The Treasury's Three Outcomes (continued)
Improved State sector performance
A strong State sector[1] is essential to lifting New Zealand's overall growth performance. The State sector in New Zealand is a significant component of the whole economy, so its performance can make the difference between a strongly or poorly performing economy overall. Recent growth in government expenditure has exacerbated the vulnerability of the economy, including by increasing our indebtedness.
A high-performing State sector is also critical to achieving the Government's wider social objectives, supporting high-quality health, education and labour market outcomes. High performance means achieving the Government's objectives, including growth, social and other objectives, in the most efficient and effective way.
What we aim to achieve here is balance. This outcome links strongly to our other two outcomes: improved overall economic performance (given the sector's size in the economy), and a stable and sustainable macroeconomic environment (by helping to bring government debt back to a prudent level, to provide a buffer against economic shocks and prepare for the longer-term fiscal challenges associated with an ageing population). Improving State sector performance is also important in that the quality and level of public services is important to New Zealanders in their everyday lives.
The Treasury will work alongside other Central Agencies (SSC and DPMC) on this outcome. Together, we have a shared goal of improving State sector performance and to achieve this we will focus collectively and individually, bringing our own areas of responsibility to bear. The Treasury's role is focused on monitoring and managing the financial affairs of the Government and managing the Budget process. We provide particular insight into the efficiency and effectiveness of government agencies, institutional settings and their interventions. This complements leadership by the SSC on the capability of agencies, sectors and systems, and by the DPMC on ensuring that the State sector responds to the Government's priorities. The table below sets out our respective roles and objectives in more detail.
What will we do to achieve improved State sector performance?
The Treasury will contribute to this outcome through the following combination of results and focus:
The State sector does the right things... |
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| State sector performance: Our advice will focus on ensuring that the State sector has robust institutions and incentives, and delivers interventions that assist the Government to meet its economic and social objectives. This includes ensuring that government spending is aligned with its priorities; and that sectoral and institutional settings set appropriate incentives for key players. In particular, we will focus our efforts on those sectors with the highest levels of government spending: health, justice, education, welfare and defence. |
| Medium-term economic strategy: As one of the six drivers of economic growth, the State sector plays its part in helping to reduce New Zealand's external vulnerability and in improving productivity. In particular, this means managing expenditure growth. We will also ensure better-quality regulation. |
| Macro and fiscal advice to achieve a stable macroeconomic environment: We will help manage overall government spending, to help bring government debt back to prudent levels. We will ensure that expenditure at an aggregate level is consistent with the Government meeting its long-term fiscal objectives. |
| Management of Crown risks and balance sheet: We will improve the management of risk across the Crown's balance sheet and provide robust advice on improving the performance of Crown assets. |
| Infrastructure: We will focus on consistently identifying the most welfare-enhancing public infrastructure projects (including social assets such as schools and hospitals), improving the management of public infrastructure assets, removing regulatory bottlenecks and increasing certainty for private sector investment. |
... does them well... |
| State sector performance: Our focus is on ensuring that incentives are in place to drive performance at an agency level. This includes support for better administrative and support services across the State sector, innovative service delivery models and ensuring that agency structures are simple and effective. The Treasury will provide advice on key elements of the public management model, monitor the performance of significant Crown entities and advise on industrial relations issues. |
| Management of Crown risks and balance sheet: Improve performance by State-Owned Enterprises (SOEs), Crown Research Institutes (CRIs) and Crown Financial Institutes (CFIs), and other parts of the wider State sector. |
| Medium-term economic strategy: Improve State sector productivity, as a significant driver of New Zealand's overall economic growth. |
... and does them in a way that is affordable now and in the future. |
| State sector performance: We will focus on the sectors with the highest levels of government spending, to ensure that it is consistent with the long-term fiscal strategy: in particular, those areas with the highest levels of government spending - health, justice, education, welfare and defence. |
| Macro and fiscal advice to achieve a stable macroeconomic environment: Bring together spending, regulatory and tax policy to promote the stability of the economy. |
| Medium-term economic strategy: Government spending consistent with reducing debt, and therefore New Zealand's vulnerability to economic shocks. |
Central Agency |
State sector performance is improved | ||
|---|---|---|---|
| State Services Commission | The Treasury | Department of the Prime Minister and Cabinet | |
| The role of each Central Agency | The SSC appoints and manages the performance of chief executives in the public service. It provides leadership on the capability of agencies, sectors and systems; sets standards; and ensures that State servants focus on delivering the Government's priorities. | The Treasury monitors and manages the financial affairs of the Government and provides economic and fiscal policy advice. The Treasury also provides advice on and manages the budget process. It provides insight into the efficiency and effectiveness of government agencies and their interventions. | The DPMC supports the process of collective decision-making, conveys Cabinet's decisions to the relevant Ministers and officials and ensures that the Cabinet receives well-conceived and coordinated advice. The Department also works to ensure that the State sector responds to the Government's priorities and conveys the Government's priorities to officials. |
| What are we seeking to achieve? |
A public management system that delivers improved services at a lower cost
Why: The State services operate in a fiscally constrained environment. System design and operation must evolve and improve over time, to meet changing needs. |
A State sector that maximises the contribution of government interventions to the Government's economic and social priorities Why: To enhance the achievement of the Government's economic and social objectives, services and interventions must be well-targeted, value for money and consistent with the Government's fiscal strategy. |
The State sector responds to the Government's priorities to improve performance Why: To ensure that officials respond to Cabinet direction in improving the quality of services within existing baselines - building smarter, better public services for less cost - and that the policy process supports that goal. |
| How will we demonstrate success in achieving this? |
Our shared measures of success: |
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| What will we do to achieve it? |
The SSC will:
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The Treasury will:·
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The DPMC will:
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Specific Central Agency priority projects are:
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Notes
- [1]The term “State sector”, in this context, refers to all institutions of Government, other than local government.
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[2]New Zealanders express increased satisfaction with the public services they receive
The Commission’s work with chief executives, agencies and Ministers influences the way that services are delivered to New Zealanders and over time we would expect to see increasing levels of satisfaction with these services.
The New Zealanders’ Experience research programme is a multi-year programme that provides information on New Zealanders’ experiences of the services they receive from government. The Commission will be using the overall satisfaction measure from the Kiwis Count survey to gauge its success in contributing towards its own outcomes as well as the shared Central Agency objective: State sector performance is improved. The first set of results from the biennial Kiwis Count survey was released in 2008 and the second set in 2010.
The next iteration of the Kiwis Count survey will be in 2011, with the results available in 2012. Previous average satisfaction scores were 68 (2008) and 69 (2010). The Central Agencies measure success in this area by an improvement in this score over time. The target for the next survey is an improvement of at least 2 points.
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[3]Public sector expenditure is consistent with the Government's fiscal strategy
The Government publishes the Fiscal Strategy Report (FSR) each year as part of the Budget. Readers who are interested in understanding more about the FSR can find this on the Treasury’s website: www.treasury.govt.nz
