Nash StuartHon STUART NASH (Minister for Economic and Regional Development): Thank you very much. I mean we've got great economic development progress in front of us. There's a whole lot of work that needs to be done and we're up for it.But let me answer the chair's specific questions to start with. What we found during COVID is that businesses that were digitally enabled had an immediate advantage over businesses that weren't digitally enabled. What McKinsey & Company—which is an American consultancy—found in the States which I think is probably mirrored in New Zealand is that there was about five years' worth of digital enablement compressed into eight weeks as businesses sought to be able to generate revenue through some way shape or form. This happened in New Zealand through the click and collect. But what we found is that we need to move forward in terms of digital enablement.There's something called the digital adoption curve. It's your stock standard bell curve. But that's been turned on its head as businessmen and women who in the past would have no interest in digital enablement because they've been doing something the same way for years and as far as they're concerned there was no place in their business for digital technologies have now found that in fact in order to do business in this country you need to have some form of digital competency. I used to say before COVID but certainly this has amplified since COVID that I truly believe that this will be the last generation of small-business owner that will survive let alone thrive without being digitally enabled. The reason I say that is everything we are doing every innovative thing we are doing across Government to support business is based on a digital platform whether that's paying your taxes through Business Transformation in Inland Revenue whether it's through procurement whether it's through e-invoicing the New Zealand Business Number it all rests on digital platforms.But we do also recognise that there are a number of small-business owners that in fact have not started on that digital journey and are not too sure how to start on that digital journey. So we've set up something called Digital Boost—$44 million in the Budget—and it is a fantastic programme. Actually it's more a project where there are a whole lot of videos online that business owners can jump into at any stage of their digital journey right from the very beginning all the way through. They can do it in their own time in their own space. There is a support team that they can call to get answers if they're a little bit stuck. One of the things that's made it so successful is there are a whole lot of case studies online from people like Stan Walker for example; Ardie Savea; Julian Savea—I think it's Julian Savea actually who's a small-business owner himself— Mils Muliaina; you know these iconic New Zealanders who are actually small-business owners in their own right. They're on board saying You know what. This is a great innovative effort. Jump on board. Have a look. It's easy. Do it in your own time."Because what we do know is if we ask people to turn up to classrooms or we provide a whole lot of esoteric products then people aren't going to turn up. It needs to be done in their own time. So one of the major drivers in the small to medium sized enterprise (SME) sector for this term is that digital enablement. So far over 25000 businesses or people individuals have taken it up and it's spreading. But this is vitally important for businesses to operate in the 21st century. As we have heard today you know COVID is not over as far as we're concerned. Businesses need to be ready just in case but they also need to be able to drive efficiency. This is what this will do. It's not necessarily about employing more people. It's not necessarily about increasing productivity. It's just driving efficiency. Craig Hudson for example the CEO of Xero has said that you know a lot of his clients—this is the same for MYOB and other accounting practices I must say. But Craig Hudson has said that all the businesses on the Xero platform create a whole lot of data but very few businesses actually use those data to make informed business decisions. So digital enablement is really important.You talked about the ITPs. So there are seven ITPs; these are industry transformation plans. These are areas where we believe as a Government we can do a whole lot better whether that is driving productivity whether that is increasing or gaining some form of global competitive advantage but it's working with key stakeholders iwi Government of course key stakeholders bringing them together in a dialogue around how we can do things better. Now we've allocated a lot of money for this in the Budget. It's a very serious process. Out of this will come a series of recommendations around driving productivity growth gaining some form of competitive advantage and being where we need to be as a nation positioning us forward. Because one thing we have done and one of the first things I did when I took over this portfolio was to say "What is the role of Government in driving economic growth and does the Government actually have a role in terms of driving economic growth?" I quickly came to the conclusion that in a country of 5 million and certainly in the COVID environment we have a really important role of getting those settings right so businesses can be as good as they possibly can.In the ITPs we've got the construction sector we've got AgriTech we've