Research Report: "New Zealand E-Government and Business Compliance Cost Reductions"

This is a 350-page qualitative research report into the reduction of business compliance costs through e-government in New Zealand. The research employs the 'grounded theory' research method as well as numerous interviews across all levels of government and a cross-section of professional firms.

This report was authored by Stefan Reucker. The report was first published in 2006 and updated for 2010 for the second edition of the report.



E-Government article published in Gauntlet Magazine: "E-Government" is an article written by Stefan Reucker and published Gauntlet magazine, issue 2, November 2009.

Gauntlet Magazine, Issue 2, November 2009This report was authored by Stefan Reucker, however, due to clerical error the author is printed as Stefan Reuker.

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Surveillance Bill article published in Gauntlet Magazine: "Gauntlet magazine, issue 2, November 2009.

Gauntlet Magazine, Issue 2, November 2009

Download PDF click here

The publication's website; Gauntlet



E-Government Services

Advice on E-Government Services

Managing for E-Government

Research into E-Government

Software Development for E-Government

Usability of E-Government

E-Government Consulting


E-Government Links:

Government ICT Directions and Priorities



New Zealand E-Government

by Stefan Reucker

New Zealand Public Sector Reforms

The New Zealand Government In 2001, in its effort to become a world leader in e-government, undertook a review of public services management in the form of an advisory group. Their report, entitled "Review of the Center", analyzed government departments and provided a number of recommendations for public sector restructuring.

The reforms made to the state services sector included:

  • More seamless face of government

  • Technologically sophistication and e-government

  • Fewer agencies that are better aligned and connected

  • Purposeful collaboration with stakeholders including citizens and business

  • Proactive leadership from government

The reform of agencies has pre-occupied the State Services Commission (SSC) which is entrusted to manage e-government implementation in line with legislation and government vision dating back to 2001.

It was envisioned that the reformed public sector model should be citizen focused, relationship based, balanced, collaborative and technologically sophisticated. The reformed model should provide for new service delivery, tackle fragmentation of departments and agencies, and improve the State sectors people and culture.

The government management style of public service agencies was to be outcome oriented, people-centric, and encouraging collaborative arrangements among and across agencies, and including regional and local authorities in e-government programs of central government agencies and departments.


The Government of E-Government

The SSC is responsible to provide the vision and leadership for all government departments in reforming public services management. To drive through the reforms of the Review of the Center, it became paramount to bring all government departments into the information and communications technology age. To achieve this goal the SSC created the "E-Government Unit" (EGU), which is overseen by an E-Government Steering Committee, under the supervision of the SSC.

The EGU helps departments and agencies to modernize all operations and services through ICT. The EGU uses as one of its guiding models for e-government integration into departments, agencies and councils, the "electronic government interoperability framework (e-GIF). The e-GIF is the reference guide for reforming government agencies in terms of governance, management, organizational culture, business processes and technical standards.

At the same time the e-commerce action team (e-CAT) was created as well, to assist in the implementation of e-government by creating the physical infrastructure and systems necessary for electronic services.

The SSC, through the EGU and e-Cat built and operates the shared infrastructure used by agencies across government. This include common policy and standards frameworks such as the e-GIF, and shared information and technology resources such as the all-of-government web portal located at

The SSC manages agencies e-government development by providing them with, the vision, direction, strategy, program, frameworks, standards, architecture, infrastructure, support services, integration, facilitation, coordination, for e-government initiatives and public service improvements.

The central government provides the all-of-government vision, context and shared infrastructure, vital to the e-government efforts of agencies. Ministries and agencies, as well as councils, consult with the SSC closely, to ensure that their organizations align with the "e-government strategy", and also to ensure that the e-government initiatives that they would like to have approved are being developed in accordance with mandatory public service and e-government requirements for councils, agencies and government departments.

All e-government projects must be approved by the SSC in the context of the "Managing for Outcomes" and the "Statement of Intent" process. In this way, the SSC can ensure that e-government is being used to improve agency performance in delivering improved services and achieving outcomes. New Zealand guidelines for managing IT projects are provided by the SSC and Treasury.

Government agencies need to provide a thorough cost-benefit analysis to the SSC and Treasury for project approval. The Treasuries decision to approve of a particular e-government project, including individually or as cross-agency initiatives, depends on the net benefits of each initiative. CAB Min (02) 8/2A requires each e-initiative to show positive net benefits (social, economic and financial), including positive fiscal gains where possible. Apart from the Treasury, the IRD and Ministry of Economic Development (MED) keep track of departmental accounts and business case analysis. The MED is also informed about public-private collaborations.

