This presentation was made by Andrew BLAZEY, New Zealand at the 13th Annual Meeting of OECD-Asian Senior Budget Officials held in Bangkok, Thailand, on 14-15 December 2017

1. Data Analytics & Public
Expenditure
Presentation for the OECD
Asian Senior Budget Officials’ Meeting
14 – 15 December 2017
Andrew Blazey
Director, New Zealand Treasury

2. • Introduction
• Developments in New Zealand
• Five elements
• Illustrating the impacts
• Progress & challenges
• Looking ahead
• Conclusion
Contents

3. • Technology and analytics have helped generate insights to help
increase the effectiveness of public expenditure.
• Most countries are undertaking a range of initiatives to achieve a
similar outcome.
• In New Zealand, our experience is that it’s not easy, design and
implementation is not complete, but there is compelling evidence
supporting the goal.
• This presentation looks at the New Zealand experience to date, with
an emphasis on the social sector of government expenditure.
• It looks at specific initiatives, the progress and challenges, and the
future direction based on the experience to date.
Introduction

4. Developments in New Zealand
• Social investment
• Implementation initiatives
• Connecting the system

5. Connections across the system
Welfare
Education
Health
Justice
Social
HousingAccident
Compen-
sation
Children
Forecast Expenditure 2018
Welfare & Housing
Health
Justice
Education
74%
Economic Development
Central Administration
Other
26%
Core Crown 100%
Source: Budget Economic & Fiscal Update

6.  Keeping the needs of people foremost in mind and thinking
holistically about the support that can be provided, regardless of
organisational boundaries.
 Having a clear objective of what is to be achieved for the best
possible social outcome.
 Taking a long-term perspective and being prepared to invest now
for benefits in the future.
 Taking an evidence-based approach to decision making, based on
analysis of data and the results achieved.
 Applying investment principles and practices to guide the initiative.
Social Investment in New Zealand

7. Implementing initiatives
Specific initiatives in the New Zealand context
1. Use information to better understand peoples’ needs (e.g. Analytics
and Insights).
2. Set measurable outcomes (e.g. Welfare modelling).
3. Connect to the allocation of resources, including through the
government’s budget (e.g. Cost Benefit Analysis).
4. Purchase outcomes / move funding to effective uses (e.g.
Productivity Commission Inquiry).
5. Measure progress to improve services and inform future
investment decisions (e.g. Social Investment Agency).
6. Join-up the leadership of the sector (e.g. Social Investment Board).

8. • Data & analytics
• Budget & fiscal management
• Commissioning
• System design and leadership
• Outcomes framework
Five Elements

9. 1. Data & analysis
Integrated data for a better New Zealand
Statistics New Zealand operates a five-safes environment, balancing privacy and confidentiality with
data insights. For information about applying to use the IDI or to learn about how we keep the data safe,
see www.stats.govt.nz/idi
Statistics New Zealand’s Integrated Data
Infrastructure (IDI) is a rich analytical
environment comprising linked
administrative data from across
government, and survey data such as the
2013 Census.
The IDI provides a longitudinal view of
people and their families through their
interactions with government. It is a safe
access point for researchers to utilise the
resulting data.
The Integrated Data team refresh the IDI
quarterly, facilitate the sharing of
metadata and code, and support other
capability building to optimise the use of
the tool.
The Longitudinal Business Database
(LBD) complements the IDI with
microdata about businesses.

10. 2. Budget and fiscal management
• Using the Cost Benefit Analysis-X
tool provides an impacts database
to consistently quantify benefits.
• Scrutiny from an investment panel
of external practitioners and
experts.
• Ex post evaluation and scrutiny of
existing spending and settings.
• Integrate into the fiscal
management system and focus
benefit realisation and risk
management.
Proposal 12
Proposal 4
Proposal 1
Proposal 5
Proposal 6 Proposal 9
Proposal 7
Proposal 3
Proposal 8
Proposal 10
Proposal 11
0
1
2
3
4
5
0 1 2 3 4 5
Degree of
alignment
Benefits to costs
Proposal 2
Strategicalignment
Informing Ministers’ Decisions
Rating of benefits vs. costs
Reference: http://www.treasury.govt.nz/publications/guidance/planning/costbenefitanalysis/cbax

11. • Increase the understanding of commissioning.
• Consider a wide range of services models and match the
models to the needs of individual(s).
• Support an agency to take the lead on commissioning
practices to raise capability.
• Support service providers to innovate to achieve the
desired outcomes, including:
– Devolved service models
– Rewarding innovation
– Contracting for outcomes, and
– Increased transparency on service performance.
3. Commissioning
Source: http://www.treasury.govt.nz/statesector/nzpcsocser/rec-response-nzpc-may17.pdf

