The Treasury

Global Navigation

Personal tools

New Zealand Export Credit Office

Scope of Appropriation

Implementation of the Government's Export Credit Guarantees policy and operations of NZECO.

Significant Work Completed During 2010/11

  • NZECO has exceeded its 2010/11 external engagement target, with a total of 435 one-on-one meetings, seminars and presentations.
  • A total of 59 new policies were issued in 2010/11 - with total exposure of $161.870 million supporting exports of $261.250 million.
  • NZECO approved an additional $62 million of exposures which are under offer. These transactions are expected to be completed in 2011/12.
Statement of Service Performance for Output Class - New Zealand Export Credit Office
Performance Dimensions for 2010/11 Target[5] Performance in 2010/11
Compliance with international guidance lines (OECD and World Trade Organization [WTO]) and Delegated Mandate.  100%. 100%.
Value of new export credit guarantees.  $114.400 million. Achieved: $129.920 million.
Value of new US contract bonds.  $52.600 million.

Not achieved: $13.730 million.

The result is dependent on the exporters being successful with their bids.  NZECO approved 12 contracts totalling over $145 million; however, only three of these have been successful to date.

Value of new non-US contract bonds. $20 million.

Not achieved: $4.260 million.

Target was not met primarily owing to the contract not proceeding, being delayed or bonds not being required.  Out of the 11 applications that NZECO approved, four deals totalling $17.900 million have not been taken up to date. 

Value of new working capital guarantees.  $4.500 million.

Not achieved: $0. 

No guarantee was issued owing to these reasons:

  • There are still only three banks that have accepted the NZECO working capital guarantee.
  • This is a bank-led guarantee requiring exporters to have secured export contract(s) and banks to have the appetite to lend.
  • NZECO having the appetite to take on risks associated with funding - being the exporter, their transaction and buyer repayment risk. 
Value of short-term trade credit guarantees.  $77.100 million.

Not achieved: $13.950 million.

During the year, NZECO issued 32 policies - the exposure of $13.950 million has supported exports of $44.900 million. 

The target for this output was affected by continued constrained global demand and an improved appetite by the private sector, compared to the levels anticipated on the basis of 2009/10. 

Cost - New Zealand Export Credit Office
2010
Actual
$000
New Zealand Export Credit Office 2011
Actual
$000
2011
Main Estimates
$000
2011
Supp. Estimates
$000
2,103 Expenses 2,064 3,631 3,255
 

Funded by:

     
2,063 Revenue Crown 2,021 3,580 3,172
40 Other revenue 43 51 83

NZECO was $1.191 million (37%) under Supplementary estimates. Several bids by NZECO clients for large overseas contracts were unsuccessful in the later part of the year and, as a result, NZECO year-end expenditure was under budget, particularly in costs for US surety bonds and legal costs.

Notes

  • [5]It is difficult for NZECO to accurately estimate performance targets for outputs as the results achieved depend on contractors' success in tenders during the year.
Page top