What will we do to achieve this outcome?
Intermediate outcome: Improved domestic business environment
New Zealand's business environment needs to strongly outperform other countries to overcome the disadvantages of size and distance. The Government impacts on the business environment particularly through its policies relating to education, welfare, tax, savings incentives, regulation, science and innovation, infrastructure and the management of natural resources. Overall, there has been relative slippage in relevant policy settings over recent years (as shown through indicators such as OECD's Product Market Regulation Barriers to Entrepreneurship indicator, the World Bank's Ease of Doing Business ranking, tax-related OECD indicators and World Economic Forum Global Competitiveness report ranking). This reflects some deterioration in New Zealand and improvements elsewhere.
On these key policy settings, the Treasury provides first opinion policy advice on tax, regulatory quality, savings and infrastructure; and second opinion advice on the other areas. We focus on tax and regulatory policy settings because of their pervasive effects on incentives to compete, invest and take risks.
We also provide first opinion advice on priorities for medium-term economic growth strategy. This includes supporting decision-making to advance policy that makes the business environment as internationally competitive as possible, understanding and improving New Zealand's competitiveness and economic structure, ensuring micro- and macroeconomic settings reinforce each other and advising the Government on actions to improve overall economic performance in the medium and long term.
The Government has articulated its overall business growth agenda structured around six key inputs required by businesses to succeed. The goal is to lift economic performance by delivering a more productive and competitive economy. The Government's focus is on building: (i) capital markets; (ii) innovation; (iii) skilled and safe workplaces; (iv) resources; (v) infrastructure; and (vi) export markets. The initial stages involved implementation and communication of a wide range of actions supporting this agenda. The Treasury is providing advice to Ministers, along with MED, on implementation, coordination and next steps in the Government's business growth agenda.
The Treasury's tax policy work will focus on delivering the Government's tax policy work programme (available at http://taxpolicy.ird.govt.nz/work-programme), working alongside IR's Policy Advice Division. This includes a focus on raising revenue in a way that is efficient and fair.
The Treasury will promote regulatory reform by providing policy advice on key regulatory sectors that matter for growth and advice on how to improve the regulatory management system. We will support Ministers to improve the quality of new regulation through our role in assessing major Regulatory Impact Assessments, and building agency capability. We will also support agencies in their assessments of existing regulation based on principles of best practice regulation. Ultimately, we are aiming to ensure that all New Zealand's regulatory regimes, particularly those of significance to business, reflect the principles of best practice regulation - proportionality, certainty, flexibility, durability, transparency and accountability, growth-supporting, and with capable regulators.
Our work on infrastructure takes into account its contributions both to economic growth and to quality of life. Our work will give effect to the National Infrastructure Plan 2011, which aims to give businesses confidence that New Zealand's infrastructure environment is responsive and supports the productive and tradable sector.
We will work to ensure that policy settings maximise the value of New Zealand's significant natural resource endowment, by providing certainty and efficient allocation. The topics we focus on include climate change policy, new organisms, the Resource Management Act 1991 with a particular focus on water, and ensuring Maori rights and interests are well integrated into regulatory regimes.
We will support the Government in returning prosperity to the Canterbury region. We will provide advice on ensuring that policies and institutions support the rebuild of Christchurch and there are no unjustified policy blockages. We will monitor and provide advice on the implications of recovery in Canterbury on the Government's fiscal position. We will provide first opinion advice on the impact of insurance issues on rebuilding Canterbury. We will undertake a review of the Earthquake Commission (EQC) to ensure the Crown efficiently manages the risk it faces from private property damage in natural disasters while also supporting the private insurance market's own transition to a new equilibrium in which risk is efficiently priced and allocated.
Over the period of this Statement of Intent, the Treasury will research and provide advice on policy changes (across tax, government spending, welfare, retirement income, saving and investment policies) which could sustainably increase New Zealand's national savings rate without creating unacceptable tradeoffs elsewhere. We will assess and advise on science and innovation policy, business assistance programmes and competition regulatory settings.
Refer to Measures section below to see how we assess the Treasury's contribution.
