NZTE refocuses strategy
Updated 16 November 2023
In September, New Zealand Trade and Enterprise (NZTE) announced a series of proposed changes to meet the changing needs of our export customers and to fit within a new, lower budget from 1 July 2024.
In response to the impact of COVID-19 the government allocated temporary extra funding to NZTE from 2020 onwards. This amount – $54 million a year for four years – came from the COVID Response and Recovery Fund (CRRF) and allowed us to boost our support for exporters during the pandemic.
CRRF funding will end as planned for all agencies, including NZTE, in June 2024. This reduction in the budget will be partially offset by an increase in baseline funding of $10 million. This means we will remove a net $44 million from our spending by mid-2024.
Following consultation with NZTE's people it is now confirming a broad range of changes:
In 2020, NZTE doubled the number of Export Customers in the intensively supported Focus portfolio from 700 to 1,400, drawing on CRRF funding to support this. Going forward NZTE plans to serve around 1,000 customers at this level.
There will be both ongoing and new support options for the more than 5,000 customers outside of the Focus portfolio.
The International Growth Fund (a public/private co-investment fund for exporters) will return to its pre-pandemic $30 million per annum level, down from the current $60 million. The reduction will be staggered over the next four years to reach $30 million per annum in FY2026/27.
Several temporary services initiated during the pandemic (such as freight advisory) will either be retired, delivered through digital channels, or offered through private providers.
NZTE will consolidate global resourcing to ensure that our capacity is where exporters need it to be, including retention of most of the new capacity built up in North America and Australia.
There will be substantial changes across NZTE's operations to reduce costs from support functions, sponsorships, property, consultants, and contractor spending. Changes include a reduction of 71 roles, or approximately 10% of NZTE's workforce.
This refocused approach delivers a total cost reduction of $44 million (14 percent of existing budget), including an operational cost reduction of $14 million (7 percent).
Two-thirds of the total reduction comes from changes to non-customer costs, while only one third comes from NZTE's direct customer front line.
NZTE has made these changes to ensure it continues to deliver maximum value for export customers in a new budget environment and retain as much benefit as possible from the COVID investment. NZTE will retain a Focus export customer portfolio significantly larger than the pre-pandemic Focus 700 and will also retain our enhanced front-line support in our high-value and high-GDP markets of North America and Australia.
NZTE remains committed to growing New Zealand businesses internationally, and we continue to have the capacity to do this.