There seems to be a weakness in the area of measuring the cost-benefits as they apply to affected stakeholders. Government agencies and local authorities do not currently account and measure the cost-benefits for stakeholders that use or are affected by e-government systems. Though cost-benefits for stakeholders are conceptually and theoretically projected in the business case, and later anecdotally confirmed by users, there are no systematic figures or accounts kept on stakeholder impacts. Agencies and local authorities have an interest in learning how to better account for stakeholder cost-benefits, cost-benefit comparisons of service delivery channels, and how to best account for collaborations between multiple-agencies based on shared-services.

The SSC is responsible to the Office of Auditor General, Cabinet, Treasury and Parliament. The Office of the Auditor General monitors the SSC and reports on EGU performance and progress. Parliament is frequently concerned with what public services are being supplied. Cabinet liaises with the SSC and EGU on aspects of policy implementation, and sometimes Cabinet issues instructions, for example when Cabinet instructed the EGU to make all e-government projects comply with "web accessibility standards".

The public sector reforms require that all government bodies under the SSC strategically align their operations with the e-government strategy. The E-government Strategy is an all-of-government strategy that applies to all arms of government including local government.


The E-Government Strategy

By June 2007, networks and Internet technologies will be integral to the delivery of government information, services and processes.

  • Many services will be fully or partially delivered electronically (where appropriate)

  • Traditional service delivery channels (counter, postal, telephone etc) will continue to exist but will be enhanced by the use of technology

  • Front-office integration will be well developed - many services will have been redesigned and bundled together in ways that meet customers' needs better

  • Back-office integration will be advancing through adoption of the interoperability framework, and progressive build of components of the service delivery architecture.


By June 2010, the operation of government will have been transformed through its use of the Internet.

  • Service delivery will be more proactive. People will allow agencies to use information they hold to "push" services out to them (e.g. reminding people to meet an obligation, or advising of an entitlement)

  • Agencies will have redesigned the way they deliver services - traditional channels may be used less, in favour of the Internet which will reach most New Zealanders, and often be more convenient for them

  • People will have more choice about who delivers them a service - they might select from a range of agencies, intermediaries, or even private sector providers

  • Cross-agency service integration will be the norm in government - standalone services will exist only where there are strong reasons for not integrating them

  • Services will be increasingly targeted at individuals (people or business), based on their personal circumstances. The range and design of services that agencies provide will be more flexible, and more valuable to customers

  • The back-office of government will be widely shared - there will be much less investment in agency or service-specific technical, information, and business process infrastructures. Better value for money will be achieved.

The SSC strengthens the e-government strategy by making clear the principles for e-government and strategies that deliver net benefits for different citizen groups (individuals, business, government). The e-government strategy is monitored and revised on an ongoing basis and as required.

Strategic assumptions, risks and mitigations as well as the role of the E-government Unit and general principles that guide the development of electronic service delivery are all included in the content of the general E-government strategy.

The State Services require and invite the active involvement of all stakeholders in society, such as government ministries, agencies, regional and local authorities and councils, the business community, and the public, to share in the development, conduct and governance of public sector reform through e-government. The main method used for working together across agencies and private sector organizations from the business community, is through stakeholder Working Groups.



"E-government refers to the systematic use by government agencies of Information and Communications Technologies (ICT) that have the ability to transform relations with citizens, business and government."

E-government is a way of tapping unrealized potential for high quality government in New Zealand. It enables government agencies to separately and collectively lift their performance and deliver better results through using information and technology in new, more collaborative, ways.

E-government in New Zealand is a phenomenon that started in the late 1990's when the government formally began to investigate the possibilities for introducing e-commerce technology to deliver electronic services to the public.

E-government has become of increasing importance to governments internationally in their drive to modernize their public services, reduce government administrative costs, create a good business environment, and be an attractive destination foreign investment. In addition, other benefits anticipated were; - improved public service management, new service delivery channels, new service innovations, increased government transparency and trust, fiscal savings, business compliance cost reductions, revenue growth, and increased democratic participation.


The E-Government Development Path

From Information to Transformation

The governments e-government strategy envisions an evolutionary approach to e-government implementation, starting with publishing government information online, followed by the provision of online interactions, facilities for online transactions and public-sector service transformation.

E-government reshapes the relationships between government, individuals, and business. Information, service delivery and government processes are being integrated across traditional boundary lines between ministries, agencies, councils and select private-sector partners. Government information and services are accessible through a single web portal. Information and services are increasingly customized to the particular needs of individuals and businesses. Democracy and opportunities for participation in democratic processes will be improved.

