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Treasury's Central Role in Public Sector Management

Explore the key scene, constitutional setting, legislative framework, and principles of Treasury's central role in public sector management. Learn about its functions, leadership in fiscal affairs, and impact on State sector performance. Gain insights into New Zealand's GDP trends, debt management, and Treasury's engagement with central agencies. Delve into the personal reflections of those involved in this complex yet rewarding role.

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Treasury's Central Role in Public Sector Management

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  1. John Whitehead Secretary to the Treasury (Kaitohutohu Kaupapa Rawa: “the people who advise on everything to do with the resources”) Treasury’s Central Role

  2. 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

  3. Scene settingTreasury – 160 years in the making

  4. 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

  5. Treasury analysts – no normal life? No normal life? Tom Scott

  6. 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

  7. 120,000 100,000 80,000 $ Million 60,000 40,000 20,000 0 1860 1872 1884 1896 1908 1920 1932 1944 1956 1968 1980 1992 Year New Zealand’s GDP 1860 – 2004

  8. Treasury sees storm clouds Treasury officials always saw a cloud somewhere. Bob Brockie, National Business Review

  9. Net and gross public debt (% GDP) (1972- 2004) 80.0 70.0 60.0 50.0 % of GDP 40.0 30.0 20.0 10.0 0.0 1972 1977 1982 1987 1992 1997 2002 Year ended 30 June Gross debt - % of GDP Net Debt - % of GDP

  10. Constitutional setting and public sector

  11. 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

  12. Treasury’s outcome priorities

  13. Legislative framework • No expenditure without appropriationPublic Finance Act 1989 • Devolved accountabilityState Sector Act 1988 • Fiscal responsibility Fiscal Responsibility Act 1994 • Enterprise governanceState-Owned Enterprises Act 1986 • The Public Finance (State Sector Management) Bill

  14. Public sector financial management • Supports constitutional structure and actors • Provides accountability and Parliamentary scrutiny • Encompasses different organisational forms

  15. 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

  16. Public management system:Central agency engagement DPMC/SSC/Treasury: public management system supports high performing State sector SSC/Treasury: State sector agencies improve social, economic and environmental outcomes DPMC/Treasury:Government strategy and priorities coordinated and appropriately resourced DPMC & SSC with Treasury: CEs understand and translate government direction and decisions for State sector

  17. 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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