Summary of 2015 OBI Results New Zealand A strong institutional framework supports extensive public availability of budget information and has helped New Zealand retain its top rank on the OBI for fiscal transparency. (Score = 88/100, stable but down slightly from 93/100 in 2012). However, results from the 2015 Open Budget Survey also point to clear opportunities for improvement in each of the following areas:  Transparency  Public Participation (across all three segments)  Oversight (particularly on the part of the legislature)

Transparency  Citizens Budget (see Q.64-67, including comment/peer review) Substantial gaps in scope, content and presentation CB documentation not available across all stages of budget cycle Fragmentation across separate documents produced for other purposes and audiences (e.g. political, technical, etc.) Terminology overly technical in areas (e.g. tax revenue & macroeconomics)  Opportunity to produce purpose-specific Citizens Budget documentation across full scope of budget cycle to enhance public awareness, understanding and engagement.  Reporting on Tax Expenditures (see Q.45, including comments) Narrow scope and lack of transparent objective criteria for reporting Insufficient quantification and explanation of individual items NZ Treasury/Govt perspective “out of sync” with international best practice  Opportunity to produce a more thorough, objective and transparent reporting on a fuller scope of individual tax expenditures.

CountryScore South Korea83 Philippines67 New Zealand65 Thailand42 Vietnam42 Indonesia35 Papua New Guinea23 Regional Comparison (2015 OBS Global Average 25/100) Public Participation Regional comparison of composite scores for public participation shows New Zealand lagging well behind South Korea and roughly on par with Philippines.

Public Participation (see Section 5, Q ) The 2015 OBS includes an assessment of the scope and mechanisms for public engagement across stages of the budget cycle and with each of three key public sector participants (Executive, Parliament and Office of Auditor General). Results are not particularly favourable for New Zealand, most notably with respect to pubic engagement in activities of Parliament and Office of Auditor General.  Executive (72/100 - “adequate”)  Legislature (60/100 - “limited”)  Supreme Audit (59/100 - “limited”)

OBS results highlight need to strengthen (or establish) substantive mechanisms to support active public engagement in budget processes on a regular basis throughout the budget cycle.  Executive - formalise specific requirements and specific mechanisms for executive engagement with the public at different stages of budget cycle;  Legislature - increase the scope for public testimony and participation in Parliamentary hearings on: (i) budget strategic policies; (ii) macro-fiscal framework; and (iii) proposed budgets for individual government agencies;  Supreme Audit - strengthen formal mechanisms for pubic consultation and engagement in selection and conduct of audits, and for dissemination of how public input is used. Public Participation - Establishing substantive mechanisms

Oversight by Legislature  Planning (50/100 - “limited”)  Implementation (40/100 - “weak”)  IBP Recommendation - Establish an independent Parliamentary Budget Office to strengthen capacity to engage more actively and independently in assessing: Executive’s strategic budget policies; macro-fiscal framework; budget planning for sectors and budget entities; and use of resources during budget implementation.

Comment on OBS Assessment of Parliamentary Oversight It is worth noting explicitly that elements and criteria of the OBS assessment of what constitutes an “appropriate” or “suitable” role for legislative bodies do not align to or accommodate fundamental institutions (roles, processes and relationships) characteristic of:  New Zealand’s unicameral Westminster parliamentary structure and the role of members of the “Executive” within Parliament (and vice versa); and  Specific elements of New Zealand budget institutions under the Public Finance Act (PFA) and other related parts of the PFM institutional framework. Particular issues arise around reliance on Parliamentary approval of imprest supply bills, scope of delegation for expenditure management for budget implementation, use of supplemental estimates for ex post authorization and heavy emphasis on other ex post accountability mechanisms.