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Outcome 1: New Zealand's Economic Growth and Prosperity are Enhanced Through High-Performing and Innovative Sectors

The sectors and associated businesses make a very large and growing contribution to the New Zealand economy. Long-run growth in the sectors requires continuous product, process and market innovation, and gains in labour and capital productivity. The general and sector-specific business environments, through their influence on these factors, are critical determinants of the long-run economic performance of the sectors.

We will know that this outcome is being achieved when the sectors are:

• Making a growing contribution to GDP.
• Attracting high-quality people and investment.
• Generating new product and process innovations.
• Achieving sustainable productivity growth.

Aiming for growth, innovation and new opportunities is inevitably associated with some degree of risk. The need to manage these risks, together with unintended outcomes, will be a critical element of MAF's strategies supporting this outcome. Identified potential risks include:

• New policies and regulatory regimes imposing undue costs on the sectors.
• A strong focus on the development of new industries resulting in missed opportunities for productivity growth within the existing industry sectors.
• A failure to grasp effectiveness and innovation opportunities.

Intermediate Outcome 1.1: Policies and interventions to foster innovation and growth in the sectors

The innovation system is a key driver of the long-run performance of the sectors. The Government has expressed a willingness to partner with business to facilitate enhanced growth and innovation. MAF will continue to work with industry in the interests of enhancing microeconomic flexibility and innovation in the sectors. This needs to involve consideration of wider business environment issues, as well as sector-specific issues.

State Indicators	Impact Measures
Total factor productivity in the sectors. Skill levels in the sectors. Levels of business investment in physical and capital assets in the sectors. Levels of public and private investment in intangible assets (e.g. research and development, training) in the sectors. Proportion of the total sales in the sectors that compete on attributes other than price.	Improvement in total factor productivity in the sectors. Increase in skill levels in the sectors. Increase in levels of business investment in physical and capital assets in the sectors. Increase in public and private investment in intangible assets in the sectors. Increase in proportion of total sales in the sectors that compete on attributes other than price.

MAF's key contribution:
- New policies and other initiatives to close skill gaps in the sectors
- Emphasising the vital importance of science and technology
- Stronger relationships with other agencies
State Indicators – the situation MAF is trying to improve
Impact Measures – how well MAF is doing in improving the situation

Intermediate Outcome 1.2: Effective and efficient regulatory regimes for the sectors

MAF's key contribution:
- Developing, monitoring and reviewing policies to ensure risks are managed, costs minimised and innovation empowered

Regulation must balance the need to contribute to public good outcomes with the need for businesses to be dynamic and innovative.

It must also be implemented as efficiently as possible to minimise costs to businesses, consumers and taxpayers.

MAF administers a number of regulatory regimes (including food safety, biosecurity and sustainable management e.g. privately owned indigenous forests) that are significant in this context.

State Indicators	Impact Measures
Number and impact of regulatory barriers to innovation in the sectors. Ranking of New Zealand sectors in international benchmark comparisons of effective and efficient regulatory regimes. Costs to the sectors of complying imposed regulatory requirements.	Reduction in number and impact of regulatory barriers to innovation in the sectors. Enhancement of the ranking of New Zealand sectors by international benchmark comparisons of effective and efficient regulatory regimes. Reduction in the costs to the sectors with New Zealand-imposed of complying with New Zealand-regulatory requirements.

Intermediate Outcome 1.3: Enhanced prosperity for Māori engaged with, or participating in, the sectors

MAF's key contribution:
- Identifying and addressing opportunities and barriers to Māori economic development

Māori have a disproportionate economic interest in land and forestry assets and supporting Māori to optimise the performance of those assets and the employment and other benefit streams they generate will contribute to lifting Māori per capita income in a sustainable way. Economic objectives will be given priority in relation to MAF's focus on Māori issues, reflecting the priority the Government has given to economic growth within the GIF strategy.

The biggest determinant of Māori per capita income is the performance of the New Zealand economy as a whole, balanced with associated social policy settings. MAF's wider contribution to the economic performance of the sectors is still the major contribution it can make to Māori economic wellbeing. MAF has a crucial role in supporting Māori to optimise the economic potential of their land and forestry assets by addressing opportunities and barriers for the development of those assets. MAF also has a stewardship and transitional role in the transfer of forestry assets to Māori ownership.

State Indicators	Impact Measures
Total factor productivity of Māori-owned agricultural, horticultural, food and forestry businesses. Median per capita income of Māori engaged in the sectors as owners, employees or beneficiaries.	Enhancement in the total factor productivity of Māori-owned agricultural, horticultural, food and forestry businesses. Enhancement in median per capita income of Māori engaged in the sectors as owners, employees or beneficiaries.

Intermediate Outcome 1.4: Enhanced business environment for Key contribution: rural communities

Key contribution:
- Improving the business environment for rural communities by addressing infrastructure issues that impede business growth and prosperity

The sectors and supporting rural communities provide much of the basis for New Zealand's economic growth and innovation. The sectors benefit substantially from a supportive business environment and from an efficient and effective network of energy, transport and telecommunications infrastructure for our rural communities.

State Indicators	Impact Measures
Cost differentials related to infrastructure, energy and communications services for rural community-based businesses compared with non-rural counterparts. Deficiencies in availability and quality of infrastructure, energy and communications services for rural businesses compared with non-rural counterparts.	Reduction in cost differentials related to infrastructure, energy and communications services for rural community-based businesses compared with non-rural counterparts. Reduction in deficiencies in availability and quality of infrastructure, energy and communications services for rural businesses compared with non-rural counterparts.

Contact for Enquiries

Strategy and Performance Group
Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington

Tel: +64 4 894 0100
Fax: +64 4 894 0738 Contact this person