got advanced manufacturing we've got food and beverage we've got forestry and wood processing and we've got tourism. All these areas are areas that we know we are experts in. These are areas that we can do better. We have global competitive advantages in some of these.I mean food and beverage for example—you know we go to the world with what I think is one of the iconic brands. The reason why the primary sector is doing so well in a COVID-affected world is because people trust the integrity of "Brand New Zealand". Now what we must do though is leverage off that brand and do better capture more along that whole supply chain and determine what parts of that supply chain we need to own where we can do better where we can mechanise and how we can really enhance that global competitive advantage.Forestry and wood processing is an area that I'm in charge of obviously in another portfolio but again that is an area where we are about to become the world's largest exporter of logs. Now we believe there is an absolute potential to capture so much more margin and value down the supply chain. But at the moment it's not happening. So we've gathered a whole lot of people together and said "What do we need to do? What incentives do we need to put in place? What settings do we need to change in our economy? What incentives do we need to put in our economy that will allow us to process more logs into lumber that goes into our market as opposed to sending logs offshore?" If it was simply a matter of importing timber offshore—Hon Todd McClay: Most of the ones we export don't go to lumber do they?Hon STUART NASH: —then the world would be an easy place. But we want to cut up a lot of these logs like we do in your neck of the woods Mr McClay. I mean the interesting thing is actually the largest investment into wood processing is in New Zealand in Red Stag Timber and we've supported them. It's fantastic. But we need to ensure that the settings are right so those who want to invest in wood processing can do it. Hence just one of the examples of the industry transformation plans.Now the other point you mentioned the other question around procurement—so the Government spends about $51.5 million a year. Of course we're the largest spender in this economy—Hon Todd McClay: A billion dollars a year.Hon STUART NASH: —a billion dollars a year sorry. We need to ensure that we get this right have a sense of transparency in how we're doing this but also to ensure that it meets a lot of our wellbeing targets and our objectives and our philosophy as articulated by our Minister of Finance and Prime Minister.Now at the moment I'm not 100 percent confident that we are getting best value for money. In the past what's happened—and the Hillside workshops are a classic case—is Governments have said the lowest price gets the tender. You know from some sort of metrics you could say "Well that makes sense." But as we often know the lowest price is not necessarily the best price and Hillside is a classic case. The previous National Government decided we're going to scrap Hillside we're going to buy a whole lot of trains from China. A whole lot of trains from China they came in they were filled with asbestos—CHAIRPERSON (Hon Jacqui Dean): Order! Order! I'll ask the Minister to stick to within the scope of the Estimates debate.Hon STUART NASH: OK. Thank you. So what we want to do with procurement is actually be a little bit more targeted to ensure that all our communities actually benefit from Government procurement. A classic case is—you know this is a hypothetical case but it goes to the point—for example if the Ministry of Business Innovation and Employment went out and said "We want to do a national catering contract." then there would be very few businesses that would have the ability to actually take on board a national catering contract. But if we chunk it down into the regions then what we do is we empower a whole lot of SMEs to actually get involved in Government procurement and be part of the whole system which will allow us again to empower SMEs empower regions and drive growth in a way that has benefits over and above the pure cost one. As mentioned just because it's the cheapest it doesn't necessarily mean it's the best.So we've been looking at things like apprenticeships. You know who are the owners of these companies? We've already been very clear. We want to empower Māori SMEs to be able to be in a position where they can bid for these contracts. We want to empower SMEs so they can be part of the whole procurement process as well because we believe that the Government can be a really strong enabler in the Government procurement space to drive the sort of changes in our economy as well. A classic case is Minister Shaw and I co-chair the carbon neutral State sector 2025 drive. That is a classic example of using Government procurement to drive the sort of outcomes that we believe are necessary to be as good as we possibly can be.The last thing I'll mention to that is Government procurement—Hon Gerry Brownlee: Give us one example.Hon STUART NASH: I'll give you an example Mr Brownlee. Thank you very much for the opportunity. Any building that is built by the State or for the State over $9 million we have said it must be built from the lowest-carbon product. So it's basically a wood-first policy. It is fantastic because it will make sure that we walk the walk. If only you had built Christchurch back in wood it could be a 21st century—CHAIRPERSON (Hon Jacqui Dean): Order!"