NZ Treasury to study policy advice after papers miss target for technical quality

Thursday 22nd October 2015

The Treasury will put its policy advice under the microscope to figure out if it has a "systemic" problem after missing its technical performance target, and will revisit regulatory impact statements which were well short of expectations.

The government's financial adviser plans to develop a series of recommendations relying on its best policy advice, and is investigating a series of weaker reports "to decide whether they are representative of more systemic issues," after only 68 percent of its papers surveyed had an adequate technical quality, missing its 70 percent target. A panel appointed to review the Treasury's policy advice found those papers included were well written and showed a deep understanding of the issues, but those with lower scores didn't discuss enough alternative options, lacked detail on how conclusions were reached, and failed to set advice within a broader context.

"While the distance between our target and our actual score is unlikely to be statistically significant, and our score is not notably out of step with results from prior years, we take this result as an indication that we need to do more work to ensure that our quality standards for policy advice are being consistently applied across the Treasury," it said in its annual report.

The Treasury met its target of satisfying the minister of finance, crossing the 70 percent target with a performance of 78.3 percent, and its total cost per hour of producing outputs came in below target at $183.

Last year, an external report of the Treasury's fiscal advice by Teresa Ter-Minassian, a former director of the fiscal affairs department at the International Monetary Fund, found it was generally consistent with sound principles and practices for responsible fiscal management, and had become more inclusive in recent years. She said the department could improve by undertaking more analysis of the magnitude and possible mitigation of risks to New Zealand's farming sector, and to lift attention to rising debt of some local government authorities.

The Treasury's annual report showed just 63 percent of regulatory impact statements met regulatory impact analysis requirements, short of the 90 percent target, and the third year in a row that goal has been missed.

"This and other indicators of RIS quality do not indicate perceptible improvements in the quality of RISs across government," the report said. "The Treasury is re-looking at the indicators, investigating the barriers to improved performance and developing initiatives to address them."

An evaluation of regulatory impact statements by Sapere Research Group this year found just 15 of 50 documents met quality assurance standards, a further 25 partially met them, and 10 didn't meet them.

Similarly, the Treasury's annual report shows just 44 percent of significant new operating expenditure programmes during the Budget were subject to a cost benefit analysis, less than half the targeted 100 percent.

"While the Treasury analysed and provided advice to Budget Ministers on all significant operating initiatives, cost benefit analysis was not always completed by departments," the report said. "This was often owing to initiatives for new funding which were developed late, or outside of, the planned Budget process.

"The Treasury continues to look for opportunities to improve performance in this area including furthering work done and initiated during 2014/15 to develop cost benefit analysis tools."

The report says the department has been looking at ways it can lift efficiency, using "lean" techniques to save time and make work easier, and has developed a more intensive graduate development programme and introduced standardised tools to monitor financial performance across public spending as ways to enhance its performance.

BusinessDesk.co.nz

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