New Zealand Treasury

The New Zealand Treasury (Māori: Te Tai Ōhanga) is the central public service department of New Zealand charged with advising the Government on economic policy, assisting with improving the performance of New Zealand's economy, and managing financial resources.

The Treasury
Te Tai Ōhanga
Agency overview
Formed1840
JurisdictionNew Zealand
HeadquartersLevel 3,
1 The Terrace,
Wellington 6011
Employees529
Annual budgetVote Finance
Total budget for 2019/20
$6,149,948,000[1]
Minister responsible
Agency executive
  • Caralee McLiesh,
    Chief Executive and Secretary
Websitetreasury.govt.nz

Treasury has four main functions:

  • Provide advice to improve economic and fiscal conditions for high levels of economic growth and improved living standards.
  • Monitor and manage the financial affairs of the Crown.
  • Assess and test other Government agencies’ advice and proposals that have economic and financial implications.
  • Provide leadership, with other central agencies, to develop a high-performing State sector.

History

The Treasury is one of New Zealand's oldest institutions, having been first established in 1840. Initially the Treasury consisted of just a few officials responsible for managing the Government's day-to-day financial affairs. In the 1920s the department took on a supervisory role over other departments’ spending and oversight of government borrowing.[3]

However, the most dramatic change to the role of the Treasury came in the 1950s when the department began to develop its role as economic advisor to the Government. The Treasury "hit the spotlight" in this role during a wave of far-reaching, and often controversial, economic reforms in the 1980s and early 1990s. This period also coincided with a general shift towards higher scrutiny of government activity and performance, making the Finance portfolio and Treasury operations more transparent.

Since the 1950s, the Treasury has evolved from being a control agency to a "central agency". During this time, departments have become largely free to manage their own resources, with the Treasury's role being to provide central agency leadership, co-ordination and monitoring.

Between 2008 and 2011 Treasury administered the Crown Retail Deposit Guarantee Scheme. Under the scheme the government bailed out nine finance firms including South Canterbury Finance to the value of approximately $2 billion.[4]

Today the Treasury employs 363 people, is the Government's lead advisor on economic and financial policy, and has the overall vision of helping governments achieve higher living standards for New Zealanders.

Role

Specific areas of work undertaken by the Treasury include:

  • advice on the government's economic strategy and macroeconomic policies
  • advice on financial and public sector management systems
  • advice on tax strategy, including the objectives of the tax system and the choice and mix of taxes
  • advice on Budget strategy and the design of the Budget process. This includes managing the Budget initiatives process and producing the Budget documents
  • preparation and publication of macroeconomic, tax revenue and fiscal forecasts, and monitoring of the domestic and international economies
  • preparation and publication of monthly and annual consolidated Crown financial statements
  • management of the Crown's debt portfolio and associated financial investments
  • management of commercial, contractual and Treaty of Waitangi-related claims against the Crown
  • advice on the Crown's ownership interests in Crown companies including state-owned enterprises (SOEs), Crown financial institutions and Air New Zealand
  • advice on policy interventions, departmental votes and Crown entities to ensure the state's resources and powers are used effectively to achieve the results sought by the elected Government.

Ministers

The Treasury serves 7 portfolios and 5 ministers.[5]

OFFICEHOLDERPORTFOLIO(S)OTHER RESPONSIBILITY(IES)
Hon Grant RobertsonLead Minister (The Treasury)
Deputy Prime Minister
Minister of Finance
Minister for Infrastructure
Hon Dr Megan WoodsAssociate Minister of Finance
Hon Chris HipkinsMinister for COVID-19 Response
Minister for the Public Service
Hon David ParkerMinister of RevenueAssociate Minister of Finance
Hon Dr David ClarkMinister of State Owned EnterprisesMinister Responsible for the Earthquake Commission

List of Secretaries to the Treasury

The Secretary to the Treasury is the public service head of the department.

