The government is establishing a single grant scheme to assist businesses growing globally by combining three of New Zealand Trade and Enterprise (NZTE)’s existing grant schemes into one single flexible fund.

Economic Development Minister Gerry Brownlee said the new fund will be targeted at businesses, irrespective of size, with the potential for high growth in new markets, or which already have an established global presence but are seeking to expand or intensify their operations.

New criteria will ensure support for businesses that are most likely to generate significant economic returns for New Zealand.

“Experience and evidence indicates that focusing efforts on a targeted group of businesses generates greater net economic benefits than spreading assistance thinly across many businesses,” Economic Development Minister Gerry Brownlee said.

“The new fund will give much more tailored and flexible services to the businesses that we can add the most value to. This is particularly important in the current economic environment where businesses face challenging trading conditions.”

By 1 July 2010 a total of $30.447 million will be available to businesses through the single flexible fund. Businesses using the fund will need to match NZTE’s funding contribution.

NZTE’s Market Development grant will continue for one more year and then be phased out over the following year. The Capability Building grant will be phased out over the next year.

The Growth Services Fund, which supports firms to develop skills and resources to implement their growth strategy, will be expanded and altered to form the new single flexible fund, resulting in a funding scheme that helps support businesses growing globally.

Businesses that receive support from the new single flexible fund will work closely with NZTE so that NZTE can assess the best package of funding and other support services for those businesses and for New Zealand’s economy.

“NZTE will work more intensively with these businesses to better understand the strategic issues they face. They will develop tailored packages of services (including grants) that address their specific needs and deliver benefits to the wider economy.”

More than half of the budget currently allocated to the various grant programmes run by NZTE is being transferred to the new fund. The overall budget allocated for NZTE grants programmes is being reduced in 2009/10 by $10 million and $30.4 million in 2010/11.

The total budget for the new single flexible fund will progressively increase from approximately $9.6 million in the year to 30 June 2010 and approximately $30 million in the year to 30 June 2011.

Businesses that are not eligible for the new fund will still have access to a wide range of assistance from NZTE and third parties. This includes other NZTE programmes, training, offshore services and third-party business support programmes.

“We recognise that many of these businesses also need help surviving in the current economic environment. NZTE is improving its standardised tools and programmes with this in mind.”

Operational details of the fund are being worked through and further details will be announced by 1 July 2009.

Grants Programme Developments

Questions and Answers.

      1.  What’s changing?

Three NZTE grants programmes are being consolidated into one new single flexible fund that will be available to businesses that are NZTE clients with high growth potential:

• The Growth Services Fund is being modified and expanded.


• The Market Development grant fund is being phased out.


• The Capability Building grant fund is closing.

       2.  When are the changes effective?

The Capability Building grant fund is closing on 30 June 2009. No applications will be accepted after 1 June 2009. This will give NZTE time to assess and approve applications by 30 June 2009.

The Market Development grant fund is closed to new applicants now. Existing recipients of Market Development grants will be able to apply for further grants until 1 June 2010. This will give time for applications to be assessed and approved by 30 June 2010, when the fund will be closed.

The current Growth Services Fund will be modified and progressively expanded to create the new single flexible fund.

The new single flexible fund will be open to eligible NZTE clients from 1 July 2009.

      3.     Why are NZTE’s grants programmes being altered?

Recent evaluations of grants programmes have shown that grants are more effective when they are delivered with complementary support services from NZTE and other agencies.

Investment of taxpayer-funded grants and other resources into businesses must deliver benefits not only for the recipient businesses but also wider benefits for the economy.

The changes to NZTE’s grants programmes will help ensure that taxpayer dollars that fund these programmes achieve better outcomes for New Zealand. This means assessing the merits of proposals and likely return to New Zealand before Government invests.

       4.  What do you expect will be the result of this change in funding?

The changes to NZTE’s grants programmes will help ensure that taxpayer dollars that fund these programmes achieve better outcomes for the New Zealand economy than continuing to provide non-discretionary grants (such as Capability Building and Market Development grants) that do not require assessment of growth potential and broader public benefits likely from the investment.

