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

Developing our Outcome Performance Framework

The Treasury operates in a dynamic context, and this presents both challenges and opportunities.

To help us achieve our ambition to lifting living standards, we did some work this year to enhance the intervention logic that underpins our Outcome Performance Framework. In particular, we wanted to strengthen the linkages between our work programmes and how they contribute to the outcomes we seek: improved economic performance; a stable and sustainable macroeconomic environment; and a higher performing State sector.

These high-level outcomes provided a framework for understanding of the Treasury's core functions - economic, fiscal/financial, performance management, State sector leadership, commercial operations - but they were too distant to provide the clear line of sight we wanted between the programmes we are working on any given year, and the ultimate impact they will have.

To address this, we developed six intermediate outcomes that bridge the gap between our three outcomes and the outputs. Our intermediate outcomes are:

  1. New Zealand has an internationally connected and competitive business environment
  2. People have the skills and support to participate in the economy
  3. Outcomes for Māori are improved
  4. The State sector delivers results for New Zealanders
  5. The Crown balance sheet is managed effectively and efficiently, and
  6. The economic cycle is managed so that pressures on interest rates and the exchange rate are moderated.

We want our intermediate outcomes to help us to focus better on what really matters and on the work we could do that stands to make the greatest impact. The new intermediate outcomes make more transparent some of the things we've been focusing on: our increased investment in managing the balance sheet, providing advice on commercial operations, as well as some of our new functions that we have taken on such as Analytics and Insights and Portfolio Performance Management.

The increased granularity of the intermediate outcome framework will improve its use as a management tool, supporting our focus on the things that will have the greatest impact but also balancing the investment of resources we make across our high-priority projects and our core business-as-usual work.

Their greater synergy with our Living Standards Framework, an important shaper of our advice and what we focus on, makes it a better way of communicating what we are doing and why, to both internal and external audiences. It's easier to see the value of what we do.

We'll be using our intermediate outcomes as our performance framework for 2014/15 year. And while this Annual Report is still structured around the three high-level outcomes we used to drive our business during 2013/14, readers will already see the influence of the intermediate outcomes emerging; we have already begun the focus on what we need to do to achieve more inclusive economic growth and improve Māori outcomes and we are identifying innovative ways of improving State sector performance such as looking to extend the "investment approach", social bonds and improving the use of data and analytics.

Readers should refer to the Statement of Intent 2014-2019 for more information on the revised Intermediate Outcome Performance Framework. You can access it online at: http://www.treasury.govt.nz/publications/abouttreasury/soi/2014-19/

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