ongoing work to strengthen the biosecurity system Working with a range of partners on programmes to increase productivity and reduce carbon emissions Publishing growth studies for Northland, Bay of Plenty and Manawatu–Whanganui Development of the Māori Agribusiness Pathway. Establishing the Te Mana o Te Wai Fund (in partnership with the Māori Party) Introducing the Environmental Reporting Bill Implementing a new framework to sustainably manage New Zealand’s Exclusive Economic Zone (EEZ) and continental shelf Amending the Local Government Act to require local authorities to operate more effectively and efficiently Forging innovative public-private partnerships with leading businesses for conservation projects Investment of $8 million over four years in pre-commercial petroleum and minerals exploration data acquisition projects.

Building Infrastructure: Providing the right infrastructure, at the right time to support future investment, growth, and quality of life Infrastructure Target that “By 2030 New Zealand’s infrastructure is resilient and coordinated and contributes to economic growth and increased quality of life.” The deployment of ultra-fast broadband Strong progress in strengthening our roading network The electrification of Auckland’s metro rail network Establishing a total of 100 Special Housing Areas across New Zealand Securing a sale and development agreement to construct 237 homes in Christchurch Removing regulatory barriers that drive up costs of construction Major progress on the rebuild of Christchurch 34,000 homes insulated through the Warm Up New Zealand: Healthy Homes initiative. Largely completing $5 billion of investment in the national electricity grid Driving better social housing outcomes UFB Rollout as at June 2015