Investment intentions is the first phase in an investment’s life cycle where agencies identify medium to long term investment needs and any potential investment projects or programmes that might be required to meet the investment need.
The Investment intentions phase provides Ministers with visibility of the likely categories of investment agencies are interested in, enabling Ministers to:
- coordinate and deliver government priorities, and system and sector strategies
- achieve agency strategic goals
- ensure your agency has the infrastructure and capabilities to deliver sustainable and effective public services into the future, and
- provide clarity about which investment areas are more important than others so trade-offs can be made where needed and impacts of doing so are well understood.
Identifying investment needs
Investment needs are derived from, and closely linked to, agency Strategic Intentions, agency long-term planning, and any broader system strategies and needs.
You can identify investment needs by identifying the key milestones and steps on the journey to achieving your agency’s strategic plan or long-term vision (ideally at least 10 years from now). Two examples of approaching this are:
- forecasting milestones – which involves projecting known pressures and constraints into the future identifying the incremental improvements necessary to achieve the long-term vision, and
- backcasting milestones – which involves starting with the long-term vision of how your agency expects to be functioning and performing in the future and then working backwards to identify key milestones.
You can then identify investment needs (and even potential investment projects and programmes) by considering whether an investment is needed to manage, mitigate or capitalise the impacts on key milestones from the following factors:
- strategic context and any forecast changes in operating environment
- changes to regulatory or operational policy settings
- changes in demand for services
- current and expected performance of existing assets
- the status and expected benefits from investments at different stages in their life cycle
- changes in the performance of assets
- changes in the capability of the supplier market, or
- changes in the way services are delivered or levels of service.
Once investment needs and potential investment projects and programmes have been identified you should include these in your agency’s submission to Treasury’s quarterly investment reporting.
Following the above approach will also confirm that your identified investment intentions:
- link to its strategy, and the government priorities
- will deliver the future outcomes and services it is required to provide.