E-government is not merely automating traditional public service business processes. Each project is taking into account a much wider perspective based on business process reengineering, and flow-charting process improvements, and entirely new processes to improve the effectiveness and efficiency of public services. This is done to help innovate new services, and to remove no longer required old inefficiencies, while taking advantage of the new possibilities based developments in information technology, as well as e-government standards and New Zealand legislation.

The values e-government needs to provide excellence in are:

  • Public participation
  • Public accessibility
  • Public trust
  • Public accountability
  • Public transparency
  • Public safety
  • Public service effectiveness
  • Public sector efficiency

E-government is best understood in the context of:

  • the Government's broader goals to improve public management
  • what people and business want from e-government
  • public sector ethics, values and standards; and
  • new thinking about how service delivery should be electronically enabled

New Zealand e-government had to evolve in successive stages before it could reach a level of maturity, i.e. technological and organizational readiness, before it could begin the next project, which is to look outwards, at the possibilities for collaboration and shared consultation with business and industry.

Business and government collaboration is relatively new to public sector departments and their staff based on their traditional model of enforcement and control. The E-government Unit works with business focused agencies to ensure e-government initiatives are coordinated to deliver the maximum benefits for the business community.


International E-Government

The United Nations provides international e-government development assistance in the form of international technology and data standards, e-government service frameworks, e-government good practice guides, and international e-government assessments through global surveys.

The OECD provides a forum for countries to exchange information on e-government. New Zealand has formed e-government partnerships with, - Australia, Canada, Singapore, South Korea, United Kingdom, Finland, Denmark, and the Netherlands; as they are deemed global leaders in e-government.

The global to local business compliance relationships, that are underpinned by e-government management and infrastructure, are depicted in the diagram below.

Business Compliance:  Business, Government and International Relationships - Diagram is the copyright of Intellia Ltd.  Copyright 2010.


E-Government Technology

The Information technology and software applications used by the public sector and those found in the business community, especially large enterprises are largely identical. It is paramount that public service IT systems are compatible with the technology used by the population, the national business community, and that of large corporations and other OECD member countries. New Zealand has been able to buy into the latest technology trends, and to put the latest e-government services in place, but the real issue for economists is the productivity return on our e-government investments.

Productivity improvements depend on the way technology is best used, that is what will make the difference in competitiveness and innovation.

The public sector has different responsibilities for the provision of services from the private sector. The private sector is motivated by factors such as profitability, market share, brand recognition, and customer loyalty. Government takes an institutional approach to systems development based on promulgating standards and generic technologies. The public sector is driven by the political directives expressed in public service outputs which accrue to society.

The areas where government service requirements exceed that of the private sector include:

  • Ubiquity of Service
  • Equal Accessibility
  • Trustworthiness
  • Confidentiality

For the purpose of highlighting the efficiency gains made through e-government, I have listed the most commonly used e-government technology components alongside the previous method used to provide the public service.


Benefits of E-Government Service Delivery Components

Technology Components:



Past Service Delivery Method and associated Costs and Problems:

Online Registration & Enrolment

  • Mailing
  • Paper Handling
  • Slow Processing Time
  • Human Errors

Secure Digital Authentication

  • Face-to-face meeting at an agency office
  • Personal verification of physical identification documents.

Online Transaction Engine

  • Staff handling of service requests for information and transactions by telephone, mail or office visitation. Manual transaction of documents and money.

All-of-Government Web Portal

  • Staff handling of government enquiries to guide user to appropriate government agency or print publications.
  • Visiting or telephoning different agencies and ministries to get access to information and services.


  • Newsletter mailing costs. 
  • Newsletter advertising costs in print media.


  • Manual lodgement of bank payments into government held business accounts. 
  • Automatic bank account payment transfers of standard sums, requires refunds or remainders to settle final account.

Secure E-Mail

  • Courier delivery of confidential documents requiring face-to-face verification and manual signature

Help Tools

  • Telephone customer enquiry or office enquiry
  • Print publication of help manuals

Alerts Engine

  • Collating and Mailing of due notifications.

RSS News Feed

  • Limited news information print published, no breaking news.
  • News publications only weekly, monthly, quarterly, annually.

Search Engine

  • Highly qualified and experienced long-serving staff giving personal advice over phone or office enquiry.
  • Print published indexes of official publications.

