Treasury’s 2017/18 year shaped by Living Standards Framework and supporting new Government

The Treasury Annual Report 2017/18 highlights many areas of work where the Treasury can take pride in its performance, Secretary to the Treasury Gabriel Makhlouf said today.

Mr Makhlouf made particular mention of the Treasury’s work on New Zealand’s three economic pillars, the publication of the Investment Statement, and further development of the Treasury’s Living Standards Framework (LSF).

“We provided advice to the new Government on the modernisation of the Reserve Bank of New Zealand Act 1989 and have worked with the Bank and the Government’s Independent Expert Advisory Panel on the creation of a modern monetary and financial policy framework. Phase 1 of the Review on monetary policy was completed during 2017/18 and phase 2 on financial stability has started.

“The Treasury is also supporting the Government in its review of the third pillar – New Zealand’s fiscal framework – with the release of a discussion document on the creation of a new independent fiscal institution.

“Our latest Investment Statement, He Puna Hao Pātiki – which analyses the government balance sheet and its management – was published in March. The balance sheet represents the investment made by government on behalf of New Zealanders in schools, hospitals, financial assets and commercial enterprises among other things. Managing the balance sheet well is essential for delivering public services that provide value for money and improve the living standards of New Zealanders. He Puna Hao Pātiki differs from earlier Statements in one important respect. It uses the organising principles in the LSF and has a chapter on broadening the Investment Statement to include natural capital considerations.

“Work on the Treasury’s LSF expanded greatly in scope and significance in 2017/18 following the new Government’s decision to use it to support its first Wellbeing Budget in 2019. We published a number of discussion documents including on a dashboard of wellbeing indicators. From a historical perspective, the LSF is a leap of thinking that echoes the many transformations in the Treasury’s past, by looking to integrate a broader conception of economics and value into the everyday work of public policy.

The LSF has also shaped our approach to this Annual Report, which sets out how we are doing in our journey towards improved wellbeing and living standards. The report emphasises our development work on the LSF, our shift in thinking towards intergenerational wellbeing and using the LSF in our analysis, and how we are influencing the State sector to think in that direction.”

Mr Makhlouf noted that there were substantial changes to the context of the Treasury’s work in 2017/18.

“With the change in government, the Treasury adapted to meet the needs of new Ministers and help implement the Government’s policies. This transition led to some programmes of work being stopped, such as sales of social housing. It also led to the Treasury taking on major new work programmes that were not in our Statement of Intent.

“We have had significant success in re-orienting our work to support the priorities of the new Government. We also acknowledge that achieving this has had repercussions. The need to provide Ministers with advice on complex issues within tight timeframes sometimes had an impact on the quality of what we were able to deliver. It also meant many of our staff worked long hours over sustained periods, with a consequent effect on their wellbeing. We recognise these issues and are taking steps to address them.

“The Treasury’s own wellbeing relies on the dedication and talent of the people who are a part of it. I want to thank all members of the Treasury whānau for the energy and expertise they dedicate to raising living standards for New Zealanders.”

The Treasury Annual Report 2017/18 is available on the Treasury website: https://treasury.govt.nz/publications/annual-report/2018

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