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Coalition Govt launches its 'jobs machine'

Media release and Q& A

News release

Tuesday, 29 February 2000

Coalition Govt launches its 'jobs machine'
Underway inside the first hundred days

Pre-election commitments of the Alliance and Labour to create jobs through a partnership approach to economic development were set in motion today.

The Ministry of Commerce is to be transformed immediately into the Ministry for Economic Development headed by Deputy Prime Minister Jim Anderton. Industry New Zealand will be set up and functioning by mid-year as a model Crown entity to enter partnerships with local government and the private sector at national, regional and local levels.

"The era of 'hands-off' is over. The era of partnership has begun," Jim Anderton said.

"The Government will work with the private sector, local authorities, Maori economic entities and community groups to meet economic, environmental and social needs at national, regional and local levels," Jim Anderton said.

"We need stronger and steadier growth, more jobs and new environmentally sustainable high-technology industries ? especially in regional areas.

"Both the Alliance and Labour placed a heavy emphasis on a partnership-based approach to economic development. Our aim is to reduce unemployment, boost skills to ensure New Zealand generates high-quality jobs, reduce the current account deficit and close the gaps between Maori and pakeha, between rich and poor and between regional areas."

Jim Anderton said the Government was taking an innovative approach which would be inclusive of local community needs and aspirations.

"Industry New Zealand will be a model Crown entity. The law will be changed to set it up under its own board, but clearly accountable to the people and the Government they elected.

"The transformation of the Ministry of Commerce into the Ministry of Economic Development is the lowest-cost way to ensure that we expand the public sector's ability to provide a new dimension of developmental economic policy advice and direction. We are not going to waste time or money re-inventing a whole new Department. The new Ministry of Economic Development will continue to provide service to six different Ministers.

"We're setting up a jobs machine. The test of our success will be our achievements in creating new jobs, developing new industries and reversing the cycle of decline in regional areas of New Zealand."


Question and answers

Ministry of Economic Development

Questions and Answers

When will the Ministry of Economic Development and Industry New Zealand be set up?

The Ministry of Commerce will start using the name "Ministry of Economic Development" immediately.

Industry New Zealand will be established under new legislation by the middle of the year.

What will the Ministry of Economic Development do?

In addition to the responsibilities currently performed by the Ministry of Commerce, the Ministry of Economic Development will provide policy advice and direction in industry and regional development and on other matters relevant to economic development. Its capabilities will be expanded to meet its new responsibilities.

The Economic Development portfolio will have an over-arching role in economic development strategy, aligning individual policies with an economic development strategy and assessing the contribution new policies could make in assisting economic development.

What will Industry New Zealand do?

Industry New Zealand will deliver industry and regional development programmes. Its brief will be to work in partnership with the private sector, local authorities, Maori economic entities and community groups to meet economic, environmental and social needs at national, regional and local levels.

Who will run them?

The Secretary of Commerce Paul Carpinter will retain that title for the time being as well as becoming the Chief Executive of the Ministry of Economic Development. Deputy Prime Minister Jim Anderton will become the Responsible Minister.

Hon Pete Hodgson, Hon Phillida Bunkle and Hon Parekura Horomia are all Associate Ministers of Economic Development and John Wright is the Parliamentary Undersecretary for Economic Development.

At the moment, Commerce reports to six different Ministers. As the new Ministry of Economic Development it will continue to report to those Ministers for the same policy issues. For example, the Ministry will continue to report to Commerce Minister Hon Paul Swain on commerce issues.

Industry New Zealand will be run by a Board drawn primarily, though not exclusively, from the private sector. It will be a Crown entity. Its legislation will ensure that its programmes are delivered efficiently and effectively and that it is accountable to the public through the Minister for Economic Development. Its policy will be determined by the Ministry of Economic Development and while the Board and the CEO of Industry New Zealand will have operational independence, the Minister will have authority to give directions to the Board. The Board will report to the Minister for Economic Development.

The Board and a new Chief Executive of Industry New Zealand will be appointed swiftly.

Will there be job losses?

The capacity of the ministry will be expanded to fulfil its new functions. The policy role of some people will change. Some staff may transfer across to Industry New Zealand.

What will this cost?

Detailed budgets have not yet been completed, but the coalition Government will be providing new investment of over $100 million each year in its Economic, Industry and Regional Development portfolios. The transformation of the Ministry of Commerce into the Ministry of Economic Development is the lowest cost option. For example, Commerce only keeps about six weeks of letterhead. Its existing stock will be run out while new stock is developed.

Preliminary policy advice and support to design and implement the new arrangements will be funded through Vote Business Development.

The Government will not fund a substantial re-branding exercise.

Industry New Zealand will be allocated funding in the Government's 2000 Budget.

The Government currently spends more than $200 million a year on business development and support, of which $15.7 million comes under Business Development.

Why change the name of the Ministry of Commerce?

The Ministry is undergoing more than a name change. It will provide a new dimension of developmental economic policy advice and direction. It will have a new, over-arching role in advising on Government policy across a range of ministerial portfolios so that policy works in an integrated, coherent way. It will provide advice to the Minister for Economic Development, Cabinet and to government agencies responsible for implementing economic development strategies.

Where will the new Ministry be based?

In the existing Ministry of Commerce building.


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