Budget 2002 will target more domestic and foreign investment through the establishment of a new world class investment promotion agency - Investment New Zealand - and the creation of a Strategic Investment Fund.

Industry and Regional Development Minister Jim Anderton said economic development agencies had already secured some major investments while working on a limited budget. The new resources announced today, around $6.5 million in 2002-03 rising to around $8 million by 2004-05, will build on those successes.

"We've been encouraged by the major deals that have already been concluded - such as Ericsson Synergy's investment in a centre for developing mobile internet services.

"Investment is critical for New Zealand's economic development, and we're looking for investment that contributes to the government's innovation framework bringing new skills, new technologies and access to new markets.

"Economic innovation is at the heart of the budget and government efforts to transform the economy. The initial focus is on the strategic sectors of biotechnology, ICT and the creative industries," said Jim Anderton.
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Minister for Trade Negotiations Jim Sutton said the funding would strengthen investment promotion.

"Creating an integrated investment promotion agency was a key recommendation from the Boston Consulting Group. This will deliver a co-ordinated and revitalised investment promotion agency with world class capability. It will combine and build on the excellent work undertaken by the Investment New Zealand division of Trade New Zealand and the Major Investment Service in Industry New Zealand.

"The new agency will not be offering large financial inducements, but will instead tailor packages based on local expertise, skills, innovation and natural advantages," said Jim Sutton.

"It will also significantly increase the effort being put into attracting major investors and, more importantly, securing that investment for New Zealand."

The key elements of the initiative

• Extension of the investment promotion effort into Asia with the opening of Virtual Team offices in Singapore and Hong Kong, while increasing resources and focus on the United States and Australia;
• Strengthening the capacity to engage with major investors attracted to New Zealand and to do the deals needed to secure that investment for New Zealand through an increase in staffing resources; and
• Establishing a Strategic Investment Fund that will demonstrate, through small and well targeted underwriting and cash grants, the government's commitment to major investment, particularly from overseas.

"This new investment will help generate expertise, knowledge, contacts and technology. We can also expect to see increases in local productivity as local businesses benefit from exposure to new production techniques and access to innovation," Jim Anderton said.

Jim Sutton said maintaining the links with Trade NZ and the Ministry of Foreign Affairs and Trade's overseas networks will continue to be important for the new investment agency as it is set up.