Crown Deposit Guarantee Scheme
Scope of Appropriation
This appropriation is limited to the implementation and operation of the Crown Deposit Guarantee Scheme excluding expenses incurred in connection with administering claims under a guarantee or indemnity given under the Scheme.
Output Class Description
This class of outputs involves the provision of policy advice to Ministers and the management of operations to establish and monitor guarantees. Policy advice includes recommendations on responses in the event of financial system instability or the failure of a systemic institution and advice on options for the transition and exit from the current retail deposit guarantee. Operational processes are focused on the establishment of risk monitoring processes to actively manage the Crown's interests in guaranteed entities and planning for default events. The central objective is to maintain depositor confidence in New Zealand's financial system.
This work will require ongoing monitoring of financial stability and liquidity and reporting to Ministers to ensure that they are well-appraised of developments in credit conditions and financial stability and their significance.
Significant Work Completed During 2008/09
- Set up the Crown Deposit Guarantee Scheme.
- Established deeds of guarantee for retail deposit institutions.
- Established a risk monitoring process for retail institutions.
- Established a fee management process.
| Performance Dimensions | Performance |
|---|---|
| All policy outputs comply with the Treasury's Quality Standards for Policy Advice as assessed by the Minister three times a year. Target: Rated as meeting or frequently exceeding expectations. |
Not assessed during 2008/09. Three performance reports were provided to the Minister outlining progress against the 2008/09 objectives. Invitations were extended to the Minister on each of these occasions to assess his satisfaction with the Treasury's performance. While no formal feedback was received through this mechanism, the Minister has instigated monthly meetings and reporting systems to enable more regular and timely feedback on the Treasury's work. The Quality Standards for Policy Advice were implemented across the Treasury's work portfolio, and given this was the first year in which these have been used, an external review was conducted to provide a performance benchmark for future reference and to identify areas for focus for future service performance. |
| No unnecessary delays in processing applications. Target: Achieved. | Achieved. |
| Development and implementation of an overall plan for managing the Crown's interests including default events. Target: Achieved. |
Achieved. A range of initiatives to manage the Crown's interests were implemented and further enhancement is planned for 2009/10. |
| Active monitoring of guaranteed institutions is undertaken to minimise Crown exposure. Target: Achieved. |
Achieved. A monitoring process was put in place with further development of monitoring and reporting planned for 2009/10. |
| The Treasury actively manages the Crown's interests in the event of a specific default. Target: Within 7 days of default. |
Achieved. Processes for managing specific defaults were put in place and are being further refined in 2009/10. |
| Cost | ||||
|---|---|---|---|---|
| 2008/09 Actual $000 |
Supp. Estimates - Voted $000 |
Main Estimates $000 |
2007/08 Actual $000 |
|
| Expenses | 1,425 | 1,661 | - | - |
| Funded by: | ||||
| Revenue Crown | 1,410 | 1,642 | - | - |
| Other Revenue | 15 | 19 | - | - |
This output class belongs to a multi-output class appropriation.
Actual 2008/09 output class expenditure was $236,000 or 14.2% under Supplementary Estimates budgets owing to part-year vacancies during the establishment of the scheme and some cost savings identified.
The appropriation for this output class was increased by $1,661,000 in the Supplementary Estimates owing to establishment of the scheme in October 2008.