Groupware and Workflow Management Systems

  • Physical meeting, and travel costs, meeting room, plus projector, and manual note-taking and individual redrafting of sections and iterative development based on manual comparison of paper document versions.
  • Time consuming and expensive process, not very effective by comparison.

Discussion Forums

  • Writing and mailing a letter for departmental or electoral representative to bring forward issues and responses on behalf of the constituency.
  • One-to-one mail traffic or telephone.
  • Public campaigning on issues, or protests

Interactive Online Forms

  • Complexity of filling in forms sometimes required intermediaries or advice
  • Lengthy paper forms
  • Multiple paper forms to complete for different agencies

Download Templates

  • Mailing of office forms on customer request.  Easily costs 3-7-day waiting period for return mailing completed form.
  • Online forms that need to be printed and mailed back to agencies manually.

Expert Wizard

  • Access to trained and qualified staff that can provide step-by-step assistance.
  • Step-by-step printed reference guides, or online published step-by-step instructions.

Online Video

  • Requests for access to agency provided video tapes or DVDs.
  • No videos available of meetings and proceedings of agency decision-making, and agency public service events.


  • Physical meetings with team, including travel costs and conference room costs.
  • Difficulty in getting team members to meet at the same time, i.e. scheduling meeting.

Online Live Chat

  • Face-to-face meeting or telephone call.

Mobile SMS Messaging

  • Mailing, manual receipting at outlet stations or staff telephones message.

Online WAP pages

  • No mobile phone access to web pages and web portal.

E-Kiosk and "Free Internet" Hubs

  • Access to computer and internet connection required for online services or physical or telephone contact with agency staff.
  • Digital divide and access issues exclude some persons and businesses.

Online Wiki

  • Government print publications
  • Searching through government print publications
Single View Profile
  • Being presented with a lot of information and services that do not apply to the persons profile
  • Having to confirm ones identity to different departments and submitting same or similar information to different departments
  • Unable to customize user-interface to suit individual needs and interests.
  • Having to engage in interactions and transactions with departments separately rather than doing this over one single interface.

Important e-government technologies not listed in the above table pertain to the back-end technologies of government organizations in-house operations.

Although the technologies used in the e-government sector are largely identical to those adopted by the private sector, there are two exceptions 1) the governments data naming and labeling schema (Metalogue) which is particular to the global government sector, and 2) the secure single authentication system; an award winning software package developed by the SSC.


Public Sector back-end Technologies

Software Suites to help government Agencies develop Online Services

Interactive applications are available from the e-government unit of the State Services Commission, for ministries, agencies and regional and local councils, at no or low costs, in the form of customizable off-the-shelf software suites.

These applications include back-end management and electronic payment systems as standard features. It is neither costly nor complicated to setup, customize, implement and deploy the software the government has to offer. According to the latest study into e-government at the local authority level, many of the smaller councils score low on online "interactivity". It stands to question why so many councils in particular have been unwilling or unable to translate this quasi free and simple to deploy software and to convert it into user-friendly online e-government services.

The Authoritative Name and Address Register is a database storing every persons name and address, to be used by all public service agencies. The use of the name and address register has improved service quality, reduced name-address errors, detected fraud, reduced costs and improved overall public service efficiency.

The Secure Single-Authentication System has been developed to provide secure online single-authentication for all-of-government services. Secure single-authentication allows the user-interaction with government to be mass-customized, and mass-personalized. Mass-customized refers to the customization of the users view of online content. Mass-personalization refers to your profile, your preferences, your account history and it will provide you with access to all of your government held personal information.

The Metadata Schema / Metalogue Directory is a data naming and labeling schema that provides all the data the government receives and stores with a uniform data naming and labeling system, that harmonizes all classes of data for easy capture, routing, analysis, processing and storage by government computers, and computers across all national government agencies, and in those cases where required for international data reporting and data integration. The metadata schema informs what information is stored where and in what format, including business rules. The physical data is recorded in departmental databases, distributed-databases, and backed up into large scale government owned data warehouses and tiers of data marts that pool certain data sets before feeding them into the data warehouse.

Metadata and XML all metadata schemas are physically implemented using XML or a variant of XML such as XBRL for example in case of financial data.

XML is an international standard mark-up language for data messaging using pre-defined customizable XML schema. If the XML schema between systems match, it is possible to message data over networks, without the need to compile data files first and then using a file update procedure. XML makes data integration and data administration much easier, eliminating many task steps over conventional data exchange methods.

XML and Web Services are the most common technologies; they allow for interoperability. SOAP is also increasingly used to manage web services.

There are two ways to access e-government services, one is through the web, and the other way is through application software that can integrate and work with XML.


