Outcome 1: Improved Overall Economic Performance
The Treasury brings an overall perspective, including interests in institutions, macroeconomics and microeconomics, to advise Ministers on what really matters for New Zealand’s economic performance - with a principal focus on sustainable growth.
Our focus is on pervasive and significant economy-wide issues – the issues that span and influence many markets and decision-makers and are more likely to have a significant impact on economic performance. Coming to a view about the best role for government in these areas needs to be based in sound comparative institutional analysis – how well we would expect different institutional arrangements (eg, rules, or markets, or government agencies) to work in practice, in terms of addressing the presenting problems, and increasing overall economic performance.
Key priorities for the 2006/07 year
The priority areas for 2006/07 were: international connections; skills/education attainment; competition/ regulatory frameworks; financial markets; firm productivity; and business tax review/international tax.
In addition to these, the areas of Auckland and Transport are also reported on. This is due to the Treasury moving significant resources into areas of additional priority for the Government.
Output delivery
The results contributing to the Improved Overall Economic Performance outcome are delivered directly through the following outputs:
- Policy Advice: Tax
- Policy Advice: General Economic and Fiscal Strategies
- Management of Claims Against the Crown, Contractual Liabilities and Crown Properties
- Ownership and Performance of Crown Companies and Financial Institutions
- Policy Advice: Regulation and Vote Purchase, Ownership and Performance Issues.
- Detailed information relating to individual output classes can be found on pages 24-44.
International connections
This result area has two main aims. The first is that domestic policy settings give effect to government decisions and support international connections that are important for economic growth. The second is that Ministers have advice on policy priorities and efficient practical options to deepen the international connections most important for growth.
The output class that contributes to this result area is Policy Advice: Regulation and Vote Purchase, Ownership and Performance Issues.
| Key Results Wanted Over 2006/07 | Key Indicators of Success for 2006/07 | Achieved? |
|---|---|---|
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We lift our understanding of the international resource flows that affect New Zealand’s economic performance. We identify areas for more in-depth investigation in 2007/08, with a view to prioritising the assessment of current policy settings in specific sectors, and developing options for changes to policy where our research indicates potential gains in economic performance.
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Key sectors are identified for further research, analysis, and policy development. |
Yes. We have determined three priority areas for further work, with the possibility of adding further sectors for investigation before the end of calendar 2007. These are: “Hollowing out” – whether the relocation, and change in ownership, of economic activity presents any detrimental impacts on economic performance, and whether policy adjustments might ameliorate these impacts. Immigrants’ labour market outcomes – whether changes to the profile of the preferred migrant could improve immigrants’ labour market outcomes. Export of education services – whether there are important connections between the export of education services, and the international transmission of knowledge and innovation to New Zealand, and whether current policy settings optimise these transfers. |
Skills/Education attainment
The overall result we were looking to achieve in this area is that government decisions are implemented to improve outcomes from schooling.
The output class that contributes to this result area is Policy Advice: Regulation and Vote Purchase, Ownership and Performance Issues.
| Key Results Wanted Over 2006/07 | Key Indicators of Success for 2006/07 | Achieved? |
| We build the Treasury’s knowledge of patterns and trends in education outcomes, and of “state of the art” in schooling improvement and school reform literature. |
Outcome data (including gender, ethnicity and socioeconomic dimensions) is reviewed and analysed. Ministers find Treasury analysis helpful and pick up on key points. |
Yes. Analysis of outcomes data was undertaken and fed into policy advice. Treasury analysis was reflected in senior Ministers’ comments highlighting early school leaving and low 15-19 year old enrolment rates as policy priorities. |
| We engage with Finance and Education Ministers, and DPMC, on schooling policy priorities with a distinctive Treasury contribution. | There is positive feedback from Ministers and DPMC on quality, timeliness and relevance of advice. | Yes. In particular the 2006 families - young and old budget theme was developed and in ongoing work to improve education outcomes for 15-19 year olds was initiated. |
| We establish strong working relationships and influence with Ministry of Education leadership and key sector stakeholders. |
Treasury priorities are reflected in the Ministry of Education’s policy work programme and collaborative work on priority issues is underway. There is regular, effective engagement with key government and sector leaders. |
Yes. The Treasury worked closely with the Ministry of Education on key policy issues including options to increase educational engagement for 15-19 year olds, school governance review, NCEA changes and budget strategy. The Treasury has ongoing high-level engagement with senior education officials and is increasing links with sector leaders. |
Competition/Regulatory frameworks
The overall result we are seeking to achieve is effect given to government decisions and to work with Ministers and other agencies to ensure that competition and regulatory frameworks support a vibrant and dynamic business environment.
The output class that contributes to this result area is Policy Advice: Regulation and Vote Purchase, Ownership and Performance Issues.
| Key Results Wanted Over 2006/07 | Key Indicators of Success for 2006/07 | Achieved? |
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We examine the impact of the Dairy Industry Responsibility Act and identify changes that may be desirable. We scope an in-depth analysis of Fonterra. |
The Treasury’s Quality Standards for Analysis and Advice (see page 103) are met. | Yes. This work was refocused towards current dairy industry issues. The Treasury, jointly with other Ministries, reported to Ministers on the issues involved. This reporting is continuing into 2007/08. |
| We contribute to the Ministry of Economic Development (MED)- led Commerce Act Review to enable a stronger focus on dynamic efficiency; investment and innovations; greater regulatory certainty; and greater confidence by Ministers, the public and industry. | Our advice is the result of a process which has addressed/considered the perspectives of relevant stakeholders. We have formed a clear position on issues, which we are comfortable to explain/defend to Ministers and external stakeholders. |
Review is still progressing. We have constructively influenced the MED discussion documents, with quality submissions received to inform the policy process. We have had significant engagement with stakeholders and have completed analysis, which has enabled an effective contribution to official processes. |
