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Public Debt [8] [9]

Debt Management Objectives

During 1988, as part of the reform of the Government's financial management, the New Zealand Debt Management Office (NZDMO) was formed to improve the management of risk associated with the Government's fixed income portfolio, which comprises liabilities in both the New Zealand and overseas markets and some liquidity assets. The categories of risk managed are interest rate, currency, liquidity, credit and operational risk.

In 1988, NZDMO introduced reforms of the public sector's cash management involving centralisation of surplus cash funds for investment and cash management purposes, and decentralisation to departments of the responsibility for payments and other banking operations.

The separation of the Government's financial management from monetary policy enables NZDMO to focus on defining a low-risk net liability portfolio for the Government and implementing it in a cost-effective manner.

Prior to March 1985, successive governments had borrowed under a fixed exchange-rate regime to finance the balance of payments deficit. Since the adoption of a freely floating exchange-rate regime, the Government has borrowed externally only to rebuild the nation's external reserves and to meet refinancing needs.

Direct public debt increased by a net amount of $1,725 million including swaps between 1 July 2014 and 30 June 2015. This increase was owing to a net increase in internal debt of $7 million and an increase of $1,718 million in external debt.

As of 30 June 2015, 0.8% of the interest-bearing direct debt of the Government was repayable in foreign currencies. The quantifiable contingent liabilities of the Government, including the RBNZ, SOEs and Crown entities, amounted to approximately $8,273 million.

Under existing legislation, amounts payable in respect of principal and interest upon New Zealand securities are a charge upon the public revenues of New Zealand, payable under permanent appropriation. All of the indebtedness of New Zealand is otherwise unsecured.

Debt Record

New Zealand has always paid when due the full amount of principal, interest and amortisation requirements upon its external and internal debt, including guaranteed debt.

Summary of Direct Public Debt

Funded and Floating Debt

The following table sets forth the direct funded and floating debt of the Government on the dates indicated. For the purposes of all debt tables herein, "funded debt" means indebtedness with an original maturity of one year or more and "floating debt" means indebtedness with an original maturity of less than one year. Funded debt, and therefore total direct debt, includes swap transactions.

Total direct debt includes a net swap payable ($144.3 million at 30 June 2015) with offsetting impacts on internal and external funded debt. Swap transactions, which are included in almost all the following public debt tables, increase external funded debt and decrease internal funded debt in 2015.

As at 30 June
(dollar amounts in millions)
2011 2012 2013 2014 2015

Funded Debt[1]

Internal[2] 60,519.9 64,006.2 67,587.3 73,121.6 69,828.8
External[3],[4] 33.4 (308.5) (1,222.5) (342.7) 934.7

Floating Debt

Internal Debt[5] 7,326.0 10,081.0 4,735.0 3,800.0 7,100.0
External Debt[3],[6] 180.6 - - - 440.1

Total Direct Debt

68,059.9 73,778.7 71,099.8 76,578.9 78,303.6

Total Public Debt as a % of GDP [7]

34.1 35.5 33.2 33.2 32.7
  • [1]Includes the effect of swap transactions. Excludes indebtedness to international financial organisations arising from membership.
  • [2]Includes Government Wholesale Bonds, Kiwi Bonds, Index Linked Bonds.
  • [3]External debt is converted at the mid-point of the 2:00 pm spot rate on 30 June for each year.
  • [4]Includes Public Bonds, Private Placements, Syndicated Loans and Medium Term Notes.
  • [5]Treasury Bills.
  • [6]Includes Sovereign Notes and Euro-Commercial Paper.
  • [7]GDP: Treasury Estimate for June years.
  • [8]The debt figures in this section are presented in nominal dollars and relate solely to the direct public debt. In this respect, they may differ from the gross sovereign-issued debt figures as disclosed in the Crown Financial Statements of New Zealand. The latter are presented in accordance with GAAP and include the net debt of the RBNZ.
  • [9]All data sources: NZDMO
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