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Vote State-Owned Enterprises

Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers

Scope of Appropriation

This appropriation is limited to the provision of ownership, performance monitoring and governance advice to the Minister for State-Owned Enterprises and other responsible Ministers in respect of the Ministers' shareholding responsibilities or as responsible Ministers for the New Zealand Lotteries Commission and Public Trust.

Significant Work Completed During 2010/11

Performance monitoring of SOEs

  • Embarked on changes to COMU's monitoring approach, especially for the commercial portfolio, in order to increase the level of shareholder engagement with boards about things such as their strategies, financial forecasts including their capital expenditure plans, and dividend policies.
  • Continued to increase the level of transparency and accountability by re-launching the COMU website and by reviewing the Continuous Disclosure Regime. In 2011/12 the Continuous Disclosure Regime is being extended to cover all SOEs and Television New Zealand Ltd (TVNZ).
  • Commissioned commercial valuations of six major SOEs (Genesis, Meridian, Mighty River Power, New Zealand Post, Solid Energy and Transpower) and provided comprehensive advice on a range of issues. These included coordinating a process to facilitate the transfer of the Tekapo A & B power stations from Meridian to Genesis under the Electricity Industry Act 2010, ongoing advice about KiwiRail and advice about establishing an Uncalled Capital Facility in respect of New Zealand Post/Kiwibank.
  • Published the inaugural Annual Portfolio Report describing the financial performance of government-owned enterprises that have full or partial commercial objectives.
  • Created the Financial Analysis Unit as a centre of financial expertise within COMU.

Improving public sector monitoring

  • Embarked on changes to COMU's monitoring approach, especially for the commercial portfolio, and looking at the development of better guidance and tools to support monitoring across the public sector and especially for the commercial portfolio.
  • Commenced activity to advance COMU's role as a Centre of Expertise in ownership monitoring and governance. This has included the codification of all COMU's monitoring and board appointment activities, which are now in the process of being listed on our website. Trial programmes to assist other monitoring agencies have been put in place. In the 2011/12 year we will build on this establishment work to implement a structured approach within COMU to ensure our outputs and activities reflect best practice, and that our assistance to other agencies is delivered in a meaningful and structured manner.

Mixed Ownership Model

  • The Treasury provided advice, and undertook background work, on ownership of commercial entities. This culminated in the announcement in the 2011 Budget of the Government's intention to proceed, following the General Election, with extending mixed ownership to Genesis, Meridian, Mighty River Power and Solid Energy, as well as reducing the Crown's majority stake in Air New Zealand.
  • Following the Budget announcement, the Treasury has started preliminary preparations so that, should the new government decide to proceed following the General Election, a programme will be able to be commenced promptly. This would be a significant new activity for the Treasury, spanning several years.
Statement of Service Performance for Output Class - Vote State-Owned Enterprises
Performance Dimensions for 2010/11 Target Performance for 2010/11
Quality standards for policy advice (refer to conditions of use). Achieved.

Achieved. 

Refer to summary of the Review of the Quality of the Treasury's Policy Advice 2011 on page 62 for further information on application of the policy standard during the 2010/11 year. 

Ministerial satisfaction. Achieved. Whilst this performance dimension has not been formally measured in 2010/11, COMU has actively engaged with the nine shareholding Ministers it deals with in respect of the work covered by this vote. 
Cost - Vote State-Owned Enterprises
2010
Actual
$000
Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers 2011
Actual
$000
2011
Main Estimates
$000
2011
Supp. Estimates
$000
2,654 Expenses 3,670 2,739 4,187
 

Funded by:

     
2,618 Revenue Crown 3,590 2,705 4,129
36 Other revenue 80 34 58

Expenditure was $517,000 (12%) under Supplementary estimates owing to company scoping work that could not be completed in 2010/11. This under-expenditure will be transferred into 2011/12.

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