Enhancing New Zealand’s financial management

Measures to modernise the framework New Zealand governments use to manage public finances took a step forward today, Finance Minister Grant Robertson said on Wednesday.

“The Public Finance Act (PFA) is an important part of providing accountability and transparency in how Government’s manage our finances,” Grant Robertson says.

“As part of our plan to deliver a Wellbeing Budget in 2019, we are making an important addition to the Public Finance Act which sets out what Governments must report on,” Grant Robertson says.  

The amendments will introduce requirements for

  • the Government to set out how its wellbeing objectives, along with its fiscal objectives, will guide its Budget decisions; and
  • the Treasury to report on wellbeing indicators, alongside macroeconomic and fiscal indicators.

These amendments sit alongside already-announced amendments to the State Sector Act to help create a more integrated and effective public sector.

“I encourage people to submit their views on this proposal, and be a part of the wider conversation on how governments can use a wellbeing approach to support strategic decision-making,” Grant Robertson says.

Also released on Wednesday, by Associate Finance Minister James Shaw, is a public consultation on the planned Independent Fiscal Institution.

Establishing the institution, which would monitor the Government’s adherence to its Budget Responsibility Rules and provide political parties with independent, costings on their policies, was signalled as part of Budget 2018.

“The Government is committed to responsible fiscal management. An independent body like this would help strengthen both accountability and public debate over the country’s fiscal performance. It will also support political parties’ development of public policy and provide the public with confidence about the costings of those policies,” says James Shaw.

“We want to hear the public’s views on establishing an Independent Fiscal Institution (IFI) as well as their thoughts on the roles such an independent body could have,” James Shaw said.

“The Government’s taking every step to having a sustainable, productive, and inclusive economy. Responsible management of the government’s books is essential to this, and to improving the inter-generational wellbeing of all New Zealanders,” Grant Robertson says.

More information can be found at the following sites:

https://treasury.govt.nz/public-finance-system/establishing-independent-fiscal-institution

https://treasury.govt.nz/public-finance-system/embedding-wellbeing