The Treasury New Zealand's social discount rate

Feb 17, 2025

Registrations are open for our joint Motu / Treasury New Zealand Public Policy Seminar on the Treasury's social discount rate.

Date and time: Monday, 17 February from 11am to 12.30pm
Location: The Treasury, level 3, 1 The Terrace, Wellington OR ON VIDEO CALL

In 2024, the Treasury changed the social discount rate they use to evaluate public sector proposals. The new social discount rate for non-commercial proposals is 2% p.a. (real), while the rate for commercial proposals is 8%. The reduction in the social discount rate for non-commercial proposals from 5% to 2% has important implications for proposals that enhance long-term social and environmental outcomes (and for other proposals with long-lived payoffs). The Treasury has updated their cost-benefit analysis manual to include this (and other) changes. This seminar will discuss these discount rate changes.
 
One advisory input into the Treasury’s decision process was a commissioned expert paper by Motu Research’s Arthur Grimes, How Should the New Zealand Government Discount Future Payoffs? 

Arthur Grimes (Motu Research) and Chris Parker (the Treasury) will discuss the underlying analysis that supported the discount rate changes.

Kirsten Jensen (the Treasury) and Geoff Simmons (Parliamentary Commissioner for the Environment) will discuss the public policy relevance.

This seminar is organised by Te Tai Ōhanga - The Treasury and Motu Research.
  
To register

This is a hybrid event. Please register here if you plan to attend it in person. Light refreshments will be provided.
 
If you would like to attend virtually by Teams, register here.
 
About the presenters

Arthur Grimes is a Senior Fellow at Motu Research and Professor of Wellbeing and Public Policy at Victoria University of Wellington’s School of Government. Arthur’s current research focuses on the economics of wellbeing and public policy, and on urban economics (including housing). He has published widely in both these fields and has published also on monetary and related topics.

Chris Parker is a Principal Advisor in the Treasury's Housing and Urban Growth team. He is an economist with expertise in cost-benefit analysis and urban policy (e.g., land, housing, infrastructure, local government). Previously, he was chief economist at Auckland Council, consultant at each of NZIER and Hyder Consulting, and at FRST (Foundation for Research, Science and Technology). 

Kirsten Jensen is a Principal Advisor in the Treasury's Public Finance Policy team. She led the Treasury policy work on the public sector discount rate, is leading public sector cost-benefit analysis and agencies’ use of the cost-benefit analysis tool for advice. She has served as a board director of the International Society for Benefit Cost Analysis.

Geoff Simmons is the Chief Economist at the Parliamentary Commissioner for the Environment. He has worked as an economist for the Productivity Commission, the UK Home Office and Treasury New Zealand and served as a general manager at the Toi Mai Workforce Development Council and the Morgan Foundation. Geoff has also co-authored four books, two of which include a focus on environmental economics.

Motu Public Policy Seminars are free to the public, but please subscribe to receive email notifications of Motu's events and publications.

Thanks to The Treasury, Stats NZ and EECA for their generous support.