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Cabinet Paper DEV-19-SUB-0265 by Office of the Minister of Finance: Expectations for Investment and Asset Management in the State Services
- This paper seeks Cabinet approval to replace Cabinet Office circular CO(15)5 Investment Management and Asset performance in the State Services with a new circular that reflects the Government’s policy and expectations for the management of capital assets and investments.
- For over 20 years, successive governments have set out in Cabinet Office circulars their expectations about the way departments and most Crown entities will manage capital assets and investments. The current circular was published in mid-2015.
- Cabinet expectations add an important operational and system dimension to the financial management and stewardship responsibilities set out in law, including the Public Finance Act, the State Sector Act and the Crown Entities Act.
- It is timely to update and replace the current circular to reflect two important changes in policy and practice under this Government. The first of those is the establishment of the New Zealand Infrastructure Commission, Te Waihanga (NZIC). The circular helps Ministers and agencies understand the NZIC infrastructure strategy and investment support roles alongside those of other system leaders.
- The second important change is the Government’s intention to apply a wellbeing approach to all its activity including its investments. The new circular places much more emphasis on the importance of delivering intergenerational value from government assets and investments, as well as clarifying expectations for how agencies should work together on investments.
- In addition to accommodating those changes the new circular has been streamlined in several respects, for example by removing some detailed content and making this available to agencies on the Treasury or State Services Commission (SSC) websites.
- While these changes future-proof the new circular to some extent, it may still be necessary to take a more fundamental look at the circular within 12-18 months depending on, for example, the outcome of changes in relevant state sector legislation or the Treasury’s public finance system work programme.
- Subject to Cabinet agreement, the new circular will take effect on 1 October 2019, or on a date to be determined by the Minister of Finance taking account of the establishment date for the NZIC.