Public-and-Private Sector Software Development Collaborations

Software vendors can use the opening up of government information to create new software packages for the benefit of business. Vendors in collaboration with the government should be using web services and XML as the technology of choice to develop software products that help with the management of business compliance.

Examples of public-private sector software development collaborations for the benefit of reducing business compliance costs include, but are not limited to:

  • Payroll software, which is delivered as a shared-service, based on collaboration between the Department of Labour and Datacom Ltd (NZ), to process payroll tax. This software reduced costs to employers, ministries, and benefits professional intermediaries, while adding convenience to the customer experience.

  • SAP (NZ) enterprise resource planning softwares business compliance module that adds on to the ERP system to automate compliance reporting.

  • MYOB (NZ) accounting software which integrates well with the IRDs online tax filing service uses XML for data exchange which enables the software to maintain the integrity of accounting data and message it securely to the IRDs XML web-based tax filing system.

  • New Zealand governments secure single authentication system, developed by the SSC and built in partnership with Datacom Ltd (NZ).


Data Analysis of Government stored Records

Our government records are stored in data marts and data warehouses in a clean and logical fashion according to their metadata schema, and the records are thus identifiable by the Metalogue directory. This fulfills all the prerequisites necessary to perform computer-driven data analysis on the huge volumes of records transacted, stored and maintained by the government.

Data analysis can be performed on many levels using various tools and techniques such as statistical analysis, data mining, data matching, artificial intelligence of various degrees of sophistication and others.

A combination of data matching and the application of various artificial intelligence algorithms are employed to detect tax fraud for the Inland Revenue Department which keeps electronic tax information on all registered taxpayers.  In 2005 about 10% of New Zealand e-government services have some form of low-level artificial intelligence technology embedded, since then the percentage is likely to have increased as well as sophistication of algorithms employed.

Data matching has been a great success in detecting previous inefficiencies in public record keeping as well as in the detection of fraud. Under the old public service model every agency and ministry maintained their own information and transaction silos. For instance, when a convict served a prison sentence under the Ministry of Justice, the Department of Work and Income would not be aware of this fact and frequently continued paying the full social welfare rate to the prisoners bank account. Following a data matching exercise between the Ministry of Justice and WINZ this inefficiency was discovered. In consultation with the EGU, the two ministries decided to set up a shared-service between them that immediately informs either department of the status of the individual they are providing public services to.

Great fiscal savings have been achieved based on these exercises. The number of data matching projects has been steadily increasing. In 2004 there were 28 projects to match information across agencies, in 2007 there were 75 such projects.

The value of new possibilities derived from data analysis accrues to numerous stakeholders through out the information management value-chain. From the governments perspective, as shared collaborations, and public openness increase, there is a systematic effort to improve information and records management using the following vital criteria:

  • Systematic approach to share data and information across all agencies, and layers of government, where there is a justified need for stakeholders.

  • Completeness of records and information collections

  • Accuracy of data and records

  • Authenticity of users, data and information

  • Usability of online services and information

  • Security of transactions, communication and information including records.

These criteria are enshrined in the record keeping framework that is an important part of the policies and standards infrastructure provided by State Services.


E-Government and Legislation

A number of laws have been changed to provide the right legal framework and legal conditions to enable e-government, resolve any issues arising or surrounding it, and paving the way for an improved digital economy.

The Privacy Act 1993 is going to be revised to remove barriers for inter-agency information sharing. The Privacy Act will be reviewed in four stages over several years to remove barriers to e-government.

The Electronics Transactions Act 2002, one of the key changes in the Act is that transactions involving electronic communications will now have the same effect as paper based transactions.

The Act amends the legal definition of "writing" to include electronic records, recognizing that legal requirements relating to the giving of information in writing, signing documents and record keeping can now be satisfied by electronic means. The Act aims to facilitate business and government to take full advantage of the benefits of e-commerce. This includes the reduction of compliance costs, the removal of legislative barriers and the promotion of consistency between New Zealand and our major trading partners.

E-Government Surveys

National E-Government Survey Results

The State Services Commission has previously evaluated New Zealanders relationship with governments online services "qualitatively" as a part of measuring progress of e-government. The key qualitative reports include "Achieving E-Government 2004: A report on progress toward the E-Government Strategy" and "New Zealand E-government 2007: Progress towards Transformation".

The Kiwis & Government Online 2008 research is a "quantitative" survey that focuses people's actual use and satisfaction of government online services.

