Treasury Strategic Framework 2012-13

Secretary's Message

Treasury's Strategic Framework sets out our mission and priorities, our roles and responsibilities.

Treasury's work is underpinned by our ability to anticipate and analyse economic issues, consult widely, manage risk and allocate our resources efficiently.

The Framework highlights Treasury's important contribution as a central policy agency within the Australian Public Service, where we seek to play a vital role in an evolving Australia, always striving to formulate policy advice that incorporates both the full range of economic issues and a broad wellbeing framework.

It also sets out the values and capabilities we bring to our work, which are to be highly competent and credible in the face of new challenges and rising pressures. Our people are our key strength, are highly adaptable, and strive to preserve Treasury's long-held and well-earned place as an esteemed and trusted part of Australia's institutional fabric.

In addition to our central policy advisory role, Treasury is continuing its work in progressing our two organisational reviews — the Strategic Review and the Progressing Women initiative. We remain committed to building a more inclusive workplace, strengthening our engagement with stakeholders, further enhancing our training and career development systems, strengthening our governance and accountability processes, and measuring our success in these areas.

The Treasury's Mission

The Treasury's mission is to improve the wellbeing of the Australian people by providing sound and timely advice to the government, based on objective and thorough analysis of options, and by assisting the Treasury ministers in the administration of their responsibilities and the implementation of government decisions.

The Wellbeing of the Australian People

In undertaking its mission Treasury takes a broad view of wellbeing as primarily reflecting a person's substantive freedom to lead a life they have reason to value.

This view encompasses more than is directly captured by commonly used measures of economic activity. It gives prominence to respecting the informed preferences of individuals, while allowing scope for broader social actions and choices. It is open to both subjective and objective notions of wellbeing, and to concerns for outcomes and consequences as well as for rights and liberties.

Treasury brings a whole-of-economy approach to providing advice to government based on an objective and thorough analysis of options. To facilitate that analysis, we have identified five dimensions that directly or indirectly have important implications for wellbeing and are particularly relevant to Treasury. These dimensions are:

• The set of opportunities available to people. This includes not only the level of goods and services that can be consumed, but good health and environmental amenity, leisure and intangibles such as personal and social activities, community participation and political rights and freedoms.
• The distribution of those opportunities across the Australian people. In particular, that all Australians have the opportunity to lead a fulfilling life and participate meaningfully in society.
• The sustainability of those opportunities available over time. In particular, consideration of whether the productive base needed to generate opportunities (the total stock of capital, including human, physical, social and natural assets) is maintained or enhanced for current and future generations.
• The overall level and allocation of risk borne by individuals and the community. This includes a concern for the ability, and inability, of individuals to manage the level and nature of the risks they face.
• The complexity of the choices facing individuals and the community. Our concerns include the costs of dealing with unwanted complexity, the transparency of government and the ability of individuals and the community to make choices and trade-offs that better match their preferences.

These dimensions reinforce our conviction that trade-offs matter deeply, both between and within dimensions. The dimensions do not provide a simple checklist: rather their consideration provides the broad context for the use of the best available economic and other analytical frameworks, evidence and measures.

The Treasury Values

Treasury people are skilled professionals, committed to providing quality advice, thinking analytically and strategically, and striving to achieve long-term benefits for all Australians. We uphold the important values and behaviours that shape the Treasury culture. These values influence all aspects of the way we work.

Treasury People

• strive for excellence;
• value teamwork, consultation and sharing of ideas;
• value diversity among our people;
• treat everyone with respect;
• exhibit honesty in all our dealings; and
• treat colleagues with fairness.

Treasury People Management Principles

• open, two-way communications at all levels;
• clearly define accountabilities;
• work performance is the basis for remuneration, which is determined by fair and transparent processes; and
• facilitation of an appropriate work and private life balance.

What We Do

Outcome

The Treasury makes informed decisions on the development and implementation of policies to improve the wellbeing of the Australian people, including by achieving strong, sustainable economic growth, through the provision of advice to government and the efficient administration of federal financial relations.

There are four policy groups that contribute to this outcome: Macroeconomic; Fiscal; Revenue; and Markets Group. Their work covers four areas:

Sound Macroeconomic Environment

To promote a sound macroeconomic environment, the Treasury:

• monitors and analyses economic conditions, both in Australia and overseas;
• provides advice on macroeconomic policy, and assessments of government policies;
• uses global and regional forums and bilateral relationships to advance Australia's interests and improve the international economic environment; and
• assists other governments in Asia and the south-west Pacific to improve economic governance.

Effective Government Spending Arrangements

To assist in formulating, implementing and explaining government spending decisions, the Treasury:

• provides advice on fiscal strategy that aims to ensure fiscal sustainability over the economic cycle;
• provides advice on effective government spending arrangements that contributes to improving the wellbeing of Australians, including on industry, environment, defence and social policy;
• provides advice on Commonwealth-State financial policy, and supports Commonwealth-State relationships, including through the coordination and delivery of various Commonwealth-State forums, the progress of COAG reform agendas and implementation of the Intergovernmental Agreement on Federal Financial Relations; and
• advises on budget policies and prepares the Commonwealth Budget and other financial-related papers required under the Charter of Budget Honesty Act 1998.

Effective Taxation and Retirement Income Arrangements

To contribute to effective taxation and retirement income arrangements, the Treasury:

• analyses the economic and social effects of policy proposals and develops policy options;
• provides advice to portfolio ministers to assist in formulating, implementing and explaining government decisions on taxation and retirement income arrangements;
• contributes to the development of laws that effectively implement government decisions; and
• provides revenue costings, forecasts and projections.

