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Annual Report of the Treasury for the Year Ended 30 June 2012

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 2011/12

  • Engaged with monitored agencies and provided advice on strategy and planning documentation including Statements of Corporate Intent of SOEs.
  • Prepared Quarterly Reports for Cabinet on Crown Company performance, covering SOEs and other entities being monitored. This year, the Treasury took on the secondary monitoring responsibility for Dispute Resolution Services Ltd, Health Benefits Ltd and LGFA.
  • Analysed Post Investment Reviews of SOEs' major capital projects and business acquisitions and reported the results of these back to shareholding Ministers. The reviews showed that the majority of SOE investments have been successful.
  • Published the 2011 APR, including an Economic Profit Analysis over 10 years for all SOEs, Air New Zealand, Public Trust and Television New Zealand (TVNZ). It also included Independent Commercial Valuations for all SOEs (also see below).
  • Undertook work on the long-term strategy for Kiwibank, and in respect of two acquisitions by NZ Post/Kiwibank.
  • Provided advice on institutional arrangements for SOEs. This included:
    • reviewing and revising the Owners' Expectations Manual for SOEs and other Treasury-monitored entitites, which has now been published, and
    • providing advice regarding KiwiRail's turnaround progress and a proposed Balance Sheet Restructuring, planned for implementation in 2013, which should assist in the reporting and monitoring of its commercial progress.
  • Engaged with agencies on their dividend policies as part of the annual round of business planning and Statements of Corporate Intent, because these impact on capital structures, and as a consequence some companies resumed dividend payments or established a timeframe for when they intend to do so.
  • Undertook work on understanding the senior management performance incentive structures at SOEs.
  • Assisted Ministers with 101 appointments and reappointments of board members, and the appointments to establish boards for SRESL and CAML.
Performance Measures: Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers
Performance Dimensions for 2011/12 Target Performance for 2011/12
Policy advice complies with the Treasury's Quality Standards for Policy. Achieved Achieved
2011 APR builds on the analysis developed in 2010 and provides more detailed and comprehensive performance information on the entities that COMU monitors. Achieved Achieved
Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers
2011
Actual
$000
Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers 2012
Actual
$000
2012
Main Estimates
$000
2012
Supp. Estimates
$000
- Expenses 3,712 2,048 4,131

Funded by:

- Revenue Crown 3,660 2,014 4,097
- Other revenue 52 34 34

Expenditure is $419,000 under the Supplementary Estimates budget. Approval has been granted to transfer up to $400,000 of this under-spend to 2012/13 to continue to develop training for board directors and complete work programmes associated with Kiwibank and NZ Post.

From 2011/12 the appropriation previously attributable to Vote State-Owned Enterprises was transferred to Vote Finance.

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