Strategic Direction
The Treasury's overall vision is to be a world-class Treasury working for higher living standards for New Zealanders. Our overarching goal is to be a highly engaged, relevant and respected economic and financial policy advisor, making an impact on the issues that are important to New Zealand's economic performance and State sector performance.
In 2006, the Government set out three themes describing its vision for New Zealand and the approach for State sector agency focus. Due to our role as the financial and economic advisor to government, the Treasury's primary direct focus area is economic transformation. Through our role as the manager and advisor for the government's budget, we also focus on and contribute to the effectiveness of spending and policy priorities affecting families – young and old and national identity.
The Government focus for economic transformation is directed towards lifting the performance of the economy. As is illustrated in the following table and described further in our Operating Intentions, the Treasury focus is well aligned to this intent.
The objective of our advice is to help the government achieve higher living standards for New Zealanders. Sustained and steady growth in New Zealanders' incomes is a central means of improving the living standards of New Zealanders. Economic growth enables choices by individuals and provides the means to acquire many of the things we value. It also gives the government choices; this includes how it funds education, health, environmental protection, physical and social infrastructure, and assistance to those in need.
Higher living standards also incorporate elements that are broader than increases in consumption and income. These determinants of an individual's well-being are likely to include such things as good health, a satisfying job, and a high-quality natural environment. And beyond individual well-being, most New Zealanders also place a high value on social inclusion, freedom, security, democracy, equality of opportunity, and our physical environment. These dimensions of wellbeing are clearly important in their own right, and some are also important contributors to economic performance. Some aspects of well-being are more relevant to the Treasury's responsibilities than others.
Government priorities |
Alignment of Treasury activities |
Economic transformationWorking to progress our economic transformation to a high-income, knowledge-based market economy, which is both innovative and creative and provides a unique quality of life to all New Zealanders:
|
We support government by advising, consulting, collaborating, forecasting, and providing research and development of policies that will lead to a sustainable and productive economy. The Treasury advises on alternative paths to a fiscal position that is sustainable in both the medium-term (approximately 10 years) and longer-term (in the next 20-plus years). Through the Budget process we advise on priorities for spending in support of policies to meet this theme. Our work on improving the performance of the State sector also supports the theme, by supporting others to align their resources and effectively deliver to achieve economic transformation. |
Families — young and oldAll families, young and old, have the support and choices they need to be secure and be able to reach their full potential within our knowledge-based economy:
|
Through the Budget process we advise on priorities and policies to support families – young and old and help prioritise spending in support of policies to meet this theme. For this theme, through advice on policies and the performance of agencies (individually and collectively), we focus on: health, education, justice, infrastructure and social development. |
National identityAll New Zealanders are able to take pride in who and what we are, through our arts, culture, film, sports and music, our appreciation of our natural environment, our understanding of our history and our stance on international issues:
|
Through the Budget process we advise on priorities and policies to support a strong national identity. Our work on improving the performance of the State sector also supports the theme, by supporting others to align their resources effectively. We also contribute to Government's Treaty related work. |
Our outcomes
As government's leading economic and financial advisor, the best way that the Treasury can contribute to higher living standards is through sound and timely advice to the government of the day on issues that pertain to our three outcomes:
- Improved economic performance
- A stable and sustainable macroeconomic environment
- Improved State sector performance.
Our outcomes are linked to or shared with other agencies. In particular the Ministry of Economic Development (MED) works alongside the Treasury to provide economic advice to the government. The Treasury's main focus is on issues that have a pervasive impact on the performance of the economy as a whole. The Ministry's complementary focus is on ways of improving New Zealand's economic growth potential, drawing on its knowledge and understanding of firm and sector issues.
Improved economic performance – is largely about increasing incomes and living standards for New Zealanders. New Zealand has high labour participation and the main area of focus is improving productivity.
A stable and sustainable macroeconomic environment – includes low and stable inflation, predictability in tax and spending, and minimising unnecessary volatility in aggregate output (GDP). This contributes to higher economic growth, by allowing individuals, businesses and the government to plan more effectively for the longer term. This improves the quality and quantity of investment in physical and human capital, and helps to raise productivity.
Improved State sector performance – is of interest to us because of the need to provide value-for-money, well targeted, efficient and effective services – and our Central Agency role also contributes to and supports State sector performance as a key driver to improve wider State sector agency, policy and system performance.
Our focus on improving the performance of the State sector has specific individual commitments with other agencies, as well as having collective commitments with our central agency partners, as outlined in our outcomes. These commitments contribute to and align with the development goals for the State sector and provide a whole-of-government approach to improvement.
Over the medium-term the three central agencies will:
Provide effective leadership: Central agencies will take responsibility for making our devolved system work. To that end, we will work alongside other agencies on specific issues.
Central agencies will work to give Ministers better information and advice. We will ensure that the right guidance and monitoring are in place to enable the system to run smoothly, ensuring agencies will have a clear understanding of Ministers' performance expectations.
Focus on the things that matter: Efforts will be better targeted to where they are going to have the most impact on results. Central agencies will focus on priority issues and get action on these while retaining responsibility for a system-wide view.
Work together more effectively: By sharing information and integrating aspects of planning, the central agencies will develop joint views on where priority issues lie. We will then identify where there is value in taking joint action on issues, or where separate action is likely to be more productive.
Our medium-term approach to meeting Government priorities
In the Treasury Statement of Intent 2007-2010 we introduced our “Stepping Up” programme. In this we discussed our plans for harnessing our capability to best advantage. As a result, we have now implemented Results Plans covering the work in which we engage. These describe our activities and intended results and enable us to measure and report to the Minister of Finance on our progress towards achieving the Government's priorities and our mandatory functions, which we do on a four-monthly basis.
In 2007, we also indicated our intention of using this focus to concentrate more energy and have more impact on a smaller number of strategic issues, across our three outcomes. Our purpose in doing so was to have more impact in the areas that will most affect our outcomes and through these Government priorities. These are areas of long-term pervasive impact for New Zealand where the Treasury can contribute to framing the debate and crystallising strategic options and trade-offs.
Those chosen reflect the current environment, including Government themes, future challenges and risks to enable us to prudently channel our resources and focus towards those areas where we are able to have most impact.
Our four Strategic Results Areas (SRAs) are:
- International connections
- Natural resource management
- Skills
- Long-term fiscal sustainability
All of these SRAs involve multiple agencies. We aim to contribute our unique perspective – as a central agency, economic and fiscal advisor – to support the government's medium-to-long-term thinking in these areas. We will work closely with other agencies on these issues, to offer the government the best solutions and new ideas.
These are not intended to cover all aspects of our activities, nor are they the only things we think are important. Rather, they are chosen to offer the best focal lens through which we may deliver a connected, value-for-money programme to meet the aspirations of government for New Zealanders into the future.
To ensure the optimal use of our resources in contributing to Government objectives, these will guide the Treasury's choices, decision-making and results assessment. As they present a new approach for 2008, they will be progressed and assessed during the following two to five years. We will aim to establish measures of success and impact for the contribution of associated programmes.