The latest results from this survey are tabled below:

Kiwis & Government Online 2008 Survey


Usage of NZ E-Government Services


Of the population use e-government online services


For finding information


For online tools and forms


For payments and 31% for applications


For submitting information or a return


User Satisfaction with NZ E-Government Services


Information provided online


Transactions provided online


Participation tools online


Other User Survey Results of NZ E-Government Services


Of respondents prefer e-mail for agencies to contact them


Of respondents were aware of online government services


Of respondents who had used government online services in the past 12 months would like a single-view interface based on their profile, and accessed using secure authentication. 92% of this group would like a single online point (web portal) from which they can all of government’s online services from on place.


Only of respondents could access all relevant agencies from a single online point (web portal). 44% had to interact with each agency individually or had a mixed experience 47%.


Vital National Statistics


Of NZ population have internet search experience (year 2008)



Of NZ households do not have an internet connection (year 2008)


Of NZ households have a broadband subscription (year 2006)

The survey asked users for suggestion on improving e-government in future. Users said that improvements need to be made to a) increase awareness, b) improve usability, and c) improve customer support.


International E-Government Survey Results

The United Nations "E-Readiness Survey 2008" measures factors such as, - service sophistication, - telecommunications infrastructure, and population literary.

United Nations E-Government Surveys




Government Readiness Index 2008


New Zealand


E-Participation Index 2008


New Zealand


Web Measurement Assessment 2008


New Zealand


New Zealands e-readiness rating has slipped from 13th place in 2005 to 18th place in 2008. This is largely due the fact that the Scandinavian countries have taken the top three places this time, while the USA, Australia and New Zealand have faced a relative rank adjustment.

The results might have been different had the government's newly upgraded advanced government portal,, been open in time for the UN report. The upgraded web portal now incorporates Google-like search functionality and other state-of-the-art web 2.0 features.

Quality and Relevance of Countries E-Participation 2008











South Korea




















New Zealand





One main conclusion to be drawn from the UN E-Readiness 2008, and Kiwi & Government Online 2008 surveys, is that New Zealand ranks well in terms of e-government services for e-participation and e-democracy but our relatively poor track record in broadband has held us back as a nation to ensure that the whole population has access the these vital public services and resultant social and economic benefits.


New Zealand Broadband Investment

Many countries around the world are investing in their information technology infrastructure to be able to take advantage of the opportunities e-government has to offer.

High-speed Broadband will enable e-government to provide better services to more New Zealanders. Broadband improves worker productivity, enables access to global markets, and increases opportunities for communication, research and collaboration. Without high-speed broadband, as a nation we will miss out on the benefits of the digital age, will fail to be technologically competitive, and will be greatly limited in our ability to present ourselves to, and engage with, the rest of the world.

Recognition of this important role of broadband is one of the fundamental drivers of the governments Digital Strategy. In the year to December 2006, New Zealand had one of the highest growth rates in broadband uptake in the OECD. However, as a nation we are still well behind our international counterparts in our adoption of broadband technology.

In December 2006, broadband subscriptions in New Zealand were just 14 per 100 people, and New Zealands overall OECD relative ranking was 21st out of 30 countries, between Portugal and Italy. In contrast, Australia was at 19.2%, the U.K. 21.6%, Canada 23.8% and Korea 29.1%. High-speed broadband has the potential to contribute to sustainable growth in our productivity by overcoming disadvantages of smallness in size and distance from markets.

In the next five years, the government is committed to delivering fiber-to-the-premise connections to businesses and public institutions (such as secondary schools, tertiary and research institutes, hospitals and libraries) in major centers, and significantly increased bandwidth connections throughout the entire country. For each of us, connection speeds 20 to 100 times faster than today will be the norm within a few years.

The government will invest at least $500 million into broadband infrastructure over the next five years, a down-payment on a ten-year plan to get fast broadband to New Zealand homes and businesses.

$340 million of this investment was announced as the first stage of the Broadband Investment Fund (BIF). This Fund will co-invest in urban and rural broadband and will help deliver an additional international cable. In addition to the BIF investment, $160 million will be invested in broadband across the health and education sectors over the next five years, lifting productivity and effectiveness.

The last three years have seen a complete shake-up of telecommunications regulation, to create a regime that encourages competition and investment. In all, the private sector has committed $2.5 billion in investment to 2012.

Investment in digital technology is needed to improve New Zealands productivity. But it is not just getting the right technology that will improve productivity and economic performance. We need to change attitudes and build world leading capability in the smart use of technology.


