Code for Business Development Boards 1995 Pursuant to section 7 of the Business Development Boards Act 1991, the Minister of Business Development hereby prescribes the following code. Code 1. Title and commencement (1) This code may be cited as the Code for Business Development Boards 1995. (2) This Code shall come into force on 11 December 1995. 2. Definitions In this Code, unless the context otherwise requires ``Business development programme'' means the Government programme described in clause 5 (2) of this code: ``Enterprise assistance'' means measures aimed at fostering economic growth including improving capabilities and growth potential of businesses: ``Government's enterprise assistance package'' means the Government's measures that are targeted at addressing problems that constrain business, especially small to medium sized firms, from achieving optimal performance and so contributing fully to the improvement of New Zealanders' standard of living. These measures are delivered by a range of agencies: ``Minister'' means the Minister of Business Development: ``SME'' means small to medium enterprise. Part I Goal of the Boards 3. Goal of business development boards The goal of each business development board is to enhance the capacity of New Zealand business to achieve and sustain international competitiveness. Part II Activities Boards are to Undertake 4. Activities The activities each Board is to undertake are (a) To administer the Government's Business Development Programme; (b) To provide advice to the Minister on the programme and on business development in its region in accordance with clause 8 of this Code. 5. Business development programme (1) The aim of the Business Development Programme is to help New Zealand's SMEs gain access to the information and skills they need to compete effectively in today's globalised trading environment and so accelerate and sustain economic growth. (2) The Business Development Programme consists of the following components: (a) An information component; (b) A business capability component comprising: i A preliminary appraisal exercise ii A business training/educative element iii A grant scheme iv Business Best Practice education and recognition initiatives including the Business Development Quality Awards. (c) A regional co-operation component. (3) Boards shall administer the Business Development Programme in accordance with the provisions in this Code (including the Schedule to this Code) and consistently with any purchase agreement entered into between the Minister and the Boards. 6. Co-operation Boards shall develop relationships and work closely with other enterprise assistance providers in their region. It is the Government's requirement that all enterprise assistance agencies co-ordinate their activities so as to minimise the potential for overlap in the services each provides whilst maximising effective coverage. Part III General 7. Support for domestic industry and purchasing Each Board shall follow the Government's public sector agencies purchasing requirements as notified to it from time to time. 8. Advice to the Minister Each Board shall advise the Minister, on at least a quarterly basis, in relation to: (a) Significant business developments in its region; and (b) Significant matters affecting business development in its region. 9. Decision making (1) Each Board is responsible for making decisions on applications under the Business Development Programme. (2) Boards may delegate to managers the power to make decisions in relation to grants for preliminary business appraisals under clause 5 (2) (b) (i) of this Code. (3) Each Board is responsible for ensuring that its decision making processes are fair and reasonable. (4) Each Board shall set out in writing its priorities for the assistance it gives under the Business Development Programme. (5) Each Board shall make the priorities it sets under subclause (4) of this clause available to any person who requests them. (6) In considering applications under the Business Development Programme each Board shall have regard to the priorities set by the Board under subclause (4) of this clause. 10. Reviews (1) Subject to subclauses (2) and (3) of this clause, the decision of a Board in relation to an application shall be final. (2) An applicant has the right to request a review from their Board of the process by which a decision is made on an application. (3) Each Board is responsible for ensuring that it has in place procedures which shall be used when an applicant requests a review of any decision. 11. Suspension of Programme The Minister may, in writing, instruct any or all Boards to suspend the approval of any or all grants under the Business Development Programme if the Minister is satisfied that such action is necessary to avoid the current financial year's appropriation for the Business Development Programme being exceeded. 12. Revocation The following notices and Codes are hereby revoked: (a) The Code for Business Development Boards 1993 (No. 2) published in the New Zealand Gazette, 6 August 1993, page 2305. (b) The Code for Business Development Boards 1993 (No. 2), Amendment No. 1, published in the New Zealand Gazette, 24 February 1994, page 907. (c) The Code for Business Development Boards 1993 (No. 2), Amendment No. 2, published in the New Zealand Gazette, 28 April 1994, page 1452. (d) The Code for Business Development Boards 1993 (No. 2), Amendment No. 3, published in the New Zealand Gazette, September 1995, page 3098. 13. Transition (1) Notwithstanding clause 12 of this Code (a) All applications for grants under the Business Development Programme Schemes that were received by a Board before the 14th day of September 1995; and (b) All letters of intent to apply for grants under the Business Development Programme Schemes that were received by a Board before the 14th day of September 1995 shall be processed by the Board as if this Code had not come into effect. (2) Notwithstanding clause 12 of this Code, every existing grant shall continue to have effect and shall continue to be administered by the Boards as if this Code had not come into effect. (3) Notwithstanding clause 12 of this Code, the rights and obligations attaching to existing grants shall continue in force as if this Code had not come into effect. (4) Notwithstanding clause 12 of this Code (a) Where any person had a right of appeal under paragraph 13 of the Schedule to the Code for Business Development Boards 1993 (No. 2) (``the 1993 Code'') that had not expired as at the 14th day of September 1995; or (b) An appeal had been lodged with the Minister but not determined before the 14th day of September 1995 the 1993 Code shall continue to apply to that