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Outcome: A More Effective and Efficient State Sector

What are we seeking to achieve?

The quality of expenditure, regulation and other interventions by State sector agencies has a significant impact on the living standards of New Zealanders. It impacts both directly and indirectly on New Zealand's stocks of financial and physical capital, human capital, social capital and natural capital. Given the significant impact it has, the State sector needs to do the right things in the right ways at the right time - and they must be affordable.

The size of the State sector has grown dramatically over the last decade, both in terms of expenditure and the size of the balance sheet. The results achieved have not always matched this growth nor have increases in spending always been targeted to those most in need.

The Treasury is working to help the Government reduce government spending as a share of GDP to around 30% by 2015/16. Reducing government spending supports the achievement of the A Stable and Sustainable Macroeconomic Environment outcome as the main way of bringing government debt back to a prudent level. This will reduce our vulnerability to economic shocks and prepare for the longer-term fiscal challenges associated with an ageing population. The short-term challenge is to return to fiscal surplus by 2014/15.

The fiscal environment means that the State sector must improve the effectiveness and efficiency of government expenditure and assets. The Government has set a challenge for the State sector to make more progress on a number of key results and to deliver better services within lower allowances for new spending. Meeting this challenge will depend on focusing on government interventions, whether spending, regulation or government ownership, that have the biggest impact on New Zealanders' living standards - and that have benefits that outweigh their costs to society. Keeping this focus on effectiveness and efficiency is important, regardless of the fiscal situation. As raising taxes or debt to finance government expenditure and assets has economic costs, we need to make the most of every dollar that is spent.

Delivering on this challenge to get greater value out of public resources will require changes. It will require better measurement of the performance of the State sector to better understand and improve the value we are adding. It will require being more innovative, collaborative and responsive to the needs and expectations of New Zealanders. The Kiwis Count quality score is a high-level indicator of whether the public service is delivering quality services and the Better Public Services results provide a measure of progress against some of the biggest challenges facing New Zealand.

How we will assess whether we are achieving A More Effective and Efficient State Sector
Measure Current performance Target
Government spending as a share of GDP. Core Crown government spending as a share of GDP is forecast to decline from 34.4% in 2011/12 (excluding earthquake costs) to around 30% in 2015/16. Government spending as a share of GDP is reduced to around 30% of GDP by 2015/16.
Kiwis Count quality score.

68 in 2007.

69 in 2009.

Assessment of a further improvement in the community experience of the service quality of public services[2].
Better Public Services Results are achieved.

The Government has set 10 challenging results to be achieved over the next three to five years.  

For more information on the current status of these result areas, see new-zealanders




  1. Reduce the number of people who have been on a working age benefit for more than 12 months.
  2. Increase participation in early childhood education.
  3. Increase infant immunisation rates and reduce the incidence of rheumatic fever.
  4. Reduce the number of assaults on children.
  5. Increase the proportion of
    18-year-olds with NCEA Level 2 or equivalent qualification.
  6. Increase the proportion of 25–34-year-olds with advanced trade qualifications, diplomas and degrees (at Level 4 or above).
  7. Reduce the rates of total crime, violent crime and youth crime.
  8. Reduce re-offending.
  9. New Zealand businesses have a one-stop online shop for all government advice and support they need to run and grow their business.
  10. New Zealanders can complete their transactions with the Government easily in a digital environment.


  • [2]The Kiwis Count survey is now being run as a continuous survey, with fieldwork 50 weeks of the year and quarterly reporting on a six-month rolling average.
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