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Investment in non-PPE assets

Table 4.3 summarises major movements in non-PPE assets since 2007, while Table 4.4 highlights the sources of capital for those investments.

Table 4.3 - Movement in non-PPE assets, 2007 to 2010
$million 2007 2008 2009 2010 Total
Opening balance 66,396 73,718 85,063 93,359
CFI investment growth 6,189 2,137 433 5,733 14,492
Student loans additions 1,176 1,201 1,350 1,525 5,252
Student loans other changes (734) (471) (1,538) (1,288) (4,031)
Kiwibank mortgages 1,028 1,944 2,911 1,927 7,810
RBNZ and NZDMO activity 1,555 7,949 6,508 (2,846) 13,166
Other movements (1,892) (1,415) (1,368) (2,439) (7,114)
Total movement 7,322 11,345 8,296 2,612 29,575
Closing balance 73,718 85,063 93,359 95,971

Source: The Treasury

Table 4.4 - Summary of investments into non-PPE assets, 2007 to 2010
$million 2007 2008 2009 2010 Total

Funding sources for investments

Core Crown activity used for contributions to the NZS Fund 2,048 2,104 2,243 250 6,645
Core Crown activity used to fund student loans 621 572 640 771 2,604
Reissuance of student loan repayments 555 629 710 754 2,648
Financial and operating returns from CFIs 2,497 1,737 2,215 2,951 9,400
Valuation gains/(losses) on CFI investments 1,644 (1,704) (4,025) 2,532 (1,553)
RBNZ and NZDMO activity 1,555 7,949 6,508 (2,846) 13,166
Kiwibank deposits 1,028 1,944 2,911 1,927 7,810
Other (2,626) (1,886) (2,906) (3,727) (11,145)
Total movement in non-PPE investments 7,322 11,345 8,296 2,612 29,575

Source: The Treasury

This shows:

  • CFI additions are driven by a combination of Crown contributions (to NZS Fund), ACC levies in excess of current year ACC costs and investment returns. The performance of funds under management in the CFIs has a significant impact on the Crown's total investment plans.
  • Issuing new student loans is a major investment by the Crown. We assume that new loans are first funded by repayments of existing loans, with the balance being Crown contributions from general sources.
  • While gross student loan advances amounted to $5.3 billion, the net cash impact after repayments is only half of this amount. As discussed in Section 2, the balance sheet asset is further reduced by the write-down of loan balances to fair value.
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