Broadband Goals of the Digital 2.0 Strategy

The Digital Strategy 2.0 sets out the digital content and network technologies New Zealand will be investing in, the key goals are:

By 2010:

  • New Zealand will rank in the top half of the OECD for broadband uptake, speed and coverage. All future networks co-funded by government to be based on open-access principles.

By 2012:

  • 80% of users will have access to broadband connections of 20 Mbps or higher and 90 per cent will have access to 10 Mbps or higher.
  • Open-access urban fiber networks will be operating in at least 15 cities and towns.
  • Terrestrial broadband coverage for 93% to 97% of the population.
  • Additional international cable.
  • That the last 3% of users have access to 1 Mbps (or more) broadband connections.

By 2018:

  • 80% of homes or premises will have access to fiber, or equivalent high-bandwidth capable technology.
  • 90% of users will have access to broadband connections of 20 Mbps or higher.
  • Map community, business and public sector demand for broadband.
  • Invest in widespread, fast, reliable broadband to meet demand from community, business and public sector.
  • Investors in infrastructure and internet service providers explore new services and business models that allow them to provide low-cost, fast connection with no caps on data.
  • Competitive fixed and mobile broadband markets.
  • Provide open access to networks, platforms and content.
  • Regulations and institutional structures keep pace with the converging environment.
  • Move to a fully digital broadcasting environment.
  • Move to Internet Protocol 6 (IPv6) internet addresses.

The Digital Strategy 2.0 contains a commitment to rollout a national network of digital hubs, building on the successful start made by the Aotearoa Peoples Network, which provides computers, training, and mentoring and internet access in public libraries. These hubs are a key part of the Strategys commitment to digital literacy, giving New Zealanders the skills and confidence to use digital technologies. Providing appropriate opportunities for people to create, share and use digital content is an essential avenue towards creating a digital society.

The digital divide, which leaves some sections of society isolated from all the improvements that have been happening, is presently still too great. There is significant stratification in access to Internet, broadband and digital literacy and access. Around 30% of households still do not have access to a computer at home, and 35% do not have access to the Internet. This compares to just 14% that do not have personal access to a mobile phone.

Social exclusion from a digitally divided New Zealand will continue to be a concern for government until all our broadband strategic goals have been achieved.


E-Government and Business Compliance Cost Reductions

Business compliance costs are inhibiting investment, competitiveness, business growth and innovation. It is the stated aim of government to keep compliance costs to a minimum for business.

The reduction of business compliance costs can be effected through development of appropriate political and business processes to generate a suitable compliance regime for stakeholders, one that is complemented by a suitable technology and information infrastructure, and exemplified by excellent public administration of business regulations, for ease-of-use, and financial savings in compliance costs for the business community.

Forces to loosen the compliance regime include the business community who has to bear the cost of compliance, as well as foreign direct-investors who may find their profits curtailed by cost of complying with regulations.

Compliance costs are the administrative and time costs of complying with legislation, as opposed to the substantive costs imposed by legislation. The most costly compliances in 2008 were reported to arise from the Taxation Act (in particular due to the added work of KiwiSaver managed through the Employer Related Superannuation Schemes), Health & Safety in Employment Act, Employment Relations Act, and Accident Compensation Act. Additional future compliance regulations may result from the introduction of the Emissions Trading Scheme via legislation this year.

Compliance costs are essentially the outcome of regulation. Therefore, decisions made in terms of introducing, amending or withdrawing any forms of regulation has a direct impact on compliance costs.

The business compliance costs associated with pre-existing legislations have been falling, however the introduction of new legislations (for example KiwiSaver), and other legislative changes, have increased the overall regulatory burden. The costs per full-time-employee (FTE) have decreased from $1,026 in 2007 to $728 in 2008.  But this is largely due to lower costs to large enterprises at the expense of smaller enterprises whose FTE has increased from $2,384 in 2007 to $3,106 in 2008 for a business with 5 employees or less.

While e-government cannot reduce the regulatory burden, nor influence the type of compliance regime New Zealand governments will implement in future, it can provide for highly efficient and effective services to reduce the costs incurred in managing to fulfill business compliance obligations.

Business compliance costs go beyond the effort required to complete a form and includes the time, effort or financial resources expended by persons to generate, maintain, or provide information to or for a government agency, including the resources expended for:

  1. Researching and reviewing compliance obligations, compliance instructions and related information, like articles on compliance issues that are relevant to the business.

