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New funding balance for PGP programmes

Hon Nathan Guy
Minister for Primary Industries

15 October 2015

New funding balance for PGP programmes

The Crown’s investment share in new Primary Growth Partnership programmes will shift from 50 percent to 40 percent from 1 December, with overall annual funding remaining the same, Primary Industries Minister Nathan Guy has announced today.

“The PGP has been operating for around five years, so it is a good time to consider the proper level of Government investment going forward and align it to other Government Funds such as the Callaghan Fund.

“We also believe the commercial benefits of the PGP are higher than the public benefits, which makes it only fair we tweak the formula.

“A 40 percent share is still a major investment and kick-start to primary sector research and innovation. This will ensure that the PGP continues to provide a major boost while also reflecting the ratio of commercial and public benefits.”

Current PGP programmes are not affected by this change. The 40 percent Crown investment ratio will apply to funding approved for new PGP programmes or for funding extensions of existing programmes approved by the Ministry for Primary Industries (MPI) from 1 December 2015.

The change will not affect the minimum total amount that industry must co-invest in PGP programmes, which will remain at $500,000 over the lifetime of the programme (ie $71,500 per year for a seven year programme).

“The PGP has 18 programmes underway and a total of $724 million co-invested by Government and industry over time. It encourages research and growth that wouldn’t otherwise happen, and will deliver wider public benefits.”

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A 2014 report by NZIER estimated that PGP programmes will add at least $6.4 billion per annum to New Zealand’s economy by 2025.

“The PGP is delivering tangible benefits and the Government has confidence that our primary industries will be able to continue their good work towards primary sector innovation activities.”

Improvements are also being made to simplify the application process to encourage smaller sectors to apply, including:

• introducing simpler reporting requirements;

• providing assistance to applicants for business case development; and

• exploring opportunities to assist smaller sub-sectors to access the PGP.

About the Primary Growth Partnership

• The PGP aims to boost the value, productivity and profitability of our primary sector through investment between government and industry. It provides an essential springboard to enable New Zealand to stay at the forefront of primary sector innovation.

• Government and industry are co-investing $724 million over time into 20 PGP programmes (with 18 currently underway).

• PGP programmes are generally long-run programmes of five to seven years’ duration and are subject to oversight and monitoring by an independent panel (the Investment Advisory Panel) and MPI.

• Monitoring requirements include programme steering groups, quarterly progress reporting, annual plans, financial audits, and progress reviews, along with evaluation of the overall programme. Government funding is only released to programmes on receipt of invoices for work completed in accordance with programme plans.

• More information is available at: http://www.mpi.govt.nz/funding-and-programmes/primary-growth-partnership/


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