What will we do to achieve this outcome?

Intermediate outcome: State institutions deliver sustained performance improvement in results and capability

Delivering more progress on key results and better public services depends on ensuring the right mix of interventions (expenditure, regulatory and ownership) are in place and there is sustained performance improvement across the State sector. In conjunction with our Corporate Centre colleagues (SSC and DPMC), the Treasury has an important role to play in assisting State sector agencies to meet New Zealanders' expectations of better services, delivered in more immediate and flexible ways; gaining better traction on the results that matter most; and increasing the efficiency and effectiveness of the State sector.

The Treasury, in particular, provides advice to the Government on the economic and financial implications of proposed and existing government interventions. We will provide Ministers with advice on the benefits and costs of policy options, including on targeting resources to where there is greatest return on investment. Achieving the Government's better public services ambitions in constrained times means making every dollar count and requires the public service to address the “long tail” of underachievement and poverty in New Zealand society. We aim to improve value for money, and support agencies to deliver high-quality policy advice and regulatory assessments.

The Corporate Centre provides advice on the performance and design of State institutions (the systems and structures of the State sector) and supports, and sometimes leads, changes to these. We want a public management system that is world leading in ensuring agencies have the incentives and capability to advise the Government on the right things to do and to do them in the most efficient and effective way. The Treasury and SSC have established a joint venture called the “State Sector Policy and Performance Hub” which will undertake performance monitoring of the system and provide advice on improving its performance.

The Better Public Services programme sets out the next phase of public sector reforms. It is focused on getting the system working to deliver better results and improved services for New Zealanders; delivering better value for money through greater collaboration, innovation and continuous improvement; and strengthening system leadership. The focus has shifted from identifying what change is required to delivering on those changes. The Corporate Centre will lead the implementation of these changes. In particular, the Treasury has responsibility for the legislative changes to the Public Finance Act 1989[3] required to enable greater collaboration around results and system leadership.

Delivering the outcomes the Government is seeking within fiscal constraints will require changes in the way some services are delivered. A priority for the Treasury is providing advice on and supporting reforms that will result in changes to the way services are delivered to ensure that they deliver the desired efficiency and effectiveness improvements. For example, the Treasury has a key role to play in improving the effectiveness and efficiency of the welfare system both in its vote role and as the external monitor of Work and Income. We are also focusing on improving the effectiveness and efficiency of expenditure on social housing.

As the Government's lead financial advisor and the financial manager of the Crown's accounts, the Treasury has a particular focus on improving the performance and financial management capability of the State sector (including our own). The Treasury is leading a cross-agency finance improvement programme, known as Optimise Finance, which aims to improve processes and enhance people capability. In addition, the Treasury is seeking to establish stronger demand for better financial management. The Treasury will continue to provide guidance and support to agencies to ensure activities comply with the Public Finance Act 1989 and Cabinet directions.

A crucial element of high-quality performance and financial management is the use of robust performance and value measurement that supports effectiveness and efficiency in resource use. The Treasury will help the Government make focused investment and reprioritisation decisions, both across the State sector and within particular sectors and agencies, through our understanding of performance across the State sector and the way these services, sectors and agencies operate. We will work with agencies, both individually and through system-wide interventions, to improve performance. We will identify and promote benchmarking of agency activities and opportunities to raise productivity across the State service; for example, the Administrative and Support Services and policy advice benchmarking exercises that the Treasury is now running annually.

Alongside working with agencies to improve their performance, the Corporate Centre will also provide advice to the Government on the performance of key departments. Our focus and advice will vary over time depending on our assessment of the risks of underperformance and opportunities to improve performance.

Refer to Measures section below to see how we assess the Treasury's contribution.