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Annual Report of the Treasury for the Year Ended 30 June 2014

Some Highlights from the Year

More detail about our achievements in 2013/14 are presented on pages 35 to 56.

The Treasury delivered on an extensive and ambitious work programme during 2013/14. This required maintaining a sharp focus on establishing priorities and identifying efficiencies in order to balance competing pressures and to effectively sequencing complex programmes alongside the core services we provide on fiscal policy, State sector and balance sheet management. Some highlights were:

  • Government Share Offer Programme (GSO) We managed public share offers for Meridian Energy and Genesis Energy and achieved the Government's objective of widespread New Zealand ownership (more than 62,000 shareholders in Meridian Energy and more than 68,000 in Genesis Energy); and raised $2.62 billion for the Crown's Future Investment Fund. We also reduced the government ownership of Air New Zealand through the sale of shares, returning a further $370 million.
  • An investment approach for welfare policy We continued working with the Ministry of Social Development (MSD) to embed the investment approach to reducing the level of long-term welfare dependency. Work included external valuation and monitoring of the liability, establishing a new value-based Key Performance Indicators (KPI) framework, and putting in place an Multi-Category Appropriation (MCA) to allow for greater flexibility in investing resources. We also continued work with MSD on the use of outcome-based contracting in social services, and trials of integrated services. Since Budget Economic and Fiscal Update (BEFU) 2012, $360.1 million in total gross savings have flowed through forecasts from reform policies.
  • Social housing reform We worked with MBIE, MSD and Housing New Zealand Corporation (HNZC) on options for providing social housing, and gained Cabinet approval of the next phase of Social Housing Reforms. This included setting up the Social Housing Establishment Unit which will lead work on establishing an Independent Transactions Unit to develop the social housing market. Cabinet also approved a regulatory regime for social housing, and agreed the transfer of the social housing needs assessment from HNZC to MSD.
  • International relationships We supported the advancement of regional economic integration and the Government's Business Growth Agenda through arrangements to allow the direct convertibility of the New Zealand Dollar and Chinese Renminbi.
  • Education We worked with the Ministry of Education (MOE) on advice on Investing in Educational Success, a $359 million programme to lift student achievement. This programme creates communities of schools as a way of strengthening collaboration between principals, teachers and schools in order to raise student achievement. It introduces three new teacher and principal roles within schools, as well as an extra allowance to attract highly capable principals to schools with the greatest challenges.
  • Enhancing commercial analysis and advice We reviewed our commercial operations functions to strengthen our monitoring of commercial assets owned by the Crown through a focus on incentives, governance and monitoring tools and procedures. This review led to the development of a new organisational structure and operating model for these functions, and the establishment of a Commercial Operations Advisory Board to support our focus on better commercial analysis and advice.
  • Public Private Partnerships (PPPs) We worked closely with the New Zealand Transport Agency (NZTA) to achieve contractual and financial close for Transmission Gully providing for the delivery of a strategic link for Wellington and introducing an innovative and value for money contracting model for the procurement of roading infrastructure. We also worked with the Department of Corrections and MOE to gain Cabinet approval to establish PPPs for the procurement of a new maximum security facility at Auckland Prison and four new schools respectively.
  • Investment Statement We published the Treasury's first Investment Statement in March 2014 in accordance with recent amendments to the Public Finance Act 1989. The Investment Statement assessed the state and composition of the Crown's major assets and liabilities, and discussed the principles that are important to the efficient and effective balance sheet management. It highlighted a number of areas of focus for further improving the management of the Crown balance sheet.
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