Part 3: Looking after our natural resources and physical assets

Reflections from our audits: Our future needs - is the public sector ready?

Understand the resources you rely on

Prioritisation. 3.1
If you rely on something, you need to recognise it and manage it over the long term. This is a simple, generic point that is equally applicable to natural resources (such as our indigenous biodiversity), economic advantages (such as our largely pest-free status for primary production exports), and built assets and physical infrastructure (such as our transport, water, and wastewater infrastructure). Our information assets can also be thought of in this way (see Part 6).

Stewardhip. 3.2
More than any other developed country, our country depends on biosecurity. Biosecurity is fundamental to New Zealand's economic health and natural heritage. The Department of Conservation (DOC) administers about one third of New Zealand's land. Our public sector manages physical assets valued at more than $210 billion.

Decision-makers need good information about these assets and future asset needs to appropriately manage maintenance, renewal, and investments. So, the first step is to recognise the resources that we all rely on so that we can collect useful information – such as age, condition, risks, expected life and value – to help us manage them sustainably.

Making good choices about where we spend our scarce resources is critical to ensuring that the public sector delivers the right services. Prioritising is vital in making good choices. This is especially so because of the complex and interrelated problems facing New Zealand (outlined in Part 1) that will continue to put financial and service expectation pressure on the public sector. The public sector will need to be in a position to make the right calls on questions about large investments in assets and using resources.

We looked at the natural resources and other assets that support the delivery of public services. We asked whether important resources were being managed well to deliver the services needed in the future.

Long-term planning is vital for good stewardship

We see an increasing emphasis on long-term financial planning and stewardship of public assets and resources – this is vital because government assets generally last a long time.

More emphasis is being put on stewardship of assets and long-term planning in public sector governance and legislation. For local authorities, the Local Government Act 2002 prescribed a 10-year planning horizon to help set priorities, requiring local authorities to map out where they expect to focus their resources. The focus on effective contribution from the community continues to grow.

In central government, agencies are increasingly being asked to use longer-term planning horizons, such as preparing four-year plans. Recent legislative amendments will have implications for planning and for agencies' stewardship of their resources – for example, by putting greater focus on sector-wide outcomes.

Big challenges for biosecurity and biodiversity

New Zealand is home to an exceptionally high number of indigenous species, many of which are not found anywhere else. Our internationally renowned lands and waterways attract many tourists.

Biosecurity is fundamental to New Zealand's economic health and natural heritage. No border control is 100% effective, so it is important that New Zealand is prepared to deal with incursions effectively. In our report, Ministry for Primary Industries: Preparing for and responding to biosecurity incursions, we concluded that New Zealand is under-prepared for potential incursions from some high-risk organisms. The Ministry of Primary Industries has good work under way to address this.

In our report, Department of Conservation: Prioritising and partnering to manage biodiversity, we found that although DOC is recognised for its leading conservation methods and practices, it is not winning the battle against the threats to New Zealand's indigenous species and their habitats. Recent research shows that, at best, efforts to date are merely slowing the decline of biodiversity, which is a cause for concern. The job of managing biodiversity on conservation land is far greater than the resources available.

DOC has a difficult and complicated task in managing biodiversity on conservation land and waterways. The task crosses geographical boundaries – between private and public land and waterways – and organisational boundaries at various levels of government and outside government. We saw that the decisions that DOC makes using its prioritisation tools will have long-term effects and, therefore, are critical. This includes fitting regional partnerships into an integrated, strategic framework.

We have questions at the system level about prioritisation and trade-offs. As the DOC example shows, trade-offs and opportunity costs relating to services that benefit the public sector as a whole should not be considered within appropriations for single public entities. They need to be looked at and understood from a whole-of-system perspective.

Plans are worth doing only if they are useful and used

Overall, evidence about stewardship and prioritisation presents a mixed picture.

In our report on managing public assets, we noted that public entities understood the importance of planning for assets and that most public assets were in suitable condition to provide services. However, more than half of public assets were not being managed in keeping with a plan and nearly half of assets were known not to have any deferred maintenance or renewals. These assets with unknown and known amounts of maintenance and renewal deferrals had lower condition ratings than those without deferrals.

The need to plan for assets over the long term is increasingly recognised. The same effort is needed to maintain and renew these assets.

Decisions about priorities should be made deliberately, based on good information and discussion

Sometimes, a complex balance needs to be struck between protecting and preserving resources and using them to meet current needs and deliver services. Finding this balance relies on:

  • good information and long-term forecasting of the availability of resources and the demand for resource use – this data is vital to inform strategies and decision-making about how to balance supply and demand; and
  • communication and co-operation between public entities and with the public to recognise the range of needs and interests and have the "right debate" about the issues, choices, and implications – this is fundamental to working out approaches that users and the public accept and support.

A prerequisite for improving stewardship and prioritisation of assets is to understand whether outcomes are actually being or have been achieved and, therefore, whether prioritisation is having the desired effect. This is achieved through high-quality measuring of performance, monitoring, and evaluating the consequences of policies and interventions. Good data is vital.

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