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A Guide to the Public Finance Act (2005)

Foreword

The year 2004 marked the first major change to New Zealand’s public management system in a decade, when Parliament passed the Public Finance (State Sector Management) Bill. The Bill, which resulted in significant amendments to the Public Finance Act 1989, grew out of a desire to improve performance and integration across New Zealand’s public sector.

The importance of this milestone should not be underestimated. An efficient, effective and innovative state sector is critical to achieving higher living standards for New Zealanders. Also, maintaining the level of trust New Zealanders have in the integrity of the Government’s financial systems is fundamental to our democracy.

The Public Finance Act provides a framework for pursuing these goals. It represents the foundation of accountability systems for the resources provided by taxpayers to the New Zealand Government, and which the Government administers on our behalf.

The changes which were made to the Public Finance Act have, of course, resulted in a number of changes to the financial and administrative procedures that are required to be followed by government departments, Crown entities and other public institutions. The purpose of this guide is to provide information for users on the purpose of the changes to the Act, what the new requirements are, who they affect and how they fit into the Government’s budgeting and reporting cycle.

The structure of the guide follows that of the amended Public Finance Act, with specific chapters on appropriations, fiscal responsibility, Crown reporting, departmental reporting, financial powers, and the budgeting and reporting cycle.

I am confident the guide will be a valuable tool for Members of Parliament, public servants, students and other interested members of the public. I commend it to all readers.

John Whitehead
Secretary to the Treasury
August 2005

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