\u201cThis set in motion a self-reinforcing dynamic in which ministers became less confident in the Treasury\u2019s advice, the department\u2019s influence across the system reduced, and the Treasury lost talented people, and collective confidence, becoming more risk-averse and less ambitious,\u201d the report said. <\/p>\n
The report calls for Treasury to \u201cwork at pace to regain its reputation as ambitious and to act with urgency and clarity to provide the strategic leadership and trusted advice that supports New Zealand to navigate fiscal and economic uncertainty, realise opportunities, and lift living standards for all New Zealanders\u201d.<\/p>\n
Specifically, Treasury needs to start \u201cbending two curves\u201d – the growth curve needs to curve up, while the debt curve needs to bend down. <\/p>\n
Economic policy advice \u2018weak\u2019<\/p>\n
The report gives a \u201cweak\u201d rating to Treasury\u2019s ability to effectively deliver economic policy advice. It gave a \u201cdeveloping\u201d rating to Treasury\u2019s ability to deliver budget and fiscal management and system and sector performance. <\/p>\n
Missed issues at ACC, Health NZ, and the Interislander ferries<\/p>\n
Recently, public finances were hit by large deficits at ACC and Health NZ, creating a massive political headache for the Government. The Interislander ferry replacements have also caused problems.<\/p>\n
The report said Treasury missed aspects of these organisations\u2019 problems, while they were growing. <\/p>\n
\u201cCore function \u2013 Economic policy advice monitoring of ACC was seen as having failed to identify and escalate emerging performance issues, contributing to multiple independent reviews,\u201d the review said. <\/p>\n
The report said there was some confusion about Treasury\u2019s role in monitoring the spending of some agencies. The Ministry of Health, for example, is the monitoring department of Health NZ, the Government agency with the largest operating budget. Treasury\u2019s role in this arrangement is unclear \u2013 despite Treasury having overall responsibility for the spending of government money. <\/p>\n
\u201c[A]n area of concern raised by interviewees was the apparent lack of clarity about the Treasury\u2019s role in relation to the fiscal and value for money performance of some of these large entities for which the Treasury is not the monitor, particularly Health New Zealand (Health NZ) and to a lesser extent K\u0101inga Ora and the New Zealand Transport Agency (NZTA),\u201d the report said. <\/p>\n
The report said \u201cunanticipated and material cost overruns\u201d at Health NZ \u201caffected Ministers\u2019 trust and confidence in the advice they were receiving from Health NZ, the Ministry of Health and the Treasury\u201d.<\/p>\n
The report noted that ministers \u201cdid not regard the Treasury\u2019s commercial advice on replacement Interislander ferries as robust, which reduced their confidence in the Treasury\u2019s capability in commercial transactions more generally\u201d.<\/p>\n
\u201cSome interviewees questioned whether the Treasury has enough senior leaders with deep commercial expertise,\u201d the report said. <\/p>\n
The report also criticised Treasury\u2019s monitoring of infrastructure projects more generally.<\/p>\n
It cited the example of \u201ctwo recent PPP projects proceeding without an up-to-date PPP policy framework setting out when and how this model should be used\u201d as well as \u201congoing conflation of funding and financing\u201d and a \u201clack of coherence in the government\u2019s response to unsolicited infrastructure proposals\u201d.<\/p>\n
Stuck in the 1990s and 1980s<\/p>\n
Interviewees said Treasury had \u201cunder-contributed at the economy-wide level in recent years\u201d and that it had not brought \u201cpractical thinking\u201d to the Government\u2019s economic growth agenda.<\/p>\n
\u201cSome interviewees felt it had few concrete ideas to contribute, including on the \u2018next big idea\u2019,\u201d the report said. <\/p>\n
Other interviewees, however, questioned whether Treasury\u2019s thinking \u201cremained too shaped by the economic orthodoxy developed internationally in the 1980s and 1990s, much of which is still relevant but may no longer be sufficient\u201d. <\/p>\n
No longer seen as employer of choice<\/p>\n
The report said Treasury was \u201cno longer the employer of choice it once was\u201d.<\/p>\n
The report said Treasury was \u201coperating in a constrained labour market, and this is placing sustained pressure on its ability to attract, retain and grow high-quality talent\u201d.<\/p>\n
In the past, the report said, Treasury was \u201cwidely regarded as a high-profile training ground for public sector leaders\u201d.<\/p>\n
Interviewees described it as \u201cthe gate you had to get through\u201d and \u201ca real place of debate and challenge that the brightest and best went to\u201d, the report said.<\/p>\n
Cost savings \u2018simplistic\u2019, potential for AI<\/p>\n
People interviewed for the report raised concerns about the recent round of cost savings which were \u201crelatively simplistic\u201d.<\/p>\n
\u201cLimitations in the quality of data available to the Treasury were another recurring theme,\u201d the report said. <\/p>\n
\u201cInterviewees pointed, for example, to weak or inconsistent costing of individual services, noting that this reflects both agency capability and the system settings and expectations under which cost information is produced,\u201d it said.<\/p>\n
Some interviewees said there was potential for AI to do some of the lower value work.<\/p>\n
Treasury responds<\/p>\n
Treasury Secretary Iain Rennie welcomed the review.<\/p>\n
\u201cWhile it was good to see that the reviewers found strength in some areas of our operations, such as our Budget processes, it is clear there is room for improvement and faster change in several aspects of our performance,\u201d he said .<\/p>\n
\u201cAs the PIR points out, we must focus on deepening our economic advice and analysis, providing greater strategic financial leadership across the system and improving the way we engage with New Zealanders both on the long-term fiscal challenges and decisions we face as a country, but also in understanding the opportunities and barriers to achieving economic growth.<\/p>\n
\u201cIt had been over a decade since our last independent review and much has changed since then. When I commissioned the PIR, I wanted an external perspective on our performance and where we need to focus our efforts to better meet current and future demands.\u201d <\/p>\n","protected":false},"excerpt":{"rendered":"\u201cThis set in motion a self-reinforcing dynamic in which ministers became less confident in the Treasury\u2019s advice, the…\n","protected":false},"author":2,"featured_media":502569,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[59784,1665,74,95,1975,250844,250845,2950,4187,12864,77631,10668,11424,72763,3011,266,134,13640,59517,11556,42677,14771,3025,111,43,139,69,17711,6777,1560,762,1963,68635,25187,27037],"class_list":["post-502568","post","type-post","status-publish","format-standard","has-post-thumbnail","category-new-zealand","tag-acc","tag-advice","tag-after","tag-and","tag-at","tag-blowouts","tag-blunders","tag-confidence","tag-cost","tag-criticises","tag-damning","tag-economic","tag-finds","tag-forecasting","tag-four","tag-government","tag-health","tag-important","tag-improvement","tag-losing","tag-ministers","tag-missed","tag-most","tag-new-zealand","tag-news","tag-newzealand","tag-nz","tag-parts","tag-performance","tag-report","tag-review","tag-series","tag-slowly","tag-treasury","tag-weak"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/502568","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/comments?post=502568"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/posts\/502568\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media\/502569"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/media?parent=502568"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/categories?post=502568"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/nz\/wp-json\/wp\/v2\/tags?post=502568"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}