They suggest that DRM vendors should be forced to disclose all the workings of their DRMs, limit the way that their DRMs communicate with the rest of the world, work even when the Internet is down or the vendor's gone out of business, and so on.
They also call for the creation of a Ministry of DRM that keeps keys and master documents for everything the government puts under DRM, and suggests that this ministry should police all DRM use within government.
One thing that's notable by its absence is any discussion of DRM and open source. While New Zealand's official policy is to encourage the use of open source in government, the consultation (which was fed by MIcrosoft, HP and IBM) makes no mention of the disastrous impact of DRM on open source.
DRM relies on its owners not knowing how it works and not being able to change how it works. If I give you a song that can only be played on five computers, it defeats the point if you can change that to 50,000 computers. But the point of open source is that it is better for society, individuals, and competition if anyone who cares to can discover how her tools work, improve those tools, and publish her improvements.
By deciding that it will accept DRM over its threshold -- instead of using traditional proven security and open standards -- the New Zealand government is setting up a situation where New Zealanders and NZ businesses will have to license software from foreign software companies before they can do business with government.
If you're an NZ programmer and want to make software to help your neighbors work with the documents that your government publishes, getting into the DRM will require you to close your source, license secrets from foreign DRM vendors, and submit to a "compliance" system that makes sure your work meets the business-priorities of foreign companies.