right or to that appeal for the purposes of making or determining the appeal or implementing any decision arising out of that appeal, including the making of a grant in accordance with the 1993 Code, as if this Code had not come into effect. (5) For the purposes of this clause, the term `existing grant' includes all grants made under the provisions of the 1993 Code, whether before or after the 14th day of September 1995. Schedule The Business Development Programme I Provision of Information 1 Boards shall endeavour to provide relevant and timely information for SMEs within the following main categories: (a) The overall economic and regulatory environment in which businesses operate, highlighting the significance of particular developments for SMEs; (b) New Zealand's trading activity and the regional economy, highlighting opportunities for SMEs; (c) Techniques to improve business skills; (d) Sources of advice and assistance for SMEs. II Business Capability Improvement 2 Assistance provided under the business capability improvement component may involve: (a) Preliminary business appraisal designed to assess individuals and businesses' capability/skill and performance levels at a given point in time. This provides a basis for developing an ongoing programme for improving skill and performance levels and for considering what assistance can be offered to help the firm make progress; and/or (b) Business training/educative element based on skills/knowledge/capability `gaps' identified in the appraisal. Clients will be referred to business training of a level and duration appropriate to their needs to develop their capabilities/skills/performances; and/or (c) Grant scheme the provision of funding by which a client can test/apply the new capabilities/skills gained through the business training educative element. Three critical areas are skills in innovation/research and development, strategy, implementation; and/or (d) Business Best Practice education and recognition initiatives including the Business Development Quality Awards directed at fostering the application of total quality management principles and practices in New Zealand organisations, particularly SMEs. Businesses will be encouraged to apply total quality management principles (i) by receiving advice and information; and (ii) by having their achievement recognised through the Business Development Quality Awards. II.a Preliminary business appraisal component 3 This component will focus on 8 business capabilities: -business planning -marketing -operations management -financial and information systems -organisation and human resource management -product design, research and development management -quality -environmental management 4 The appraisal will be carried out by a person selected by the applicant. A grant of up to $500 (G.S.T. inclusive) may be provided. No grant will exceed 50% of the cost of the appraisal. The maximum grant will be $500. 5 A pre-appraisal may be carried out for individual (non-SMEs) applicants by the Board for free. This may be a substitute for a full business appraisal. II.b Business training/educative component 6 The eight capabilities covered in the preliminary business appraisal component provide the basis for this component. It involves a training/educative element which is based on skills/knowledge/capability gaps which have been identified through the appraisal. 7 Boards will refer applicants to persons or entities who provide training in the relevant skill. No money will be provided by the Board to individual course attendees under this component. 8 Where the costs of running a seminar or training meeting cannot be met in full by fees paid by participants, Boards may underwrite the trainer's fees. II.c Grant scheme 9 The purpose of the grant scheme is to provide funding by which a business can test/apply relevant capabilities/skills (either gained through the business education training package or independently acquired). Grant money may be available for activities in the following three areas: i) innovation/research and development, ii) strategy, iii) implementation. 10 The strategy element will help businesses to determine their goals and objectives, ways of meeting them, and identify any necessary resource requirements. The innovation/research and development and implementation elements will enable businesses to test this strategic focus. A strategic review option is also available to measure progress and to make any modifications necessary to enable the business' long-term objectives to be kept in focus. Limits 11 Assistance is offered on the basis of one dollar of funding under the scheme for every dollar contributed by the applicant to a maximum grant of $50,000 for all time to any one applicant. Applicants can make any number of applications against this $50,000 maximum but approvals are subject to a maximum of $20,000 in any one July/June year. The $50,000 and $20,000 maximums apply to the amounts actually uplifted. Grants are G.S.T. inclusive. 12 Any grant for the innovation/research and development component shall not exceed $10,000 per annum. II.d Elements of the grant component further details Innovation/research and development 13 This element will cover the following 8 areas: (a) Market assessments (b) Financial analysis (budgets, cash flows, pricing and costing and funding needs) (c) Research and Development, including the development of prototypes (d) Production feasibility studies (e) Intellectual property protection (f) Accessing technology (g) Regulatory requirements (h) Distribution 14 Applicants seeking a grant under the innovation/research and development element will have to show that they are developing a product/service new to the region (research and development component) or that they are looking to introduce new technology into an existing product or service (innovation component). Strategy 15 As noted in clause 3 of this Schedule, eight capability areas will be covered. The maximum grant under this element is $20,000 per annum. Implementation 16 This element will cover 5 areas each with a maximum 50% grant component: (a) Market research into new overseas markets, $2,500 (b) Exploration visits to new overseas markets, $3,000 (covers one airfare/visit only and no ground travel; applicant must show prior evidence of research and prescheduled appointments) (c) Trade fair participation, $7,500 (may include travel) (d) Promotion/advertising in new overseas markets, $5,000 (e) Intellectual property protection, $2,000. III Applicant Criteria Who may apply 17 Applications can be made by any individual, business, trust, organisation, iwi authority or incorporation etc, resident in NZ and registered for either income