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Key Achievements for 2010/11

The Earthquake Coordination Team

Treasury advice enabled Ministers to deal quickly with the financial consequences of the Canterbury earthquakes, to coordinate recovery actions and to set up a new authority, the Canterbury Earthquake Recovery Authority (CERA).

This specialist Treasury team has played a crucial role in coordinating the all-of-government response through advice to Ministers on matters such as the estimated macroeconomic and fiscal impacts, insurance and Earthquake Commission (EQC) payouts and various funding initiatives (such as earthquake support subsidies).

Current account and net IIP
Current account and net IIP.
Source:  Statistics New Zealand, the Treasury

Budget 2011

Households' high levels of debt, New Zealand's high net external liabilities and a weak productivity record are symptoms of an economy that has been underperforming over a number of years. We need to turn these indicators around to reduce future risks to the economy's equilibrium and, therefore, to New Zealanders' living standards.

Decisions announced in Budget 2011are designed to facilitate a path toward stronger national productivity performance and faster economic growth, underpinned by a credible fiscal consolidation plan: eliminating the fiscal deficit and returning to surplus on a sustained basis through lowering operating and capital allowances, finding savings and a process of reprioritisation.

Financial Operations

It has been an eventful year for the Financial Operations Group. The New Zealand Debt Management Office (NZDMO) took advantage of favourable interest rates by pre-funding significant amounts of future borrowing. This peaked with a weekly Government Bond tender of $950 million in January, completing several weeks' worth of the borrowing programme in one fell swoop.

The Government announced early in 2011 that the New Zealand Export Credit Office (NZECO), which has supported more than $1 billion of total exports since it was established, would remain part of the Treasury for the next three years.

And over the course of the financial year, six government-guaranteed institutions defaulted. By the end of June 2011, all eligible depositors - other than those who had yet to make claims or who could not be traced - had been paid. The guarantee schemes transitioned from coverage of more than $133 billion in 70 institutions to just seven institutions with about $2.500 billion worth of deposits.

The Office of the Auditor-General (OAG) has conducted a performance audit of the Treasury's administration and management of the Crown Retail Deposit Guarantee Scheme which had not been completed as I write this foreword.

The National Infrastructure Plan

The Treasury's NIU published its second National Infrastructure Plan in July following consultation with the National Infrastructure Advisory Board and a series of regional infrastructure workshops.

It is designed to reduce uncertainty for businesses by outlining the Government's intentions for infrastructure development over the next 20 years, provides a framework for infrastructure development and includes a series of actions, working towards the next release in 2014.

State Sector Reform

Together with the other Central Agencies (the Department of the Prime Minister and Cabinet [DPMC] and the State Services Commission [SSC]), we prepared advice for Ministers that led to the establishment of a significant programme of work, resulting in the Government's Better Public Services programme. This has the following aims:

  • Clear priorities: Focusing on the things that matter most for New Zealanders.
  • High-quality services: Ensuring that services are modern, responsive, business-like and provide good value for money.
  • Reducing waste: Ensuring that government administration is efficient, streamlined and well organised.

Raising productivity in the State sector is crucial to any successful effort to raise nationwide performance and, therefore, the per capita incomes of New Zealanders over time.

Regulatory Reform

The Treasury provides policy advice on key regulatory sectors that matter for growth, and on how to improve the regulatory management system. We support Ministers to improve the flow of regulation through quality assurance on regulatory impact statements that relate to significant regulatory proposals, and by building agency capability to perform good regulatory impact analysis. We coordinate annual regulatory plans, which set out all anticipated proposals to introduce, amend, repeal or review regulation each year.

In relation to the stock of existing regulation, we provide guidance for agency scanning of the regulation they are responsible for to ensure that it is fit for purpose. We also develop and apply (and help regulatory agencies develop and apply) principles for testing whether regulatory regimes are good practice.

Looking to the Future

My vision for the Treasury is that we will be among the most respected and influential organisations in New Zealand. Our Ministers expect us to provide advice that will shape New Zealand's economic future, and they're looking to us to be more effective State sector leaders.

Ultimately, I'd like to see success defined by the strength of our values - open-minded, bold, challenging and collaborative, passionate and ambitious for our people and our performance - and by a change in the Treasury's impact, image and brand.

We will know that we have achieved this when businesses and agencies across the country respect us for the relevance of what we say, for being good partners, for being able to seize opportunities and solve problems, for being experts at what we do and for being good navigators for New Zealand.

Gabriel Makhlouf
Secretary to the Treasury

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