Chief executives are in turn responsible for service delivery. There are incentives to perform and requirements for performance information, as a basis for monitoring and assessment. In 1994 it was supplemented by the Fiscal Responsibility Act which specifies principles of responsible fiscal management and requires the government to be transparent about its fiscal policy objectives. The State Sector Act 1988 sets out the roles and responsibilities of ministers and chief executives. These are further clarified by annual performance agreements.
Chief executives have a five-year contract term with tenure based on performance.
They are appointed and employed by the State Services Commissioner, though Cabinet may veto appointments. The Public Finance Act 1989 governs the financial management regime. The New Zealand system focuses mainly on outputs, rather than inputs or outcomes. The Fiscal Responsibility Act 1994 requires clear formulation and reporting by the government of its fiscal policy objectives. As part of the Budget process, the Minister of Finance must report on the government's fiscal objectives, the extent to which these objectives are consistent with the above principles and the justification for any inconsistency.