Budget 2006: $64m more to push offshore development

An extra $64.2 million over four years in Government help for offshore market development has been welcomed by exporters, but one sector leader says it is not enough to catch up with Australia.

The Budget's expansion of the market development assistance scheme means annual funding will rise from $6.1 million to $25.9 million from next year. From 2008-2009 this figure will rise to $27.6 million.

The cash will be used for a variety of market development initiatives such as promotions and exhibitions.

Economic Development Minister Trevor Mallard said the extra funding would help "transform New Zealand into an innovative high value, export-led economy".

The cash has come from a reallocation of funds from sources such as other discontinued programmes.

The scheme's initial funding round, which opened in February last year, was heavily oversubscribed and companies awarded grants were already reporting successes as a result of getting support, Mallard said.

Under the expanded scheme, funds will be available to companies with turnover of up to $50 million - the cap was previously $20 million.

Export New Zealand chief executive Bob Walters praised the cash injection and the lifting of the threshold, saying there was no reason larger firms should not get an advantage.

"They find it just as hard to put in the money to develop new markets.

"I have absolutely no doubt that exporters will rush through the door to use [the scheme]."

But Walters said at least $40 million a year was needed for the funding to be comparable on a per capita basis with Australia."We'd still need more."

Employers and Manufacturers Association Waikato chairwoman Margaret Comer, an executive at Hamilton exporter Gallagher Group, also praised the extra funds but wanted more detail on their accessibility.

"Generally, governments of both colour have made the achievement of that sort of funding so difficult - you have so many hoops to jump through that you just think, 'Damn it, we'll do it ourselves'."

Selwyn Pellet, chief executive of Auckland-based and London-listed software exporter Endace, said the Government had clearly been listening to feedback on the need to provide better support for exporters.

Extra funds

* An extra $64.2 million over four years for offshore market development.

* Money for market development initiatives, such as promotions and exhibitions.

* Funding available for businesses with annual revenues of up to $50 million.