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, though there are some areas of poor performance. Over the short to medium term we will continue to monitor the labour market for signs of weakness in jobs growth and provide advice, as and when required. Over the longer term, population ageing and the “skill-bias” of technological change present increasing challenges, as would the demands of a strongly growing economy.
The Treasury has a formal role in monitoring the implementation and effectiveness of the Government's welfare reforms, in which greater efforts and resources are focused on assisting people at greatest risk of long-term benefit dependency to move into employment. The reforms support the achievement of the Government's target of reducing the number of people continuously receiving working-age benefits for more than 12 months by 30%.
The Treasury will work with those agencies involved in providing advice to government on policies aimed at improving the supply of skills in the economy to ensure the reform agenda across schooling, youth achievement, industry training and tertiary education is integrated, evidence-based and cost-effective. The objectives of reforms in the education sector are to boost skills and employment by focusing on the Better Public Services targets of 85% of 18-year-olds with a National Certificate of Educational Achievement (NCEA) Level 2 or equivalent qualification, and 55% of 25-34-year-olds with a qualification at Level 4 or above. In addition, the Treasury will work to ensure the operating and capital funding models used within the schooling sector are sustainable and consistent with the Government's fiscal objectives.
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 | |||
| New Zealand improves its ranking in the OECD Product Market Regulation Barriers to Entrepreneurship indicator and retains a top five ranking in the World Bank's Ease of Doing Business index. |
New Zealand was 26th in 2008 on the OECD Product Market Regulation Barriers to Entrepreneurship indicator. New Zealand was 3rd out of 185 countries in the World Bank’s Ease of Doing Business 2013 rankings. |
Significant Regulatory Impact Statements meet most or all of Regulatory Impact Analysis requirements: 90% by the end of 2013/14. The tax policy work programme 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. |
Provide advice on tax policy (with IR), the regulatory quality system, infrastructure frameworks and medium-term economic growth strategy. Provide policy advice on key regulatory sectors, including better devolved management of our natural resources. Provide guidance and support to agencies to enable them to fulfil their Public Finance Act 1989 and Cabinet requirements, including assessing Regulatory Impact Statements. Monitor, assess and provide 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:
|
||
| The perceived quality of New Zealand's infrastructure, as measured in its ranking from World Economic Forum Global Competitiveness report, increases. | New Zealand ranked 47th out of 144 countries in the 2012/13 World Economic Forum Global Competitiveness report on its perceived infrastructure quality, a small improvement on our 2011/12 ranking. | ||
| New Zealand has a more internationally competitive economy | |||
| Exports increase as a proportion of GDP. | Exports as a % of GDP (real) have been between 30% and 33% 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. |
Provide policy advice on medium-term economic growth strategy, international financial institutions and investment. Provide policy advice relating to exports and trade, in particular the economic benefits of Free Trade Agreements (FTAs) and any policy areas owned by the Treasury. Provide export credit. |
| GDP per hour worked grows substantially faster than the OECD average. | GDP per hour worked increased by 0.7% per year in New Zealand between 2000 and 2011, compared to an OECD-wide increase of 1.5% per year over the period. | ||
| 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 13.9% compared to the OECD average of 10.4%. | ||
| Enhanced human capital and employment | |||
| 85% of 18-year-olds will have achieved NCEA Level 2 or an equivalent qualification in 2017. | In 2011, 74.3% of 18-year-olds had achieved NCEA Level 2 or an equivalent qualification. |
The welfare system operates further in line with the investment approach, based on the external valuation. The operating and capital funding models used within the schooling sector are sustainable and consistent with the Government's fiscal objectives. |
Monitor the implementation of the welfare reform programme. Provide policy advice on education, schooling and youth achievement. |
| 55% of 25-34-year-olds will have a qualification at Level 4 or above in 2017. | In 2011, 52% of 25-34-year-olds had an NZQA Level 4 qualification or above. | ||
| Reduce the number of people continuously receiving working-age benefits, which will become the new Job Seeker Support (JSS), for more than 12 months by 30%, from 78,000 in April 2012 to 55,000 by 2017. | As at December 2012, 79,054 people had been receiving the benefits that will make up JSS for more than 12 months.[2] | ||
Notes
- [2]The December quarter increase is largely seasonal, and reflects a short-term increase in Sickness Benefit and Unemployment Benefit clients that occurs between September and December every year. Compared with a year ago, the target group has reduced in size (a reduction of 1,004 since December 2011).
