12 DECEMBER 2013

NEW ZEALAND GAZETTE, No. 167

SOUTHLAND MILK VENDORS ASSOCIATION
INCORPORATED 225521.

SPELD ASSOCIATION FRANKLIN
INCORPORATED 224682.

ST ANNE’S CLUB FOR THE BLIND
INCORPORATED 224869.

ST. ANDREWS COLLEGE CRICKET CLUB
INCORPORATED 885971.

THE SCHOOL OF CONTEMPORARY BELLY DANCE
INCORPORATED 1641871.

THE SUSTAINABLE BUSINESS COUNCIL
INCORPORATED 971546.

4549

WELLINGTON HOG RALLY 2009 INCORPORATED
2151228.

WESLEY RUGBY FOOTBALL CLUB
INCORPORATED 1883333.

ZEN DO KAI TARANAKI INCORPORATED
1899987.

Dated this 12th day of December 2013.

NEELUFAH HANNIF, Assistant Registrar of Incorporated Societies.

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Departmental Notices

Business, Innovation, and Employment

Crown Entities Act 2004

Direction to Callaghan Innovation—Co-funding Guidelines

Under section 103 of the Crown Entities Act 2004, I direct Callaghan Innovation to give effect to Government policy as specified in this direction.

INTRODUCTION

In this direction, I set co-funding guidelines for Callaghan Innovation to apply when determining how to charge for its services.

PURPOSE

Callaghan Innovation’s mission is to accelerate commercialisation of innovation by firms in New Zealand. Callaghan Innovation does this through:

• services that foster a stronger culture of innovation;
• services that build firms’ capability and connection to resources across the innovation system;
• providing demand-driven in-house research and technical services in niche areas of need; and
• commercial services for the direct benefit of firms.

These co-funding guidelines will ensure transparency and competitive neutrality for New Zealand domestic recipients of Callaghan Innovation’s services. The guidelines set a floor (rather than a ceiling) for the prices that Callaghan Innovation sets, but they also provide some initial flexibility to support Callaghan Innovation to grow commercial revenue while delivering wider benefits for New Zealand through its public good activities. The co-funding rates are intended to apply to domestic revenue, with any overseas revenue expected to be priced to achieve a full return on capital and at the maximum level the market will bear.

The co-funding guidelines are comprised of three parts:

1. Principles agreed by Cabinet in 2012 when Callaghan Innovation was established;
2. practical considerations that have been developed to ensure that prices are sensible and reasonable; and
3. indicative co-funding rates for each main category of service.

POLICY PRINCIPLES

The following policy principles apply to the charging of services:

• With respect to Callaghan Innovation’s commercial activities, the funding model should create incentives for the institute to grow commercial revenue and reduce its overall reliance on government funding over time.

• The funding model for contestable services should be broadly consistent with the principle of competitive neutrality to avoid crowding out other (public and private) providers.

• Funding sources for Callaghan Innovation functions, and their associated services or activities, should recognise the different blend of public/club/private good characteristics associated with those functions.

• The funding model should be consistent with the on-going financial viability of the institute, including with respect to building and maintaining capability to deliver services into the future.

PRACTICAL CONSIDERATIONS

There are a number of practical considerations that need to be taken into account when deciding on the co-funding rates to apply:

• Significance: Where the amount of expenditure on the service is likely to be small, the development of a formal co-funding regime is not warranted. There may, however, be merit in making a charge to avoid frivolous use of the service or to recover some of the administration costs for events and information dissemination.

• Alignment with NZTE: In November 2012, Cabinet also considered the alignment and coordination of service delivery by Callaghan Innovation and New Zealand Trade and Enterprise (NZTE). While they have distinct functions, both will be involved in the delivery of business development services. Some alignment with NZTE’s co-funding rates should be sought where there are overlaps or similarities with the services Callaghan Innovation is providing. For example, both organisations should adopt a “no-wrong-door” approach when engaging with firms and there should be consistency across common programmes such as the “Better By...” series and information provision.

• Firm engagement process: NZTE has adopted an approach where it introduces charges for services once engagement with firms has proceeded and it has offered specific services. In the initial phase of engagement, firms are not charged while the parties.