Note 24: Borrowings
| Forecast | Actual | |||
|---|---|---|---|---|
|
Original Budget $m |
Estimated Actuals $m |
30 June 2010 $m |
30 June 2009 $m |
|
| By type | ||||
| 25,629 | 28,881 | Government stock1 | 27,926 | 21,164 |
| 9,550 | 9,043 | Treasury bills | 7,625 | 7,432 |
| 581 | 337 | Government retail stock | 309 | 491 |
| 9,432 | 7,602 | Settlement deposits with Reserve Bank | 6,679 | 6,908 |
| 3,237 | 1,798 | Derivatives in loss2 | 2,376 | 2,158 |
| 1,247 | 1,000 | Finance lease liabilities | 920 | 1,002 |
| 26,747 | 24,982 | Other borrowings | 23,898 | 22,798 |
| 76,423 | 73,643 | Total borrowings3 | 69,733 | 61,953 |
| By source | ||||
| 63,915 | 59,933 | Core Crown | 57,583 | 49,889 |
| 5,168 | 4,923 | Crown entities | 4,835 | 4,939 |
| 17,962 | 20,527 | State-owned enterprises | 19,747 | 16,963 |
| (10,622) | (11,740) | Inter-segment eliminations | (12,432) | (9,838) |
| 76,423 | 73,643 | Total borrowings | 69,733 | 61,953 |
| By maturity | ||||
| Expected to be settled within one year | 30,246 | 32,687 | ||
| Expected to be outstanding for more than one year | 39,487 | 29,266 | ||
| Total borrowings | 69,733 | 61,953 | ||
| By guarantee | ||||
| 58,076 | 52,833 | Sovereign-guaranteed debt4 | 50,017 | 44,448 |
| 18,347 | 20,810 | Non-sovereign debt | 19,716 | 17,505 |
| 76,423 | 73,643 | Total borrowings | 69,733 | 61,953 |
This note constitutes a Statement of Borrowings as required by the Public Finance Act 1989.
All principal, interest and other money payable in relation to money borrowed by the core Crown is a charge on, and payable out of, the revenues of the core Crown equally and rateably with all other general borrowing obligations of the core Crown.
The Government is not liable to contribute towards the payments of debts of Government entities, their subsidiaries or any entity in which the Government has an interest or that is controlled or wholly owned by the Government. Exceptions to this rule only occur for items the Government is liable for under any Act, any guarantee given by the Government, by virtue of an action a creditor has against the Government, or liability the Government has to a creditor of the Reserve Bank.
1. Government stock includes $395 million of infrastructure bonds (2009: $395 million).
2. Derivatives are included in either borrowings or marketable securities depending on their gain or loss position at balance date. This treatment leads to fluctuations in individual items primarily due to exchange rate movements.
3. Total borrowings are the total borrowings (both sovereign-guaranteed and non-sovereign guaranteed) of the total Crown. This equates to the amount in the total Crown statement of financial position and represents the complete picture of whole-of-Crown debt obligations to external parties.
4. Total borrowings can be split into sovereign-guaranteed and non-sovereign-guaranteed debt. This split reflects the fact that borrowings by State-owned enterprises and Crown entities are not explicitly guaranteed by the Crown. Sovereign-guaranteed debt excludes Kiwibank deposits guaranteed under the retail deposit guarantee scheme.
Government Stock
| Actual | ||
|---|---|---|
|
30 June 2010 $m |
30 June 2009 $m |
|
| Government stock measured at amortised cost | 26,814 | 17,710 |
| Government stock measured at fair value | 1,112 | 3,454 |
| Total Government stock | 27,926 | 21,164 |
Government stock is measured at amortised cost, unless it is managed and its performance is evaluated on a fair value basis. Where it is evaluated on a fair value basis it is reported at fair value with movements in fair value reported in the statement of financial performance.
The fair value of government stock measured at amortised cost is $27,836 million (2009: $18,093 million). This valuation is based on observable market prices.
The valuation of government stock reported at fair value is also based on observable market prices. There have been no changes in the Standard & Poor’s or Moody’s international credit ratings for New Zealand. Accordingly changes in fair value are due to factors other than Sovereign credit risk.
| Actual | ||
|---|---|---|
|
30 June 2010 $m |
30 June 2009 $m |
|
Government stock measured at fair value |
||
| Carrying value | 1,112 | 3,454 |
| Amount payable on maturity | 904 | 3,296 |
| Fair value impact from changes in credit risk for the year | - | - |
| Cumulative fair value impact from changes in credit risk | - | - |
Treasury Bills
Treasury bills are reported at either amortised cost or fair value, with fair value based on observable market price. As these are short-term sovereign-issued instruments, the carrying value is not materially affected by changes in Sovereign credit risk and the carrying value approximates the amount payable at maturity.
