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© The Treasury Improving the Living Standards of New Zealanders - Working Together for Better Policy Advice Policy Relevant Research & Analysis: Knowledge.

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Presentation on theme: "© The Treasury Improving the Living Standards of New Zealanders - Working Together for Better Policy Advice Policy Relevant Research & Analysis: Knowledge."— Presentation transcript:

1 © The Treasury Improving the Living Standards of New Zealanders - Working Together for Better Policy Advice Policy Relevant Research & Analysis: Knowledge Hubs - Sharing, Connecting and Discussing Girol Karacaoglu Chief Economist The Treasury CONNECTING WITH UNIVERSITIES AND GOVERNMENT AGENCIES Joey Au Committee Member Government Economics Network (GEN)

2 © The Treasury WHAT ARE WE TRYING TO ACHIEVE? 1.Building a database of Economics research capability, as well as ongoing research, across the public sector, universities, and research institutions in New Zealand. 2.Creating a network across all people and institutions undertaking policy relevant research with a view to enhancing the transparency and quality of policy-supporting 3.Promoting Treasury’s Living Standards Framework as a possible vehicle for collaborative work on policy design and advice.

3 © The Treasury ABOUT GEN WEBSITE:

4 © The Treasury ABOUT GEN The Network has three aims: support economics training and professional development; develop linkages between economists; and strengthen economic advice to government.

5 © The Treasury ABOUT GEN

6 © The Treasury Joey Au Policy Relevant Research & Analysis: Knowledge Hubs - Sharing, Connecting and Discussing Committee Member – GEN & Advisor – The Treasury

7 © The Treasury Researchers Universities Policy Analysts Government Agencies Influence policy Produce quality policy advice Higher Living Standards for NZers WORKING TOGETHER FOR BETTER POLICY ADVICE & RAISE LIVING STANDARDS

8 K EY A TTRIBUTES OF THE C ENTRE O UTCOMES S OUGHT A ‘S TRAW -M AN ’ – E NHANCING R ESEARCH C APABILITY Public Sector TSY MoBIE MSD MOEMoH Etc. Private Sector NZIER BERL Etc. Motu Universities Otago Waikato VUW Auck. Etc. Overseas Universities IMF OECD Public & Private sector Etc. Well connected, strong networks. Ability to coach & mentor junior researchers. Intellectually brilliant, policy focused researchers. C ENTRE OF E XCELLENCE This is not about more funding, it is about using existing funding and capabilities to greater effect. Improve Co-ordination & Coherence... Coherent programmes of long term research need to be developed. Increase Consistency & Standards... Clear and consistent research standards need to be applied and adhered to. Lift Capability... Stronger capability to undertake research, commission research and interpret research. Clearer pathways required for researchers in the public sector.

9 © The Treasury ONE SMALL STEP FORWARD: PRODUCTIVITY (HUB) Combine CollaboratePrioritise

10 © The Treasury ONE STEP SIDEWAYS NO VEHICLE FOR PEOPLE TO SHARE, CONNECT AND DISCUSS

11 © The Treasury SOME PRINCIPLES 1. Share 2. Connect 3. Discuss Universities Government Agencies Policy Analysts Researchers

12 © The Treasury KNOWLEDGE HUBS (WEBSITE): PRODUCTIVITY HUB 1. Share 2. Connect 3. Discuss

13 © The Treasury Improving the Living Standards of New Zealanders - Working Together for Better Policy Advice Girol Karacaoglu Chief Economist The Treasury

14 © The Treasury Treasury’s Vision To be a world class Treasury working for higher living standards for New Zealanders. 14

15 © The Treasury The OECD 15

16 © The Treasury Distribution within the population and over time Subjective Wellbeing The Living Standards Framework 16

17 © The Treasury Fundamentals – WHAT is it all about? What is “improving standards of living” all about? It is about increasing the freedoms of individuals to enjoy the kinds of lives they wish to live. [Amartya Sen’s concept of justice and human rights. ] Need to focus on achieving this across society and across generations – that is what equity and sustainability are all about. 17

18 © The Treasury Using LSF to Guide Policy Advice  Practical  Focused  Measureable 18

