Statement by the Secretary to the Treasury
By Gabriel Makhlouf, Secretary to the Treasury
In the financial year to June 30, 2011, core Crown operating spending was $70 billion, equal to over 35 percent of the total value of all the goods and services produced in New Zealand in a year. Rightly, New Zealanders expect that this significant amount of money is spent efficiently and effectively.
That is why the Treasury takes State sector performance management so seriously. We need to implement robust performance management systems that provide evidence of what works well and what does not. The better we understand performance, the better we will understand the value of different activities and where improvements can be made.
This report makes a valuable contribution by providing performance information for agency administrative and support (A&S) services, tracking changes since last year's report, and identifying opportunities for improvement. This exercise has triggered more active consideration of cross-agency cooperation for better and more cost-effective ways to provide A&S services.
The report shows that, while some individual agencies have made substantial gains, overall improvement in the 2010/11 fiscal year is limited. Anecdotal evidence suggests that while our operational challenges remain, mindsets have shifted on the need for better management information, more collaboration, new ways to find savings, and more strategic A&S services that can help agencies achieve stronger performance within and beyond the back office.
For many chief executives and chief financial officers, information from this exercise provides new insight into their business, and they are using it to identify opportunities for improvement and hold managers to account for setting and achieving targets.
This exercise has also created an appetite for common performance indicators for common functions, and cross-agency exercises are underway for policy and some transactional services to the public. The Treasury will support more of this activity in the future.
As always, agency leadership is critical. Chief executives must continue championing performance management systems and linking their vision to performance metrics. And chief financial officers need to deliver on their strategic role of providing evidence for decision making, including how to deliver better and smarter, for less.
