The Finance and Expenditure Committee has initiated an inquiry into performance reporting and public accountability and agreed a general process and timeline for the inquiry.

The full terms of reference for the inquiry are appended to this media release.

Cameron Brewer, Chair of the Finance and Expenditure Committee, said “The committee looks forward to progressing this inquiry over the coming months. The ultimate goal is to recommend improvements to how the government of the day shows what has been achieved with taxpayers' money, further enhancing its accountability to Parliament and the public.”

Hon Dr Deborah Russell, senior Labour Party member on the committee, said, “The inquiry is an important opportunity for Parliament to consider what information it has to hold the executive to account for its performance.”

Background: why is the inquiry needed?

Performance reporting is about showing what has been achieved with public money. Public accountability is about how the public and Parliament holds the executive responsible for the use of the powers that Parliament has delegated to it, including the use of public money.

The existing performance reporting system may no longer be fit-for-purpose. The information it generates is hard to understand and it does not enable Parliament or the public to understand what outcomes and value is being achieved with public money. This affects the ability of Parliament to hold the executive to account. We believe that now is the right time to explore what improvements could be made to reporting systems.

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The Review of Standing Orders 2023 recommended that an ad hoc committee be established to initiate an inquiry into central government performance reporting and public accountability. The Finance and Expenditure Committee has decided to take on the inquiry, given its responsibilities and interest in the subject area.

Goals of the inquiry

The inquiry has two goals:

1. To make findings concerning the strengths and weaknesses of how the Government should report on and be held to account for its performance.
2. To make recommendations aimed at ensuring that the way the Government reports on and is held to account for its performance is fit-for-purpose in meeting the needs and expectations of 21st century New Zealand.

Intended process and timeline

The committee will be supported in its work by advisers from the Office of the Auditor-General and the Treasury. The committee intends to also appoint an independent specialist adviser.

The committee intends to progress the inquiry in two phases:

Phase one is intended to run from April to August 2025. The aim of this phase is for the committee to agree on a precise problem definition and establish a shared understanding of the relevant issues and potential direction of travel. The committee will produce a discussion document, in the form of an interim report, that members of the public will be able to engage with and make submissions on.

Phase two is intended to run from September 2025 to May 2026. This phase will see the committee analyse the submissions from the public, hold hearings, and receive further advice before ultimately producing a final report that contains specific recommendations for improvements to performance reporting and public accountability settings.

Terms of reference for the inquiry

The Finance and Expenditure Committee will undertake an inquiry into how the Executive should report on and be held to account for its performance.

The overarching purpose of the inquiry is to make specific and actionable recommendations to strengthen the accountability of the Executive to Parliament and the public for its performance. The inquiry will:

• make findings concerning the strengths and weaknesses of how the government should report on and be held to account for its performance; and
• make recommendations aimed at ensuring that the way the government reports on and is held to account for its performance is fit-for-purpose in meeting the needs and expectations of 21st century New Zealand.

It is anticipated that recommendations will be aimed at improving both legislative settings (e.g. the Public Finance Act and the Crown Entities Act) and how those settings are given effect.

A select committee inquiry is a particularly appropriate process because of the central role that Parliament plays in holding the Executive to account for its performance. It will provide Parliament with an opportunity to express its expectations to current and future governments about the information that it needs to undertake its scrutiny.

The committee is particularly interested in:

• What the purpose of the performance reporting system should be;
• What kind of information Parliament and the public need to hold the Executive to account for its performance, including its efficiency and effectiveness;
• How reporting can provide clear information about what the Executive is seeking to achieve, its strategies and plans, how they are connected through to spending, and, ultimately, the progress that is being made;
• What levels the Executive should report on spending and performance (e.g., services, initiatives, agencies, collaborative arrangements, sectors, all-of-government);
• How reporting can support a sufficient focus on outcomes, including equity and the long-term and complex challenges facing New Zealand;

In engaging with these issues, the committee will consider:

• the strengths of the current system and the key issues, gaps, barriers, and challenges that need to be addressed (and the incentives underpinning them).
• the changes (to system settings, legislation, capability, and culture) that are needed to build on those strengths and overcome those issues, barriers, and challenges.
• the trade-offs that would be involved in implementing any changes, including the administrative costs to public organisations.
• what can we learn from other jurisdictions.

The committee may, as it thinks fit, consider other matters relevant to the purpose of the inquiry.

The committee is particularly interested in hearing from members of the public about what their expectations are, in terms of:

• the information that they need to understand and assess the performance of government.
• how Parliament should use that information to assess the performance of government.

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