• 5.    What type of business will be eligible for this fund?

Eligibility will depend on a range of factors and on the number and quality of the proposals.

The fund will only be available to businesses that are NZTE clients. This means they will have worked with NZTE to develop a plan for an appropriate package of services (including funding) to help the business. The plan also outlines the expected economic benefits for New Zealand that will result from NZTE’s support.

Funding will be available to businesses irrespective of their size: the important factor is that they must have potential and a commitment to high growth in new markets; or have an established market presence and be seeking to intensify their operations.

Proposals must be additional to companies’ business as usual activities and have the potential to deliver benefits for both the business and New Zealand’s wider economy. 

• 6.     The capability building grants are being phased out over a year, so can I still get a grant if I get my application in over the next 12 months?

The capability grant programme closes on 30 June 2009. No applications will be accepted from 1 June 2009. This will give NZTE time to assess and approve applications by 30 June 2009.

Businesses that are part of the capability building grant programme (i.e. they have a current contract with NZTE) will continue to receive the support specified in their contract. This means that while they can’t apply for any new capability building grant funding after 1 June 2009, they will still be able to get their reimbursements for capability building activity within the term specified in their contract with NZTE.

• 7.     The market development grants are being phased out over two years, so can I still get a grant if I get my application in over the next 24 months?

No. If you are not already part of the market development grant programme then you can’t make a new application for a market development grant.

Businesses that have a current contract with NZTE will continue to receive the support specified in their contract.

Any business that has previously received a market development grant, and is eligible to apply for a further year of funding, will be able to apply for a grant through until 1 June 2010.  They then have the usual 15 months under a contract with NZTE to make a claim. 

The additional year will give businesses time to alter any market-entry or market-expansion plans that are affected by the closure of the market development grant programme. 

The EDG-MD fund will be closed on 30 June 2010.

• 8.     What happens to applications for EDG-MD grants that are currently in the “standby pool” after the “soft close” in February? 

The EDG-MD fund was closed to new applicants on Friday 20 February 2009.  Funding has not become available for the standby pool and NZTE will not process applications in the standby pool.

• 9.      What else can NZTE offer me instead of a grant?

NZTE has a range of services available to continue helping businesses, including:

• The Escalator Service – help to raise equity funding or complete a strategic relationship for a business that is expanding, diversifying or commercialising a product or service.


• Comprehensive market intelligence gathered offshore, including generic intelligence available to all businesses and specific research commissioned for NZTE clients.


• The Beachheads Programme – accelerating New Zealand business growth through access to international business advice and networks.


• The Enterprise Training Programme - courses that build knowledge of specific areas of business management.


• Business Mentoring – advice and guidance from experienced business people.


• Biz 0800 hotline and web-based services – support from trained advisers and referrals to specialist business assistance services.

Other Government agency funding assistance available for businesses, includes:

• The Australia New Zealand Biotechnology Partnership Fund.


• The Foundation for Research, Science and Technology’s TechNZ programme, that provides up to $50 million each year to develop new technology-based products, processes and services.


• Various credit, bond and financing guarantees offered by the Export Credit Office.

• 10.     What support do you offer for small businesses?

A wide range of support will still be available through NZTE programmes and grants for small businesses. 

Businesses already using the Market Development programme will still be able to apply for another year of funding. This will ensure they receive support during the current difficult economic conditions and have time to alter any market-entry or market-expansion plans that are affected by eventual closure of the programme.

Investment of taxpayer-funded grants and other resources into businesses must deliver benefits not only for the recipient businesses but also wider benefits for the economy.  The changes will help ensure that taxpayers who fund these programmes get a better return on their investment.

Additionally, the government announced a package of support for SMEs in February this year, including:

• a suite of 11 tax changes


• an expansion to the export credit scheme


• extended jurisdiction for the Disputes Tribunal


• expansion of business advice services


• and a prompt-payment requirement for government agencies.

• 11.   How do I find out more about the new fund and whether I am eligible?

Please contact your client manager or call NZTE on 0800 555 888 or look at the information on the ‘Find Funding Assistance’ section of NZTE’s website www.nzte.govt.nz