Parliament

Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 

Expanding & Enhancing Strategic Investment Fund

10 May 2004 Media Note
Budget 2004

Expanding & Enhancing the Strategic Investment Fund


The Strategic Investment Fund, administered by New Zealand Trade and Enterprise, will receive additional funding of $4.025 million in 2004/05 and out-years to support the expansion of Investment New Zealand’s promotion and attraction capability.

This funding will enable an expanded number of feasibility studies, guarantees of government funding and, in certain circumstances, cash grants, to encourage firms to invest in New Zealand. The fund is open to New Zealand companies but, in practice, we expect most recipients to be new foreign investors.

Expanding Investment New Zealand’s investment promotion and attraction capability is expected to contribute to a significant increase in the level and quality of foreign direct investment in New Zealand. Additional FDI will improve New Zealanders’ livings standards by growing the economy through adding to the capital stock, creating new and better quality jobs, and increased productivity eg through technology transfers or enhancing global distribution channels for New Zealand companies..

Rationale

New Zealand needs to attract more and better quality foreign direct investment (FDI). Key to this is having an overall business environment that is conducive to new investment, but “good fundamentals” alone are not sufficient for attracting more and better quality investment to a small open economy like New Zealand. That is because:

- Without promoting itself, New Zealand cannot expect to have a very high profile among international investors and a low profile is likely to impede flows of investment to New Zealand from overseas;

- Investors only value the benefits that accrue to them. They do not consider the potentially significant benefits that may accrue to New Zealand businesses, employees and consumers, such as new jobs and higher wages, higher tax revenues, and increased demand for local supply. In the absence of government support, this can lead to under-investment. Investment incentives, including cash grants, are therefore aimed at increasing the quantity and quality of investment. Incentives are made conditional on the occurrence of certain beneficial outcomes for New Zealand including sustainable new employment, the introduction of new technology or R&D activities, better access to international markets or distribution channels.

- Increasingly, we face active competition for new investment from investment promotion agencies in other countries.

Assistance from the Strategic Investment Fund addresses the above issues by:

- Providing a firm signal of commitment from the government that the investor is welcome in New Zealand;

- Providing INZ with a “seat at the table” to ensure that the investor’s needs are met and that any unreasonable impediments to investing are identified and addressed; and

- Better enabling New Zealand to benefit from investment through granting investment incentives that lead to significant economic benefits for New Zealand.

How does the initiative contribute to GIF objectives?

FDI contributes to economic growth by adding to the capital stock, creating new and better quality jobs, and increased productivity. Most important is the contribution to increased productivity, including through:

- Better use of resources for production. For example, output by workers could increase as a result of new technology brought to a local enterprise by a foreign investor. In turn this could lead to higher wages, reduced costs or higher quality of intermediate goods, and lower costs or better quality products for consumers.

- Spillover benefits from foreign firms to local firms. For example foreign investors can bring to local firms better international distribution channels.

- Improved domestic market competition. A foreign entrant may increase competition in the domestic market, eventually leading to higher productivity, lower prices, and more efficient resource allocation within the economy.

How does the initiative contribute to achieving the Government’s key goals?

Increased high-quality investment has the potential to create new and better quality jobs, improve New Zealanders' skills, and raise living standards for all New Zealanders.

Links to other initiatives/rest of GIF package

This initiative is complemented by the initiative to Enhance Investment Promotion and Attraction Capability.

Funding

Additional funding of $4.025 million for Investment NZ in 2004/05 and out-years represents an increase of 100 per cent over current funding.

$million (GST inclusive where applicable) 2004/05 2005/06 2006/07 2007/08 Out-years
Operating – new 4.025 4.025 4.025 4.025 4.025
Operating – redistributed Nil Nil Nil Nil Nil
Capital - new Nil Nil Nil Nil Nil
Capital - redistributed Nil Nil Nil Nil Nil
Total 4.025 4.025 4.025 4.025 4.025

ENDS

© Scoop Media

 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

Gordon Campbell: On Oprah as a Presidential Hopeful

Oprah for President…That was one of those summer silly season stories, right ? Maybe not.

On the morning after the Golden Globes Awards ceremony where she delivered That Speech (“I want all the girls watching here now to know that a new day is on the horizon!”) a lot of people seem to have woken up in the cold light of day with a vision of President Winfrey still dancing in their heads.

Oprah’s presidential run may have legs…More


 

Gordon Campbell: On Jim Anderton
For anyone born after 1975, it is hard to grasp just how important a figure Jim Anderton was, for an entire generation.
During the mid to late 1980s, Anderton was the only significant public figure of resistance to the Labour government’s headlong embrace of Thatcherism...More>>

ALSO:


Gong Time: New Year's Honours List

Jacinda Ardern today congratulated the 179 New Zealanders named on the 2018 New Year’s Honours List.

“Although this list was compiled and completed by the last government, it is a pleasure to welcome in the New Year by recognising exceptional New Zealanders,” Jacinda Ardern said.

“As an Aunty, I love reading books to my nieces, so it’s lovely to congratulate Joy Cowley, who is made a member of the Order of New Zealand today....More
Full list


Roads: National launches bid to save highway projects

The National Party has launched a series of petitions aimed at saving regional highway projects at risk because of the Government’s obsession with Auckland trams…More>>

ALSO:


Medical Cannabis: Bill Introduced to “ease suffering”

Health Minister Dr David Clark says making medicinal cannabis more readily available will help relieve the suffering of people who are dying in pain More>>

ALSO:

Campbell: On The Quest For Zero Net Carbon Emissions
Some would querulously ask, zero net carbon emissions by 2050 – while others would say, why not?
More>>

ALSO:

CPAG Report: The Further Fraying Of The Welfare Safety Net

New Zealand’s welfare system has undergone a major transformation during the past three decades. This process has seriously thwarted the original intent of the system, which was to provide a decent standard of living for all New Zealanders in times of need... More>>

ALSO:


 
 
 
 
 

LATEST HEADLINES

  • PARLIAMENT
  • POLITICS
  • REGIONAL
 
 

Featured InfoPages