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IT Minister Queries E-Business Rankings

Information Technology Minister Paul Swain has taken issue with a report ranking New Zealand at 20th in the world in terms of e-readiness.

The report was released by the Economic Intelligency Unit (EIU) - an arm of the The Economist magazine. The e-readiness report ranked New Zealand at twentieth out of sixty countries surveyed. The USA and Australia were first and second.

"I have written to the E-Business Forum editor asking for clarification of the methodology used in the study," he said "and a more detailed explanation of how the rankings were derived.

"In a similar report published last year using slightly different criteria,
NZ was initially ranked a lowly 35th. A review resulting from a question from New Zealand about the criteria used caused NZ to be raised to 17th place.

"The only significant area outlined in the report where New Zealand and Australia differ appears to be in respect of the legal and regulatory environment.

"According to our information, the New Zealand business environment is closely similar to Australia's. We have a less regulated telecommunications structure and there is a similar level of busines and general internet usage in the two countries. If anything New Zealand use is slightly higher than Australia. The Electronic Transactions Bill, that Bill will come into effect later this year.

"I look forward to hearing the EIU's response," Paul Swain said.

Letter attached.

Ms Louisa Vinton
The Editor, E-Business Forum
The Economist Building
111 West 57th Street
NY, NY 10019
UNITED STATES


Dear Ms Vinton

The publication of the latest E-Business Rankings by your organisation have been drawn to my attention. These international comparative rankings are not to be taken lightly especially when they are published by an organisation of the stature of The
Economist Intelligence Unit. Therefore the apparent relatively low positioning of New Zealand in the rankings is of some concern to the New Zealand Government.

It is not apparent to me how the rankings are derived. Of particular interest is how a separation of 1.29 points arises between New Zealand and Australia. The report comments that, of all the indices taken into account, the only one where New Zealand is significantly different from Australia is in respect of the legal and regulatory environment. I can only assume that this is due to the present lack of specific supporting legislation, which will be addressed when our Electronic Transactions Bill comes into effect later this year.

While this Bill will provide certainty that e-transactions are supported by law, there is no evidence that the absence of such legislation is inhibiting the take up of e-commerce in New Zealand in terms of contractually based dealings. Such dealings are governed by common law, and the New Zealand Courts have been forward thinking in the way they have dealt with civil disputes that have involved the use of electronic technology. Moreover, key laws addressing privacy and consumer protection are technology neutral and of wide application. Notwithstanding this, I expect that the Bill will be a boost to the take up of e-commerce, particularly in dealings with government agencies, and in cross-border trade.

According to our information, the New Zealand business environment is closely similar to that of Australia. New Zealand has a less regulated telecommunications structure (and lower overall telecommunications access fees) and there is a very similar level of business and general Internet usage in the two countries (in fact we think this is generally higher in New Zealand than Australia).

I would be very interested in any comment you could make on this issue, particularly the methodology used in the study, and a more detailed explanation of how the rankings were derived. Officials in the Ministry of Economic Development would be able to assist you with any enquiries you may have about the New Zealand e-business environment. I suggest that you could approach Frank March of the IT Policy Group (email: frank.march@med.govt.nz) if you have any specific information needs.


Yours sincerely


Hon Paul Swain
Minister for Information Technology
Minister of Commerce

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