tax or G.S.T. purposes (ie based in NZ for the purposes of tax) 18 Applicants employing more than 50 full-time or full-time equivalent employees are not eligible to apply. This criteria ensures that the programme remains targeted at SMEs. 19 For the purposes of the Business Dvelopment Programme any 2 or more corporate bodies are deemed to be one person if (a) One of them is a body corporate of which the others are subsidiaries within the meaning of (i) Sections 158 and 158A of the Companies Act 1955, in relation to a body corporate registered under that Act; or (ii) Sections 5 and 6 of the Companies Act 1993, in relation to any other body corporate; or (b) All of them are subsidiaries (within the meaning of those sections) of one and the same body corporate. What activities may be considered 20 The grant scheme is only available to those able to show that the goods/services they produce/provide already compete, or show potential to compete, in either domestic or international markets. This is confined to businesses/individuals who are selling or intending to sell in overseas markets and those selling in competition with imports. 21 Assistance is only available for legal activities. 22 Assistance is not available for activities which are directed at the Australian market; this is in line with NZ's obligations under the Australia and New Zealand Closer Economic Relations Trade Agreement (ANZCERTA). Skills 23 To gain entry to the scheme applicants will have to satisfy their Board that they are at the stage where a grant is appropriate, ie that they wish to test or apply a skill that they have acquired or have had access to through either the programme's business training/educative element or through some other means. The Board will base its decision on the appropriateness of the grant on the basis of the preliminary appraisal - which will clearly show the level of capability/skill or it may waive this requirement if applicants are able to demonstrate their skill/capability level through some other means. IV Payment of Claims 24 Claims against approved grants can be made any time after the grant has been accepted. 25 Grants are paid on a reimbursement basis. 26 The only basis on which claims will be paid out is: (a) on matching receipts to original invoices; or (b) on an accountant's certification of costs paid; this must be from an independent accountant (ie not the applicant's in-house accountant) in public practice and must match expenditure to the approved qualifying costs (the cost of obtaining such a certification is a qualifying cost of the Programme). 27 No other Government funds may be used for the balance of the costs funded under the Business Development Programme. Grants will be required to be repaid if this condition is breached. V Approval Times and Extension Requests 28 Grant approval times should be for no more than one year from the date of approval. 29 Boards can consider requests for time extensions for grants if these have been received by Boards before the expiry date. Requests for time extensions should be approved in exceptional circumstances only with applicants outlining the circumstances outside their control which have led to the extension request. The maximum time available for extensions is six months. Dated at Wellington this 6th day of December 1995. ROGER F. H. MAXWELL, Minister of Business Development. Explanatory Note This note is not part of the notice, but is intended to indicate its general effect. The effect of this notice is to introduce the Government's new Business Development Programme. Business Development Boards are to administer the programme in accordance with the Code. The Business Development Programme consists of the following components. a An information component b A business capability component comprising: [sp'ii']i a preliminary appraisal exercise; [sp'i']ii a business training educative element; iii a grant scheme; iv Business Best Practice education and recognition inititives including the Business Development Quality Awards. c A regional co-operation component. Provision of information The Board shall endeavour to provide relevant and timely information for small to medium enterprises relating to the overall economic and regulatory environment, New Zealand's trading activity and regional economy, techniques to improve business skills, and sources of advice and assistance for small to medium enterprises. Business capability improvement Preliminary business appraisal Designed to identify individual and business capability/skill and performance levels at a given point in time. This component will focus on eight business capabilities: business planning, marketing, operations management, financial and information systems, organisation and human resource management, product design/research and development management, quality and environmental management. The appraisal will be carried out by persons selected by the applicants. A grant of up to $500 (G.S.T. inclusive) may be provided. No grant will exceed 50% of the cost of the appraisal. Business Training/Educative component This will involve training/educative elements based on the skills/knowledge/capability gaps identified through the appraisal. Grant scheme Grant money will be available for activities in the following three areas: [sp 'ii']i innovation/research and development; [sp 'i']ii strategy; iii implementation. The grant scheme offers assistance on a 50/50 (ie, dollar for dollar) to a maximum grant of $50,000 for all time to any one applicant. Any grant for the innovation/research and development component shall not exceed $10,000 per annum. The maximum grant available per annum is $20,000. Grants are G.S.T. inclusive. Applicant criteria Applications may be made by any individual, business, trust, organisation, iwi authority or incorporation resident in New Zealand and registered for either income tax or gst purposes. Businesses employing more than 50 full time or full time equivalent employees are not eligible to apply. Companies operating a group structure, (ie, involving a subsidiary or subsidiaries) are deemed to be one person. The grant scheme is only available to those able to show that the goods/services they produce/provide already compete, or show potential to compete, in either domestic or international markets. This is confined to those selling or intending to sell in overseas markets and those selling in competition with imports. Applicants will have to satisfy their Board that they wish to test or apply a skill that they have acquired. Transitional provisions The rights and obligations attaching to grants under the previous Business Development Programme continue unaffected by this notice. 200