Well-functioning Markets

To contribute to well-functioning markets, the Treasury:

• fosters competitive and efficient markets;
• pursues efficient development and implementation of foreign investment and trade policy to support Australia's national interest;
• promotes a well-functioning and competitive financial system;
• promotes sound corporate practices and financial reporting;
• provides advice on regulation of corporations and financial services;
• reduces the regulatory burden on business; and
• provides advice on improving housing supply and affordability.

The Treasury's Priorities

Policy Priorities

The Treasury's policy priority is to support continued improvement in the wellbeing of Australians. This includes addressing the challenges of structural change in the Australian economy, and ensuring that Australia remains well-placed to deal with weakness and uncertainty in the global economy, by maintaining a strong and robust financial system and ensuring the appropriateness of our economic policy settings.

• Continue to support the Government to implement its fiscal strategy through providing advice on effective government spending and effective taxation and retirement income arrangements, as well as debt management policy.
• Provide advice on the economic outlook and key risks facing the global economy, including weak and fragile growth in the major advanced economies and the potential for negative spillovers to major emerging markets, sovereign debt concerns in the major advanced economies, financial market conditions, and volatile commodity prices.
• Provide advice on setting sound macroeconomic policies and assessments of government policies, including ensuring that our economic policy settings enable us to make the most of the opportunities and challenges for Australia coming from the global shift in the weight of economic activity towards Asia.
• Provide policy advice on environmental and social sustainability, including health reforms, aged care, skills and education, disability support, climate change, investment in clean energy, and water reform.
• Take the primary role in assisting the Government to implement its taxation reform agenda, including the delivery of smarter regulation of the not-for-profit sector, improvements to the retirement income system, and supporting longer term reform directions for the business tax system.
• Pursue sound regulatory and competition reforms aimed at improving Australia's productivity and international competitiveness, and efficient development and implementation of foreign investment policy to support Australia's national interest.
• Continue and strengthen our deep engagement in the G-20 agenda and regional forums, enhance our multilateral and bilateral outreach in the lead up to Australia's G-20 host year in 2014, and support and reform the international financial institutions, particularly the IMF.

Organisational Priorities

The Treasury is currently undertaking substantial work in strengthening our organisational capacity and external engagement, building more robust support systems for our staff, and ensuring that the ongoing reduction in our funding is managed effectively.

Through our Progressing Women initiative and the outcomes from the Strategic Review, the Treasury is committed to building a more inclusive workplace and retaining the features of our department that uphold our Treasury values.

A range of strategies are being progressively implemented. These strategies relate to leadership, governance and accountability; workplace policies; training and networks; performance assessment and career development; and measuring success. These are being developed through such measures as the strengthening of our mentoring systems, ensuring flexible work arrangements are available and through a refresh of our Performance Management System.

Role of the Executive Board

The Secretary, Executive Directors and General Manager, Corporate Services Group, make up the Executive Board. The role of the Board is to provide support to the Secretary, set strategic direction for the Treasury and to ensure robust and effective governance.

The Inclusive Workplace Committee has been established to discharge the duties of the Board in relation to the Progressing Women initiative. The Committee comprises the Board, the General Manager of People and Organisational Strategy Division, four other Treasury officers and two external members.

The Treasury's Organisational Capabilities

The Treasury utilises and develops its technical expertise, knowledge base and support systems to deliver on our priorities. To maximise our potential, we nurture and strengthen our core organisational capabilities and consistently seek better ways to do business.

Organisational Capabilities

Deep Understanding

Understanding our mission, the economic and policy environment, and the views of our stakeholders.

Collaboration

Collaborating with internal and external stakeholders to develop effective policy.

Proactivity and Vision

Anticipating policy, implementation and organisational issues.

Influence and Reputation

Building trust with the Government and other stakeholders, and influencing the policy agenda.

Improvement and Adaptability

Being flexible, adaptable and innovative.

Efficiency and Productivity

Managing costs, allocating resources and enabling efficiencies.

Risk Management Framework

Risk management is integral to the Treasury's planning and governance framework. The Executive Board has responsibility for the oversight of risk management in the department. The Treasury Audit Committee assists the Executive Board by ensuring that the risk management strategy remains current and focused on areas of greatest risk.

The Executive Board has identified seven key risks which the Treasury needs to manage in 2012-13. The responsibility for mitigating these risks is shared collectively by the areas facing them. Specific risks and mitigation strategies are identified in group and divisional operational plans, and in group and departmental risk registers.

Seven Key Strategic Departmental Risks

• Policy advice lacks quality, practicality and consistency.
• Policy implementation does not give effect to intended outcomes.
• Failure to deliver key outputs in a timely manner and to sustain capabilities in the short, medium or longer term.
• Failure to influence and sustain constructive relationships with government, external contacts, stakeholders and other agencies.
• Failure to identify emerging issues and optimise potential gains and opportunities.
• Failure to deliver outputs efficiently.
• Failure to attract, develop and retain staff possessing the required skills and attributes.

The Treasury Budget for 2012-13

The Treasury has been appropriated around $147 million for 2012-13 (excluding terminating funding associated with the G-20 and the Clean Energy Finance Corporation), compared to around $156 million in 2011-12, to fund its operations. The department is expected to have an average staffing level of around 900 for 2012-13 (excluding terminating funding associated with the G-20 and the Clean Energy Finance Corporation), down from around 1000 for 2011-12, with the vast majority of staff located in Canberra. The department is currently on a two year path to reduce our expenditure and staff numbers in line with the funding reductions whilst ensuring that we continue to build and strengthen our organisational capacity and our ability to deliver on our mission.

Contact Details

Langton Crescent, PARKES ACT 2600, Australia
T 02 6263 2111 | F 02 6263 2614
www.treasury.gov.au