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Building A Bright Future

The Bright Future Package announced today is the Government's action plan to meet the challenges of the knowledge age, Enterprise and Commerce Minister Max Bradford says.

"The world is changing into a global market place as we go through a revolution in information and communications technology. Things we used to dream of are becoming possible at an amazing rate.

"Increasingly, what's in our heads is becoming as valuable as what's in our paddocks, our forests and oceans. In this environment, New Zealand needs to step up a gear to ensure it continues to prosper.

"Bright Future is the Government's considered response to this challenge. The package totals $223 million over four years and includes $47 million of new spending, up to $137 million of reallocated funds and $39 million from contingencies and savings.

"It draws on the ideas raised by more than 2000 people at 25 forums around the country earlier this year. The Government listened and today it is acting," Mr Bradford said.

"Bright Future is about giving New Zealanders the skills to excel in the knowledge era, building the capability of our workforce and generating and funding good ideas.

"The wide range of initiatives has been carefully designed to improve our ability to innovate. The Government is helping businesses to get the skills they need. It is up to businesses to decide what skills they want.

"The scholarship programme and the enterprise education review will engage industry more actively in education. The post-graduate scholarships and the review of higher learning will focus resources on the creation of more world-class centres of academic excellence.

"The New Economy Research Fund will complement these centres of academic excellence with centres of research excellence.

"The redirection of CRIs, the incubator programme and the expansion of Technology NZ, coupled with improvements in access to finance, will all help to build high technology clusters of firms feeding off the centres of research excellence.

"The general reduction in compliance costs and the promotion of the spirit of success will provide a more conducive environment for innovation," Mr Bradford said.

"The changes are essential to the future of rural industries. We must increase the level of high value added produce from the land through biotechnology and other research. The New Economy Research Fund is designed to do just that."

Mr Bradford said the Government would consider changes to the taxation of research and development.

"Research costs can currently be expensed in the year they are incurred. We are looking at whether it is appropriate to extend this tax treatment to development, however, we do not want to create large tax loopholes or perverse incentives in the process. We have therefore decided to have a good hard look at factors affecting R&D, rather than rushing it," he said.

"Bright Future will spearhead our efforts to make New Zealand the best country to live and do business in. It's an investment in our future. We are aiming high - but we'll not break the bank.

"These initiatives show how the Government is prepared to provide leadership and to play its part. We invite all New Zealanders to join us," Mr Bradford said.

ENDS

Background:

Knowledge Economy

What is the knowledge economy?

The term 'knowledge-based economy' is used to describe an economy where the value tends to be created by peoples' knowledge rather than investment in capital plant and natural resources (such as land or forests), or straight physical labour. It has been described as "business at the speed of thought".
In the knowledge economy, what's in our heads matters most. This can be contrasted with the agrarian economy where what we grew was most important, and the industrial economy, where what we made was the key to prosperity.

Attached: Bright Future Fact Sheet


SUMMARY OF KEY INITIATIVES

Overview

The package is worth around $223 million over 4 years. This includes $47 million of new spending, up to $137 million reallocated from the Public Good Science Fund, and $39 million from contingencies and savings.

Tertiary Education/ Research and Development Initiatives

 $30 million a year in new scholarships, consisting of:
- 1500 Enterprise Scholarships a year, to be co-funded with industry; and
- 80 doctoral scholarships a year, worth around $40,000 each per annum

 Higher Learning Sector Taskforce to develop shared vision for structure of tertiary sector, expected to report by June 2000.

 $36 million New Economy Research Fund;

 $7.25 million per annum for post-doctoral fellowships;

 Review of factors affecting investment in research and development, including tax deductibility of R & D, to report by March 2000;

 Enterprise Education Taskforce to report by June 2000;

 Proposed expansion of Technology New Zeakand.

Secondary Education Initiatives

 Around $10 million over 3 years for teacher fellowships and study awards in maths, science, enterprise and technology;

 Up to 1200 awards a year of $500 for the top maths, science and technology bursary students, providing they continue their study at tertiary level;

 Up to 90 awards each year for all round top bursary students, ranging from $2,500 to $8,000;

 $1 million over 3 years to raise entrepreneurial skills in school children.

Access to Capital Initiatives

 Government support for small business stock exchange;

 About $2 million a year for new 'ideas' incubators to help get ideas to market;

 Changes to Securities Act to reduce the costs of raising capital;

 Aggressive promotion of New Zealand to overseas investors through targeted conferences and information to key investors;

Initiatives to Reduce Regulation

 Small Business test panels to review and reduce the costs of regulation;

 Government Departments to cut regulations by 12 - 25%;

 Initiatives to reduce the costs of paying tax, announced today by Revenue Minister Sir William Birch;

 Simple on-line guides to laws to be added to BIZinfo web site;

Initiatives to Promote Success

 Prime Minister's Awards targeting science, technology, innovation and enterprise;

 Innovate New Zealand Council to develop a shared view of New Zealand's future;

 Website and newsletter to be launched to build links with New Zealanders overseas.

ENDS

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