Introduction from the Chief Executive
The Treasury's role is to raise the living standards of New Zealanders by helping the Government improve New Zealand's overall economic performance. While many factors influence the economy, a high-performing Treasury can have a significant impact. Having this impact is the focus of the five-year strategy set out in this Statement of Intent.
After the recent recession and global financial crisis, New Zealand's economy and the Government's finances are now reasonably well-placed compared with many other countries. New Zealand remains exposed to international factors beyond our control so both the Government and the private sector will remain dependent upon debt for the foreseeable future. For New Zealanders to have a secure economic future, we need to earn our way in the world, rather than borrowing and spending.
The Treasury has moved from urgently responding to the recession and financial crisis to supporting longer-term plans. To be effective, the Treasury needs to be dynamic and engage with a broad range of stakeholders. We have reshaped our organisation and leadership so that we are better placed to advise the Government about the economy and its finances.
Our work is designed to create sustained improvement in the following three key outcomes that will improve New Zealanders' living standards:
- improved overall economic performance
- a stable and sustainable macroeconomic environment, and
- improved State sector performance.
Improved economic performance generates higher incomes and creates greater security for people. The Government's immediate priorities for improving economic performance are expressed in the Government's six drivers for economic growth, which are a central plank of our work.
Lifting economic performance is integrally linked to the Treasury's other two main outcomes. A stable and sustainable macroeconomic environment lays the foundation for improved economic performance by providing people with confidence to take risks and innovate, and the certainty to get involved with productive enterprises, as workers, investors or suppliers. Strong economic performance also serves macroeconomic stability by reducing the vulnerability of the economy to external shocks.
New Zealand's State sector accounts for about a third of all economic activity and over the next five years the country will need to borrow large sums to pay for the services that the Government provides. Improved State sector performance is essential to ensure that public services remain sustainable over the long term. We need to alter and adapt the sector to match the realities of the tight economy as successful State sector reform complements strong economic growth. The Treasury will work closely with the State Services Commission (SSC) and the Department of the Prime Minister and Cabinet (DPMC) to lead the drive for improved State sector performance. Our particular focus is on improving State sector productivity; ensuring taxpayers get value for their money.
I am confident that the Treasury's staff can act upon the ideas and work outlined in this Statement of Intent, improving the three key outcomes that will help raise the living standards of New Zealanders.
In signing this statement, I acknowledge that I am responsible for the information contained in the Statement of Intent for the Treasury. This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriations (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.
John Whitehead
Chief Executive
Counter-signed: Fergus Welsh
Chief Financial Officer