12. • Working beyond organisational boundaries to focus on
the needs of people and the services they require has
brought about changes to the system, including:
– Social Investment Board
– Social Investment Agency, and
– Oranga Tamariki.
4. System leadership
Fiscal Inputs
Agencies
ResultsValue
Outputs
?
Fiscal Inputs
Agencies
and
others
Value = Results
Outcomes

13. 5. Outcomes
• Reducing welfare dependence
• More and better education
• Lower rates of crime
• Reduced recidivism
• Increased and better quality
employment
• Improved health
• Improved quality of life

14. Measuring progress towards outcomes
Source: http://www.ssc.govt.nz/bps-snapshot

15. Illustrating the impact
• Social issues to understand
• Identification of risk
• Understanding the whole picture
• Making changes based on new
information

16. • What type of issues can data and analytics help improve the
effectiveness and efficiency of public expenditure to achieve
outcomes?
Social issues to better understand
What should I
study?
Should
international
students be
allowed longer
work
entitlements?
What is the
impact of mental
health on
education and
employment?
How can crime
and harm from
crime be
prevented?
How can we act
early to improve
the lives of
children at risk?
How do we
improve outcomes
for the homeless?

17. Identification of risk

18. Understanding the whole picture
• Understanding the benefits and costs across a range of
government services

19. Making changes based on new information
• An example of resource allocations in the Ministry of Social
Development

20. Progress & Challenges

21. Progress – some results to date
Financial
• $13.7 billion reduction in future lifetime cost of the welfare system
• 24 per cent reduction in sole parent benefit recipients
• 17 per cent reduction in benefit-dependent homes
Non-Financial
• Shared accountability across government agencies for social
outcomes e.g. the Better Public Services (BPS) Outcomes.
• Evidence of new commissioning practices to achieve results– social
impact bonds, placed-based initiatives.
• Increased contestability of advice on social outcomes evidenced
through the use of science advisors, Non-governmental organisation
(NGO) participation and adoption of the Open Government
Initiatives.

22. • The lag between action and results in data sets
• The design of interventions to improve outcomes for
people in need
• Adapting the approaches for application outside the
social sector
• Integration into fiscal management frameworks
• Communication to support public debate
Challenges

23. Looking ahead
• Future direction
• Living Standards Framework
• Wellbeing indicators

24. • Implementing a Living
Standards Framework
• Greater focus on wellbeing
• Improved prioritisation of
investment choices
• Learning from international
experiences
• Public trust and social licence
Future direction

25. Living Standards Framework
• The New Zealand Treasury uses a Living
Standards Framework to consider the
impact of policies on intergenerational
wellbeing.
• It supplements income measures to more
fully answer questions about current
outcomes, sustainability and the resilience.
• Practical implementation of the LSF would
see Treasury no longer silo its economic
policy work (such as the Economic and
Fiscal Update) from its role overseeing
agency expenditure and cost effectiveness
• The Framework draws on OECD analysis of
indicators of wellbeing.
Source: https://livingstandards.treasury.govt.nz/

26. Wellbeing outcomes
• Current outcomes are assessed
using indices of both quality of life
and material conditions.
• Each element has a distribution in
the population and may vary across
sub-populations.
• It cannot be measured as a single
number without making significant
value judgements e.g. how
important is health relative to
income.
• We are investigating supplements
to OECD measures to capture New
Zealand specific issues

27. Wellbeing outcomes
Dimension Indicators
Housing
• Housing expenditure • Dwellings with basic facilities
• Rooms per person
Income • Household financial wealth
• Household net adjusted disposable
income
Jobs
• Job security • Personal earnings
• Long-term unemployment rate • Employment rate
Community • Quality of support network
Education
• Years in education • Student skills
• Educational attainment
Environment • Water quality • Air Quality
Civic Engagement
• Stakeholder engagement for developing
regulations
• Voter turnout
• Corruption
Health
• Self-reported health • Life expectancy
• Suicide rate
Life Satisfaction • Life satisfaction
Safety • Homicide rate • Feeling safe walking alone at night
Work-Life Balance
• Time devoted to leisure and personal care • Employees working very long hours
• Volunteering
Cultural Identity
• Local Content on New Zealand television
• Maori language speakers
• Language retention
Provisional table of current wellbeing indicators for New Zealand.
Indicators in light blue are proposed New Zealand specific measures.

28. • Evidenced-based policy and expenditure is not new, but advances in
technology and analytics have brought new insight to improve
decision-making and resource allocation.
• The initiatives adopted in New Zealand, illustrate a comprehensive
change programme across institutions, accountability arrangements,
fiscal management, service design, and review in order to fully apply
the insights from technology and analytics in public expenditure.
• Results to date are driving further development and investment, but
there appears no single solution or approach to achieving the
outcomes.
• Insights from across countries are helping to frame, implement and
review the initiatives adopted in New Zealand.
Conclusions

29. Thank you
www.treasury.govt.nz