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

Quality Standards for Policy Advice

Quality policy advice is fit for purpose

These Quality Standards for Policy Advice set out the characteristics or dimensions of policy advice that will best enable it to promote well-informed high-quality decision-making by Ministers. However, the quality dimensions below are not a checklist and not all dimensions will be equally important in every case - judgements are required at the outset about how to apply and balance the quality dimensions to ensure a particular piece of advice is fit for purpose in achieving the result sought.

When undertaking a piece of work, explicit consideration needs to be given to the following:

  • What point are Ministers at in their decision-making process? What are the Treasury’s opportunities to provide advice that will have an impact?
  • What result are we seeking by providing a piece of advice? How should the quality dimensions below be applied and balanced to achieve this result?
  • What is the relative priority of this piece of work?  What level of investment is warranted?

Dimensions of quality policy advice

Analytically Rigorous (Analysis)

Relevant frameworks

  • Appropriate analytical frameworks are used.
  • Appropriate microeconomic, macroeconomic, mathematical and econometric tools are used.
  • Knowledge is up-to-date and informed by recent thinking and literature in the field.
  • Assumptions behind the frameworks used are explicit and consideration has been given to how they will be expected to play out in the real world (a world which includes information and transaction costs, bounded rationality, market failure, government failure, etc).
  • Consideration has been given to less traditional frameworks and whether they would add innovative or useful perspectives.

Robust reasoning and logic

  • Advice has a clear purpose, problem definition, evaluation of options against criteria and assessment of risks and opportunities. We come to a conclusion and give action-oriented recommendations.

Evidence-based

Analysis is supported by relevant evidence:

  • empirical methods are sound, data gaps are identified and the level of confidence/certainty in our empirical baseis explicit
  • we draw on New Zealand’s experience of current and past policy interventions and, where relevant, the experience of other countries, and
  • we give our best judgement despite data imperfections; we acknowledge information limitations and advise within them.

Set in a Wider Strategic Context (Applied Analysis)

Strategic

  • Advice is set in the context of the Living Standards Framework, the Treasury's outcomes and the Government's broader objectives.
  • We are explicit about the relative importance and materiality of the issue, in fiscal, economic and strategic terms.
  • Connections across policy issues are made, ensuring that Ministers receive a whole-of-government perspective.
  • Advice includes consideration of the long-term implications of decisions.
  • We frame issues and help set the agenda.

Practical

  • Advice is strongly focused on achieving results. The results associated with achieving success are clearly articulated. A good understanding is conveyed of what will be required for policy success.
  • Advice considers opportunities, risks and management of uncertainty and change.
  • Issues of implementation, technical feasibility, practicality and timing are considered.
  • Advice accurately identifies compliance, transitional, legislative, revenue and administrative implications and costs.
  • Advice identifies measurable indicators of success and sets out a plan for monitoring and evaluation where appropriate.

Public sector engagement

Ministers receive advice that enables them to engage with their colleagues on a fully informed basis because:

  • thorough and timely consultation with other government departments has occurred and points of difference, and the reasons for these, are set out, and
  • where possible, advice is developed in conjunction with relevant government agencies.

Customer-focused and Persuasive (Advice)

Clear and well-written

Advice is compellingly presented. It is:

  • brief and concise – key messages should be readily apparent to the reader
  • easy to read – has a clear and logical structure, avoids technical jargon and uses visual devices such as charts and tables where possible
  • pitched to suit the audience – uses appropriate language, style and level of detail
  • framed in terms of how it fits with previous advice and communications with the “customer” (often this is the Minister), and
  • free from errors (including data errors).

Timely

  • Advice is timed for when it can have the greatest influence and for when it best helps in the decision-making process (even if it means, at times, that advice is not fully developed). It should indicate when a decision is required (unless there is no deadline).

Politically aware

Advice:

  • demonstrates awareness of the wider environment and political situation
  • relates to the perspectives of Ministers, even if suggesting something that tests those perspectives, and
  • recognises choices and constraints Ministers face, and includes a range of options to address these.

Solution-focused

  • We are proactive, anticipating, as well as responding to, Ministers’ needs. Advice is action-oriented and suggests a clear way forward (“Here is what you can do” as well as “Here is a problem”) and includes a range of practical options (first best advice, but also second and third).
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