The 'Investment Management System' means the processes, rules, capabilities, information and behaviours that work together to shape the way investments are managed throughout their life cycles.
The Investment Management System is complex, with interrelated cycles spanning months or years. The system has to effectively convert business unit, agency, sector and all-of-government needs into outcomes in a way that gets the best value for New Zealand (given financial and other constraints).
Cabinet has investment decision rights on all investment proposals where the investment requires new Crown funding or support, is assessed as high risk or has significant policy issues.
Cabinet must also be given the opportunity to consider investment proposals that have significant fiscal and policy implications or could affect the government's reputation in the marketplace.
Cabinet has laid out its requirements and expectations in the Cabinet Manual and in Cabinet Office circulars. These set the context, rules and roles for the investment management system:
The Cabinet Manual sets out the principles of Cabinet decision-making and the types of matters that Ministers must submit to Cabinet for consideration, and how policy proposals should be developed: in particular sections 5.11- 5.38 Principles of Cabinet decision-making
Cabinet Office circulars set out more detailed requirements:
- CO(18) 2 Proposals with Financial Implications and Financial Authorities covers the treatment of proposals with financial implications (whether in the budget process or not)
- CO(19) 6 Investment Management and Asset Performance in the State Services sets out investment decision rights in departments and Crown entities, and mandates investment processes including:
- long-term investment planning and reporting, including benefits reporting
- the Government Procurement Rules
- the Risk Profile Assessment
- assurance plans
- Gateway and other investment reviews
- Treasury’s Better Business Cases Framework.
Chief Executives must ensure agencies adopt and apply, as good management practice, Treasury guidance on investment management, including business cases.
Boards of Crown entities and companies should adopt and apply, as good management practice, Treasury guidance on investment management, including business cases.