Hon Jim Anderton
Deputy Prime Minister
Minister for Economic Development

15 June 2000

Boost for industry and regions

Budget 2000 is aimed at broadening and adding knowledge to New Zealand's economic base and at revitalising the regions, Deputy Prime Minister and Minister for Economic Development, Jim Anderton, says.

"For too long, governments have neglected regional and industry development, allowed skills levels to fall behind other developed countries and neglected the knowledge economy. This Government will work in partnership with business, local government and local communities to turn that around.

"The Budget provides new funding of $331.875 million over the next four years for industry and regional development. To make New Zealand stronger, we need to make the regions stronger and to grow the export sector," Mr Anderton said.

The Budget allocates funding for industry and regional development of $33.750 million in Year One; $73.125 million in Year Two and $112.5 million for each of the following two years.

The money will support a range of advice and practical assistance programmes, including a strategic investment service, early stage financing assistance and enterprise education building.

 Industry New Zealand will employ industry specialists to identify firms or groups of firms with significant growth potential. Specialist grants will be available to help firms employ the services they need to develop. Funding will be around $6 million in the 2000/01 financial year for this purpose.

 Industry New Zealand will work with TradeNZ to encourage investment within New Zealand. Funding will be around $5 million in the 2000/01 year.

 A national database will match 'investment angels' with investment opportunities.

 Early stage financing: Funding for early stage projects will include market research, protection of intellectual property rights and commercialising ideas to enable budding entrepreneurs with innovative concepts to realise their commercial potential. The level of assistance will be assessed case by case and will not exceed $50,000 at one time. Funding allocated for 2000/01 will be around $5 million.

"Industry New Zealand's capacity will be built up over the next twelve months and further initiatives developed. These will include a programme to support environmentally sustainable development," Jim Anderton said.

"In conjunction with our industry development strategy, the Government will run a regional development strategy aimed at resuscitating the regions.

"We will not pretend we know all the answers. Instead we will take a bottom-up approach, working with local communities to assist them make best use of the assets and advantages their region possesses."

Up to $2 million will be available for major regional or community initiatives. To qualify, an initiative must involve a number of community groups, emerge from an inclusive regional development process and have local funding of at least 25 percent of total cost. It will also have to be sustainable and consistent with the Government's policies.

Funding of up to $100,000 will be available for any single strategic planning or audit initiative in any single region. Regions must provide at least 30 percent of the total cost in cash or kind.

To ensure continuing improvement in the Government's policy approach to economic development, the Ministry of Economic Development will receive an additional $3.375 million a yearfor policy advice and development.

"Where previous governments made a virtue of remaining on the sidelines and letting promising business ideas fail through lack of support, this Government is committed to taking an active leadership role in the economy," Mr Anderton said.

© Scoop Media