  2. Acquiring, installing, and utilizing technology and systems.

  3. Systems development work required to adjust to changes in legislation that altered compliance obligations.

  4. Searching for information from various sources that provide it, sometimes for fee only.

  5. Completing and reviewing the collection of information

  6. Transmitting or otherwise disclosing the information.

A recent survey by KPMG shows that business spends about half of all its compliance costs on hiring outside experts to help the business with compliance work and compliance difficulties.

The government has studied business compliance costs regularly in the past; all the recommendations of a Ministerial Panels on business compliance cost reduction have since been adopted. 


New Zealand's business compliance cost reforms included:

  1. Mandatory "Business Compliance Cost Statements" (BCCS) to be created to clarify the compliance costs and distribution of costs incurred by legislations.

  2. Creation of a Regulatory Impact Analysis Unit, located at the Ministry of Economic Development, responsible for the development and implementation of the governments compliance costs reduction package, as well as recommendations for, - widespread implementation of e-government services.


The Ministerial Panel on Business Compliance Costs other specific recommendations included:

  1. Urgently progress a web portal-based "one-stop-shop" for business, supplemented by fax and phone access.

  2. Enact the Electronic Transactions Bill at the earliest opportunity and promote its compliance cost reduction benefits.

  3. Amend E-Cat terms of reference to include a specific provision for reducing compliance costs through the use of electronic technology.

  4. Educate and encourage business to interact with government online.

  5. Require government departments to develop key performance indicators that demonstrate reductions in compliance costs through electronic interaction with business.

  6. Incentivize small business to install and use on-line technology.


In public press statements, the government has announced its e-government achievements as a success:

"The Government is confident that all the most significant recommendations have been implemented, capturing at least 95% of potential benefits in terms of compliance cost reduction."

One of the first e-government initiatives was to create an all-of-government web portal. This development was followed by the introduction of BIZ Online, which has now been replaced by a special business-friendly portal that helps users will all manners of business information, business advice, and in particular business compliance support and advice, for any business in New Zealand. BIZ which is also found on this portal gives special personal guidance to businesses, and it provides an excellent call-centre facility as well to make telephone enquiries.

Over the past five years more e-government services have been deployed than the majority of the business community and the public is aware of.

Insufficient advertising and public promotion of e-government services has often been cited by past studies, as inhibiting the uptake of e-government services, which in turn means that the maximum economic benefits for government and business alike cannot be achieved fully.

Economies of scale cannot be achieved fully unless the vast majority of the population uses government online services. Each agency requires enough user uptakes to make their e-government services economical. Some departments have gone as far as requesting the government to change legislation to enable them to mandate certain digital services be used to the exclusion of other service channels traditionally available.

The SSC persistently rejects mandatory uptake measures; however the uptake issue does need to be addressed.

Perhaps the answer lies with the financial arrangement agencies have to work with. Agencies are self-financing their e-government services, and this means that they have to sacrifice part of their departmental budget to manage and pay for advertising and promotion of their online services. Agencies need to make the best economical choices available to them and advertising and promotion is usually targeted at key customer groups, professional associations, professional intermediaries and mail out campaigns. Few departments want to spend their budget money for a national television advertising campaign of their online services.

A national broadcast campaign to promote online government services would likely be sufficient to raise awareness of government online services from the current 44% of population to as much as 80-90% of the population. This would create a substantial stream of public sector fiscal cost-savings and compliance cost benefits to the business community and hence overall economy.

Judging by the process improvements in business compliance management due to e-government services, over the traditional service channels like paper documents, office visitations, and telephone enquiries etc, cost savings of 70-90% have been achieved, with some processes being completely eliminated due to cross-agency shared service efficiencies. Increased user uptake of e-government services will allow for increased savings for everybody, last not least the taxpayer.

According to the E-government Unit, business compliance cost reductions were achieved through:

1. Investments in technology

2. Simplification of processes.

Perhaps more could be achieved if the government were to add

3. Advertising and promotion.

It is becoming increasingly more important to inform the public of the great opportunities available to them as customers and benefactors of public services sector, one that values democratic involvement, and embraces a new paradigm "user configures system". E-participation will change the role of government and is many agencies by being more of a facilitator of the publics democratic voices, and having to be accountable and responsive to them.

E-government offers a wide opportunity for allowing the public and the business community to "configure the system" and its services, by openly inviting feedback, new service innovation ideas, stakeholder participation, consultation and collaboration opportunities across the board. It is essential that e-government is built from the bottom-up, by the people. New Zealand has scored especially high in e-participation and e-democracy services in the last global annual survey.

We have all the possibilities available to us to build a bright e-government future; the rest is up to us.


Stefan Reucker

(Intellia Ltd, Auckland, January 2010)



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