Chief Executive's Introduction
The 2007/08 year has been one in which the Treasury has extended itself on many levels.
In the provision of economic and financial advice to the Government, we have sought to increase our impact in several fundamental areas of our work, while also expanding our involvement into what, for the Treasury, are some relatively new areas.
In our Central Agency role, we have strengthened our collaboration with the State Services Commission (SSC) and the Department of the Prime Minister and Cabinet (DPMC) and intensified our focus on ways we can collectively improve State sector performance.
Across the Treasury, we have focused on building our relationships with stakeholders in the public, private and community sectors, using these connections to help us be a more informed, influential and effective organisation.
Highlights
The Treasury's advice and services over the past year covered our wide-ranging contribution to the Government's long-term economic and fiscal goals, as well as some more immediate responses to topical issues as they arose. While we have sought to ensure that our contribution was of high quality overall, a number of achievements stand out.
A particular highlight for the Treasury was our input into the Personal Tax Package in Budget 2008. The advice we provided was instrumental in helping the Minister determine the final size, shape and timing of the personal tax changes announced in the Budget. Our role in the delivery of the tax package was characterised not just by the hard work of staff in the months and weeks leading up to the Budget, but also by our longer-term advice and discussion of fiscal issues over recent years.
Another highlight has been our intensive analysis of New Zealand's productivity performance. The imperative for a much stronger trend of productivity going forward is the biggest economic challenge facing policy-makers and both the public and private sectors in New Zealand. During the year the Treasury took a long-term view about what matters for productivity and what New Zealanders can do to improve it. Through our analysis we identified five interlinked drivers of productivity – enterprise, innovation, skills, investment and natural resources – and published our work to help broaden public discussion on this important topic. Productivity remains a key area of focus for us.
With the pace and scale of Treaty of Waitangi settlements building over the past year, the Treasury has become more deeply involved in settlement processes. Working closely alongside the Office of Treaty Settlements and with other government agencies, the Treasury had a lead role from an early stage in the negotiations on the recent Central North Island forests collective settlement - the biggest Treaty settlement to date. We were brought in specifically to assist in working through the complex issues involved, and this has continued post the Central North Island forests collective settlement.
During 2007/08 we reached decisive conclusions about where our work over the next three to five years can have the most impact on achieving higher living standards for New Zealanders. Our four strategic results areas - international connections, long-term fiscal sustainability, natural resource management and skills - are areas where we aim to deliver a step-change in our performance as a strategic advisor to Government. I have been encouraged by the initial progress we have made on these strategic result areas to date, and will be expecting the Treasury to exemplify quality policy advice and thought leadership on these issues in the coming months and years.
The Treasury has also been considering how collectively the Central Agencies can have the most impact on the overall performance of the State sector. The Central Agencies have made a good start on several fronts. We have been working together to set clearer expectations of capability and performance for State sector leaders. There is greater cohesion in the way we engage with individual agencies, so that they receive more consistent and complementary input from us. We are jointly driving the six Development Goals for the State Services, which includes a goal focused on value for money. And we have used our collective strengths to address major cross-cutting issues such as housing affordability: during the year the Central Agencies worked with housing agencies to deliver a report to Ministers regarding the drivers of house prices to give the Government further hard evidence on which to make policy decisions. Over 2008/09 the Central Agencies will continue to focus on policy development, agency performance and public management systems.
An Outward-looking Treasury - Changing the Way we do Business
One of the transformations we seek to achieve is to be a much more outward-looking Treasury. Engaging and communicating widely with all sectors of New Zealand's economy is an important means for ensuring that the Treasury is a relevant and connected economic and financial policy advisor for the Government. It keeps us in touch with what is happening “on the ground” as well as in the data. While there is still some way to go until the Treasury is as outward-looking as we want to be at all levels of the organisation, we took considerable strides during 2007/08 and have started to see the benefits.
In particular, we have taken a stronger approach to communicating with stakeholders about the Treasury's position on matters of major significance. My own involvement over the past year has included speeches expressing the Treasury's views on topics ranging from climate change and fiscal policy choices to State sector performance, productivity performance and savings performance. Other Treasury staff are sharing the Treasury's thinking more widely by publishing papers, presenting at conferences and meeting people as part of their day-to-day work.
It is important for us to engage not just to deliver our thinking, but also to hear other people's ideas, and to develop and test our thinking. We have been engaging more across the public and private sectors to help us get a better understanding of what is wanted and needed in these areas. During the past year we have been meeting with leaders and influencers in business, academia and communities to get their feedback on the Treasury's work and to hear their views on the big issues affecting New Zealand.
The Year Ahead
We go into 2008/09 as an organisation well prepared to meet the challenges of the coming year and eager to make the most of opportunities to make a difference where it counts.
I would like to thank Treasury staff for their professionalism and commitment throughout the past 12 months and I look forward to the year ahead.
John Whitehead
Secretary to the Treasury
