What will we do to achieve this outcome? (continued)
Intermediate outcome: Enhanced human capital and labour supply
Skills influence productivity and growth directly, through their impact on labour productivity and labour utilisation; and indirectly, through their effect on other drivers of growth, such as innovation and international connectedness. Overall, New Zealand performs relatively well in terms of both the utilisation and skill level of its labour force; however, there are some areas of underperformance. Population ageing and the "skill-bias" of technological change present increasing challenges, as would the demands of a strongly growing economy.
Along with MSD, the Treasury is the joint lead on the suite of reforms to the welfare system, with a particular focus on the accountability and funding arrangements (which are critical to the ultimate success of the reforms). The purpose of welfare reforms is to reduce the number of people who remain on a benefit for more than 12 months thereby increasing labour force participation and ultimately economic performance.
The Government is pursuing a broad and interconnected reform agenda on a complex set of topics relevant to youth achievement, schooling and education which the Treasury will focus on supporting. The objectives of these reforms are to boost skills and employment by focusing on increasing the proportion of 18-year-olds with National Certificate of Educational Achievement (NCEA) Level 2 or equivalent qualification and increasing the proportion of 25-34-year-olds with advanced trade qualifications, diplomas and degrees.
The Treasury can add to the advice of other agencies by helping senior Ministers and Cabinet to weigh fiscal, economic and social objectives of proposals and helping agencies craft fit-for-purpose advice. Where a broad range of advice is produced by agencies, a coordinated and coherent approach is not guaranteed, and the Treasury can support the Government to achieve this objective. The Treasury will work with the Ministry of Education (MOE) and MSD to ensure that proposals are consistent, coherent, evidence-based and cost-effective. Our support can facilitate effective leadership and decision-making by government and help it achieve its educational objectives.
Realising these and other priorities will require further refinement and reshaping of tertiary education funding and policy settings. Our advice in this area will have a particular emphasis on improving flexibility, performance, price and value for money.
The Government also makes a significant fiscal contribution to this sector through education provision and through welfare settings. Therefore, welfare and education policy settings contribute to the A More Effective and Efficient State Sector outcome.
Refer to Measures section below to see how we assess the Treasury's contribution.
| Intermediate outcomes (and outcome indicators) | Current situation | Impact measures | Core activities and services |
|---|---|---|---|
| What will medium-term success look like? | How are we currently placed against our outcome indicators? | How will we demonstrate our success? | What will we do to have an impact on our intermediate outcomes? |
Improved domestic business environment |
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| New Zealand improves its ranking in the OECD Product Market Regulation Barriers to Entrepreneurship indicator and retains a top 5 ranking in the World Bank's Ease of Doing Business. |
New Zealand was 21st in 2008 on the OECD Product Market Regulation Barriers to Entrepreneurship indicator. New Zealand was 3rd out of 183 countries in the World Bank's Ease of Doing Business 2012 rankings. |
Regulatory Impact Statements meet most or all of Regulatory Impact Analysis requirements: 75% by the end of 2012 and 90% by the end of 2013. The tax policy work programme, including examination of reform of the taxation of savings and investment, helps achieve the Government's Revenue Strategy, which is published as part of the Government's Fiscal Strategy. The National Infrastructure Plan and annual Infrastructure State of the Nation report provide certainty to business/investors and the public over the performance of New Zealand's infrastructure.
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First opinion policy advice on tax policy (with IR), the regulatory quality system, infrastructure frameworks, medium-term economic growth strategy. Second opinion policy advice on key regulatory sectors, including better devolved management of our natural resources. Guidance and support to agencies to enable them to fulfil their Public Finance Act 1989 and Cabinet requirements, including assessments of Regulatory Impact Statements. Monitoring advice on the performance of key departments. |
| New Zealand's tax system is considered to be internationally competitive according to tax-related OECD indicators while still achieving the Government's revenue raising targets. | New Zealand has:
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| The perceived quality of New Zealand's infrastructure, as measured in its ranking from World Economic Forum Global Competitiveness report, increases. | New Zealand ranked 34th out of 142 countries in 2011 on its perceived infrastructure quality, an improvement on our 2010 ranking. | ||
New Zealand has a more internationally competitive economy |
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| Exports increase as a proportion of GDP. | Exports as a % of GDP (real) have been between 30% and 32.5% over the past 10 years, most recently around 32%. |
OECD sector-specific regulatory restrictiveness indices. Components of the World Bank's Ease of Doing Business index. Trade and investment flows with other countries that are priority markets. Better international linkages and relationships as demonstrated through exchange activities with our international counterparts in Treasuries and Ministries of Finance. |
First opinion policy advice on international financial institutions and investment, and on medium-term economic growth strategy. Second opinion policy advice on New Zealand's offshore presence. Provision of export credit. |
| GDP per hour worked grows substantially faster than the OECD average. | GDP per hour worked increased by 5.7% in New Zealand between 2005 and 2010, compared to an OECD-wide increase of 5.3%. | ||
| Business investment as a percentage of GDP increases substantially relative to OECD mean level. | In 2011, New Zealand's business investment as a percentage of GDP (real) was 13.7% compared to the OECD average of 10.4%. | ||
Enhanced human capital and employment |
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| Eighty-five percent of 18-year-olds have an NCEA Level 2 or equivalent qualification by 2016. | Around 68% of 18-year-olds have an NCEA Level 2 or equivalent qualification. |
Welfare reform programme is delivered on time, to budget and achieves the desired results. The operating and capital funding models used within the schooling sector are sustainable and consistent with the Government's fiscal objectives. |
Jointly lead the welfare reform programme. Second opinion policy advice on education, schooling and youth achievement. |
| Increase the proportion of 25-34-year-olds with advanced trade qualifications, diplomas and degrees (at Level 4 or above) (target to be decided through Better Public Services work programme). | Fifty-two percent of 25-34-year-olds have an NZQA Level 4 qualification or above. | ||
| Reduction in the number of people who have been on a benefit for more than 12 months (target to be decided through Better Public Services work programme). | As at March 2012 there were 49,647 work-obligated clients who have been on a benefit for more than 12 months. | ||
