Vote Finance Output Class performance

Statement of Objectives and Service Performance Section 45A of the Public Finance Act 1989

Budget management

This class of outputs covers the development of Budget strategy, and the management and delivery of the Budget process. These outputs contribute to an efficient, effective and innovative State sector by providing credible public sector management and decision-making systems that encourage value for money.

In addition to managing the annual Budget, outputs include the provision of advice to identify and implement further improvements in the design of the Budget process. The focus is on improving linkages between the allocation of resources and achieving desired results.

Significant work completed during the year

• Designed, communicated and implemented a new Budget process for Budget 2007, including a new Theme Objectives and Baseline Analysis (TOBA) phase.
• Prepared the Budget Policy Statement.
• Prepared Budget-related legislation including the Appropriations Bills, Imprest Supply Bills and Financial Review Bill. Provided advice on the strategy for managing Budget 2007, including spending allocations and other ways to manage pressures.
• Provided detailed advice on managing individual initiatives as part of Budget 2007.
• Prepared the Budget Executive Summary and Estimates (Supplementary and Mains) documentation.
• Began developing processes for Budget 2008 with other central agencies.

Actual 2006/07 output class expenditure was $13,000 or 1% under Supplementary Estimates budgets.

The appropriation for this output class was increased by $96,000 in the Supplementary Estimates.

Debt and related financial asset management

This class of outputs contributes to achieving an optimal Crown balance sheet and concerns the operational management of the Crown’s portfolio of sovereign-issued debt and associated financial assets.

Specific activities include:

• developing and maintaining an appropriate framework for efficiently managing the portfolio and the risks associated with it
• issuing domestic-currency debt to meet the Government’s funding requirements
• disbursing cash to departments and facilitating departmental cash management
• advancing funds to government entities in accordance with Government policy
• providing capital market services and derivative transactions for departments and government entities
• funding the Reserve Bank’s foreign-exchange reserves
• managing foreign-currency assets required to meet net foreign-currency interest and principal payments
• maintaining hedges of foreign-currency debt that cannot be bought back from investors.

Significant work completed during the year

• Achieved a record value-added result of $54.3 million from tactical portfolio management.
• Launched the first issue ($50 million) of infrastructure bonds in February 2007.
• Hedged the foreign-currency exposure associated with the purchase of NH-90 helicopters by the Ministry of Defence.
• Received international recognition as Sovereign Risk Manager of the year in Risk magazine’s 2007 awards.
• Contributed significantly to a favourable performance audit report on the “Effectiveness of the New Zealand Debt Management Office” by the Controller and Auditor-General.

Actual 2006/07 output class expenditure was $324,000 or 4% under Supplementary Estimates budgets. 

The appropriation for this output class was increased by $3,035,000 in the Supplementary Estimates due to a technical change of recording all debt and related financial management costs within the departmental output expense rather than a non-departmental appropriation.