New Zealand’s Treasury has two big jobs that nobody else can do.
They’re both highlighted in the first line of Treasury’s ‘Who we are’ website. Treasury is “the Government’s lead economic and financial adviser and steward of the public sector financial management systems.”
June’s Performance Improvement Review for Treasury did not go well at all on one of those big jobs. It may point to issues in staff capabilities.
Treasury provides regular reports on staff gender and ethnicity, with the most recent release just a couple of weeks ago. But Treasury does not know what proportion of its staff has training in economics. Or at least it does not have systems that maintain accurate data on current staff.
It may be a problem, given the results of the Performance Improvement Review.
These reviews assess how things are going in different parts of government. Treasury’s assessment weighed its preparedness for future challenges across its core functions.
The four-point assessment scale runs from a top score of ‘leading’, then to ‘embedding’, followed by ‘developing’ and ‘weak’. The category names make about as much sense as NCEA’s soon-to-be-abolished ‘achieved’ for ‘barely adequate’. But the important thing is that a ‘weak’ rating is bad and comes with a big red box on the assessment scorecard.
Treasury received a big red ‘weak’ box for its core function of effectively delivering economic policy advice. It seems a potential problem when one of Treasury’s two big jobs is being the Government’s lead economic and financial adviser. And it’s the only red box in what is otherwise a sea of middling scores, with no areas in which Treasury is ‘leading’.
Further down in the review, we see staff turnover and unplanned turnover rates consistently above the public service average. Things were worse in 2022. But there’s no general hopeful trend in that data, especially given 2025’s increase.
The Review also noted that Treasury does not seem to bring an internally consistent view to policy issues.
An overemphasis on consistency can be a problem – it too easily leads to middle-managers stifling competent juniors whose work leads in inconvenient directions. But mainstream economic training provides a framework for consistent thinking across policy areas. A lack of consistency could signal that economic training is less common than it should be.
The review also noted concerns about Treasury’s loss of ‘wise owls’ thinning commercial and economic depth. “Economic depth” was one of the areas cited as needing “deliberate capability investment”.
I became concerned about Treasury’s economic capabilities a few years ago. The results of some 2018 OIA requests did not provide comfort. Among staff working as analysts, senior analysts, principal advisors and senior managers, economists were in the minority – at least among those whose qualifications were known to Treasury’s HR systems.
And it appeared that my very small shop, The New Zealand Initiative, had more PhD economists on staff than Treasury did in those categories – though I suspect that result was because Treasury missed a couple in its counting exercise.
The problem was not just the lack of economists. Treasury had no systematic way of telling how many economists it had. The OIA request provided the building blocks for the only comprehensive picture. Treasury had not known and did not seem bothered by not knowing.
I became worried again when I saw that big red box next to Treasury’s economic policy advice.
I made two requests. The first was a media request for information that might help with this column. The second was a more thoroughgoing OIA request building on the old 2018 request.
If Treasury had a dashboard tracking workforce qualifications along with their gender and ethnicity, they could tell me the results. If they didn’t, the OIA request would help me get a better picture later this year.
There has been laudable improvement in new hiring. Treasury tells me that five of six new senior leadership appointments have a Bachelor or Masters degree in economics or finance. And three quarters of recently recruited graduate analysts majored in economics.
But Treasury also told me that they collect qualification data only when employees join Treasury, and that they have not consistently recorded it over the years. If an employee gains a qualification while at Treasury, HR might not be aware of it.
By contrast, Treasury knows the ethnicity of 97.5% of its staff.
I look forward to the eventual OIA release with more comprehensive information, including on how things are going with Treasury’s internal economics training programmes.
But the situation remains less than ideal. Treasury knows far more about the demographic profile of its staffing muster than it does about staff qualifications relevant to Treasury’s core role as lead economic adviser – a role in which it is currently considered ‘weak’.
If an organisation measures what it cares about, what should we conclude about Treasury’s priorities?
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was sourced HERE
It may be a problem, given the results of the Performance Improvement Review.
These reviews assess how things are going in different parts of government. Treasury’s assessment weighed its preparedness for future challenges across its core functions.
The four-point assessment scale runs from a top score of ‘leading’, then to ‘embedding’, followed by ‘developing’ and ‘weak’. The category names make about as much sense as NCEA’s soon-to-be-abolished ‘achieved’ for ‘barely adequate’. But the important thing is that a ‘weak’ rating is bad and comes with a big red box on the assessment scorecard.
Treasury received a big red ‘weak’ box for its core function of effectively delivering economic policy advice. It seems a potential problem when one of Treasury’s two big jobs is being the Government’s lead economic and financial adviser. And it’s the only red box in what is otherwise a sea of middling scores, with no areas in which Treasury is ‘leading’.
Further down in the review, we see staff turnover and unplanned turnover rates consistently above the public service average. Things were worse in 2022. But there’s no general hopeful trend in that data, especially given 2025’s increase.
The Review also noted that Treasury does not seem to bring an internally consistent view to policy issues.
An overemphasis on consistency can be a problem – it too easily leads to middle-managers stifling competent juniors whose work leads in inconvenient directions. But mainstream economic training provides a framework for consistent thinking across policy areas. A lack of consistency could signal that economic training is less common than it should be.
The review also noted concerns about Treasury’s loss of ‘wise owls’ thinning commercial and economic depth. “Economic depth” was one of the areas cited as needing “deliberate capability investment”.
I became concerned about Treasury’s economic capabilities a few years ago. The results of some 2018 OIA requests did not provide comfort. Among staff working as analysts, senior analysts, principal advisors and senior managers, economists were in the minority – at least among those whose qualifications were known to Treasury’s HR systems.
And it appeared that my very small shop, The New Zealand Initiative, had more PhD economists on staff than Treasury did in those categories – though I suspect that result was because Treasury missed a couple in its counting exercise.
The problem was not just the lack of economists. Treasury had no systematic way of telling how many economists it had. The OIA request provided the building blocks for the only comprehensive picture. Treasury had not known and did not seem bothered by not knowing.
I became worried again when I saw that big red box next to Treasury’s economic policy advice.
I made two requests. The first was a media request for information that might help with this column. The second was a more thoroughgoing OIA request building on the old 2018 request.
If Treasury had a dashboard tracking workforce qualifications along with their gender and ethnicity, they could tell me the results. If they didn’t, the OIA request would help me get a better picture later this year.
There has been laudable improvement in new hiring. Treasury tells me that five of six new senior leadership appointments have a Bachelor or Masters degree in economics or finance. And three quarters of recently recruited graduate analysts majored in economics.
But Treasury also told me that they collect qualification data only when employees join Treasury, and that they have not consistently recorded it over the years. If an employee gains a qualification while at Treasury, HR might not be aware of it.
By contrast, Treasury knows the ethnicity of 97.5% of its staff.
I look forward to the eventual OIA release with more comprehensive information, including on how things are going with Treasury’s internal economics training programmes.
But the situation remains less than ideal. Treasury knows far more about the demographic profile of its staffing muster than it does about staff qualifications relevant to Treasury’s core role as lead economic adviser – a role in which it is currently considered ‘weak’.
If an organisation measures what it cares about, what should we conclude about Treasury’s priorities?
Dr Eric Crampton is Chief Economist at the New Zealand Initiative. This article was sourced HERE
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