NameDates
George Cooper1840–1842
Alexander Shepherd1842–1856
Christopher Richmond1857–1858
G. C. Rodda1935–1939
Bernard C. Ashwin1939–1955
Ed Greensmith1955–1964
Doug Barker1964–
Noel Davis−1968
Henry Lang1968–1977
Noel Vernon Lough1977–1980
Bernie Galvin1980–1986
Graham Scott1986–1993
Murray Horn1993–1998
Alan Bollard1998 – April 2002
Mark Prebble (acting)April 2002 – 8 April 2003
John Whitehead8 April 2003 – 1 June 2011
Gabriel Makhlouf1 June 2011 – 27 June 2019
Caralee McLiesh 16 September 2019 –

Structure

Senior leadership[6]

  • Secretary and Chief Executive
    • Chief Economist and Deputy Secretary, Economic System
    • Chief Operating Officer and Deputy Secretary, Strategy, Performance & Engagement
    • Deputy Secretary, Budget & Public Services
    • Deputy Secretary, Financial & Commercial Operations
    • Deputy Secretary, Growth & Public Services
    • Deputy Secretary, Macroeconomics & Growth

Units within the Treasury

Debt Management Office

The New Zealand Debt Management Office (NZDMO) is the part of The Treasury responsible for managing the Crown's debt, its cash flows and its interest-bearing deposits. The 1988 reforms of the Government's financial management led to its establishment with the aim of improving the management of the Government's debt portfolio.[7]

Central Agencies Shared Services

Central Agencies Shared Services (CASS) is a shared services centre housed within the Treasury. Set up in March 2012, it provides information technology and management, human resources, and finance services to the Treasury, the Department of the Prime Minister and Cabinet, and the State Services Commission.[8] Aside from providing these services, the goal of CASS is to set an example for other state sector organisations in sharing service delivery functions.[9]

Crown company monitoring

The Crown owns many companies, including state-owned enterprises, Crown entities, and Crown Research Institutes. The Treasury's Commercial Operations group assists the Crown in the running of these. This group includes what was the Crown Ownership Monitoring Unit (COMU, pronounced "co-moo") from November 2009 to February 2014,[10] and before that the Crown Company Monitoring and Advisory Unit.[11]

Controversies

The Treasury has courted controversy, particularly since the Rogernomics reforms of the 1980s. Given the agency's key influence and impact on fiscal policy, it has been accused by critics in recent years of inaccurate forecasts,[12] regulatory capture and political partisanism,[13][14][15][16] and accepting corporate gifts from the financial industry.[17][18]

References
  1. "Total Appropriations for Each Vote". Budget 2019. The Treasury.
  2. "Ministerial List". Department of the Prime Minister and Cabinet. Retrieved 15 December 2020.
  3. "History of the Treasury". The Treasury. 10 October 2014.
  4. "The Treasury: Implementing and managing the Crown Retail Deposit Guarantee Scheme" (PDF). Office of the Auditor-General. New Zealand Government. September 2011. Retrieved 1 May 2015.
  5. "Our Ministers". The Treasury. Retrieved 15 December 2020.
  6. "Treasury Organisation Structure – The Treasury – New Zealand". treasury.govt.nz. Retrieved 30 August 2016.
  7. "Welcome to the New Zealand Debt Management Office (NZDMO)". New Zealand Debt Management Office. Retrieved 15 March 2014.
  8. "Central Agencies Shared Services (CASS)". The Treasury. 18 September 2014. Retrieved 10 May 2016.
  9. Setting up Central Agencies Shared Services (PDF) (Report). Wellington: Controller and Auditor-General of New Zealand. June 2014. p. 7.
  10. "Treasury completes review of commercial operations". Treasury. 19 December 2013. Retrieved 15 March 2014.
  11. "Corporate governance". 2010 Annual Portfolio Report. Crown Ownership Monitoring Unit. 19 December 2013. Retrieved 15 March 2014.
  12. Bernard Hickey (15 May 2011). "Take forecasts with grain of salt". The New Zealand Herald. Auckland.
  13. "Treasury defends accounting practice of not booking potential SOE dividend losses from SOE sell-down until after election". Interest.co.nz. 29 February 2012.
  14. John Hartevelt (21 March 2012). "Stick to knitting, teachers tell Treasury". Dominion Post. Wellington.
  15. John Armstrong (7 April 2012). "Commission fiddles while its cred burns". The New Zealand Herald. Wellington.
  16. Paul McBeth (24 January 2012). "Treasury stuck in its ways – stakeholders". The New Zealand Herald.
  17. John Hartevelt (23 July 2011). "Treasury gift investigation considered". Dominion Post. Wellington.
  18. John Hartevelt (22 July 2011). "Greens demand audit over corporate gifts". Dominion Post. Wellington.
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