19 © The Treasury Increasing Equity Social Infrastructure Sustainability for the Future Economic Growth Managing Risk FINANCIAL & PHYSICAL Financial Wealth Housing Infrastructure NATURAL Climate Biodiversity Water SOCIAL Institutions Trust HUMAN Skills Health Living Standards 19 A Proxy Social Welfare Function for NZ

20 © The Treasury Key Policy Question Instead of thinking of trade-offs between the five corners of the living standards cobweb, can we come up with policies that make these corners mutually reinforcing – so that we can create an expanding dynamic cobweb? 20

21 © The Treasury 21 Note: This is intended to demonstrate how the diagram could be used, rather than a Treasury view of the recommendations

22 © The Treasury WHAT should be the focus of government-policy interventions (in support of market processes) – Government Roles? 22 Providing opportunities Building capabilities Improving incentives Removing obstacles Higher Living Standards Capabilities Obstacles Opportunities Incentives All of the above are about maintaining and building: physical/financial capital human capital social capital natural capital

23 © The Treasury Current Policy Levers: BIM 23 Providing opportunities Building capabilities Improving incentives Removing obstacles Higher Living Standards Capabilities Obstacles Opportunities Incentives growth-supporting infrastructure support business-led R&D work-based training youth agenda welfare reform labour market reform tax reform education reform wide access to health care international linkages programme removing international trade and investment obstacles improving economic stability improving public-sector productivity work on long-term fiscal strategy All of the above are about maintaining and building: physical/financial capital human capital social capital natural capital

24 © The Treasury Policy Tools  Fiscal Tools  Government Expenditure  Taxes  Public Debt and Public Loans  Regulatory Tools  Regulations  Authorisations  Other Tools  Ownership  Contingent Liabilities  Nudging or Cajoling 24

25 © The Treasury Increasing Equity Social Infrastructure Sustainability for the Future Economic Growth Managing Risk FINANCIAL & PHYSICAL Financial Wealth Housing Infrastructure NATURAL Climate Biodiversity Water SOCIAL Institutions Trust HUMAN Skills Health Living Standards 25 How might we measure progress for New Zealand? NNI / capita NII position of NZ Reducing crime rate Reduction in social welfare dependency % of population below 50% of median income Difference in the PISA score between the top and bottom 10% of students gross capital formation GHG emissions tonnes/capita % aged between with tertiary qualifications World Bank government effectiveness indicator World Values Survey: social trust indicator

26 © The Treasury THE LIVING STANDARDS HUB Going live 2 nd April 2013 – Register in advance,

27 © The Treasury 27 Reduces intergenerational equity Increases within generation equity Example: Effect of a PAYGO-funded expansion of New Zealand Superannuation Reduces investment risk Increases wage growth risk

28 © The Treasury Example: Effect of a SAYGO-funded expansion of New Zealand Superannuation 28

29 © The Treasury Economic Growth Sustainability for the future Increasing Equity Social Infrastructure Reducing Risks

30 © The Treasury Example: Living Standards Assessment: Risk Management Method: Increasing the freedoms of individuals to enjoy desired lifestyles Elements: PhysicalHuman SocialNatural Capital CapitalCapital Capital Risks Earthquakes CrimeWelfare dependencyClimate Change e.g.Floods Ill health Economic crisesBiodiversity risks Eruptions Skill Deficiency Education failureErosion Infrastructure disrepair Civic society failure White elephants Mitigations Insurance Education PolicyWelfare ReformEmissions Trading 30

31 © The Treasury Next Steps  USE IT  Encouraging various teams within Treasury to trial the framework and share what they learn with other teams.  Encouraging teams within Treasury to work with people from across the public sector in developing and using the framework, and associated measures.  PROMOTE IT  Ongoing presentations to various audiences (universities, public sector agencies,...) to explain the work and seek feedback.  DEVELOP IT  Ongoing work to set up teams, within Treasury and across the public sector, to progress research and measurement within each “corner” of the cobweb.  Sharing what we learn by trying with all so that we can improve ways in which we can enhance the framework for better policy guidance. 31


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