Download Treasury`s Central Role

Treasury’s Central Role
John Whitehead
Secretary to the Treasury
(Kaitohutohu Kaupapa Rawa: “the people who advise
on everything to do with the resources”)
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What I’ll cover
• Scene setting
• Constitutional setting and public sector
management
 Legislative framework and principles
 Public sector (financial) management
 Treasury and other “central agencies”
• Some personal reflections
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Scene setting
Treasury – 160 years in
the making
Treasury and the Secretary:
roles and functions
Treasury, Secretary:
• No establishing legislation
• Relevant Acts (esp Public Finance Act
1989, Fiscal Responsibility Act 1994)
• Fulfils Finance Ministers & Cabinet
demands
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Treasury analysts – no normal life?
No normal life?
Tom Scott
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Treasury roles cont’d
Treasury roles include:
• Lead economic and fiscal advisor
• Manages, monitors Crown financial affairs
– incl budget
• “Second-opinion” advice – all Cabinet proposals
• “Central agency” leadership – State sector
performance
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New Zealand’s GDP 1860 – 2004
120,000
$ Million
100,000
80,000
60,000
40,000
20,000
0
1860 1872 1884 1896 1908 1920 1932 1944 1956 1968 1980 1992
Year
Treasury sees storm clouds
Treasury officials always saw a cloud somewhere.
Bob Brockie, National Business Review
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Net and gross public debt (% GDP)
(1972- 2004)
80.0
% of GDP
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
1972
1977
1982
1987
1992
1997
Year ended 30 June
Gross debt - % of GDP
Net Debt - % of GDP
2002
Constitutional setting
and
public sector
Constitutional setting
Parliament controls public finances:
appropriates funding to government
Treasury advises:
 Select Committees: budgeting, reporting,
performance
 Finance Ministers and Cabinet: all fiscal and
economic implications and results
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Treasury’s outcome priorities
Legislative framework
• No expenditure without appropriation
Public Finance Act 1989
• Devolved accountability
State Sector Act 1988
• Fiscal responsibility
Fiscal Responsibility Act 1994
• Enterprise governance
State-Owned Enterprises Act 1986
• The Public Finance (State Sector
Management) Bill
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Public sector financial management
• Supports constitutional structure and
actors
• Provides accountability and Parliamentary
scrutiny
• Encompasses different organisational
forms
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Public management system:
building blocks
• Design of State sector
• Decision making system
• Resource allocation system
• Accountability system
• Leadership, values, culture across system
• Relationship between community,
politicians and State sector
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Public management system:
Central agency engagement
DPMC/SSC/Treasury:
public management system
supports high performing
State sector
SSC
Treasury
SSC/Treasury:
State sector agencies
improve social, economic
and environmental outcomes
DPMC/Treasury:
Government strategy and
priorities coordinated and
appropriately resourced
DPMC
DPMC & SSC with Treasury:
CEs understand and translate
government direction and
decisions for State sector
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Personal Reflections
• It’s a big role
• It’s a complex role
• It can be difficult
• It’s not necessarily popular
• But it’s incredibly rewarding
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