KEY POINTS:
Kiwi companies aiming to expand overseas get a $115 million boost under the Budget.
The Market Development Assistance Scheme, which covers up to half the costs of initiatives including promotions and exhibitions, will get an extra $87.8 million spread across the next four years. Annual funds available from the scheme will rise to $53.6 million from 2009/10, up from the previous $27.6 million.
Economic Development Minister Trevor Mallard said improved export performance was crucial if living standards were to be raised and New Zealand transformed further into a higher-wage economy.
The scheme's new funding was announced after the Government decided not to go ahead with a tax credit for export market development.
"We listened to many businesses and agreed expanding existing grants was a far more effective way of giving the exporters the right assistance they need to develop opportunities overseas," Mallard said.
Alasdair Thompson, chief executive Employers and Manufacturers Association Northern, said extra support for companies looking to tap into offshore markets was a good move.
"Whether they needed to put the money in or whether it just needed to be redirected within NZTE [Trade and Enterprise] I don't know," he said.
Several other initiatives raised the total for extra state funding for offshore market development to more than $115 million.
* An extra $6.3 million over four years to expand the Beachheads programme into China and India, place advisory boards in all Beachhead regional locations and expand the expatriates' network Kea.
* $19.4 million more over four years to increase NZTE assistance in China, India and Japan.
* $1.6 million for representation at the World Expo in Shanghai in 2010.
* Contract bonding for exporters bidding for US federal or state contracts requiring a bond, or cash, equivalent to at least 100 per cent of the size of the transaction - to be funded through contingency liability of $50 million.
Business NZ chief executive Phil O'Reilly said funding for export links in Asia and expansion of NZTE assistance was positive for exporters.
"Changes in the controlled foreign companies tax regime will also be welcomed as this aligns us with the rest of the world," O'Reilly said.
John Walley, chief executive of the Canterbury Manufacturers' Association, said support for companies would help "but nothing like as much as stabilising the exchange rate would".
Trade Minister Phil Goff said the new funding for NZTE reflected an expected growth in demand for its services in China, Japan and India.
"Opportunities in these markets are growing rapidly but New Zealand firms are not engaging with these markets at a rate that reflects this growth," Goff said.
By 2040 Japan, the US, China and India would be the world's largest economies. "It is up to the business community to seize the opportunities these initiatives offer."
Foreign focus
* $115 million of new funding to help firms expand offshore.
* Increases to grant system chosen over tax credits.
* Focus on developing Asian markets.
