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Statement of Intent 2015-2019

The Crown balance sheet is managed effectively and efficiently

What we intend to achieve

  • The Crown balance sheet is managed effectively and efficiently with the overall performance and risk profile of assets and liabilities supporting the Government’s medium-term objectives.

Specific intentions include:

  • the core Crown debt portfolio is well managed
  • the composition of the Crown’s balance sheet is aligned with government priorities
  • appropriate financial, commercial and social returns, risks and long-term value are achieved from the assets that the Crown owns, and
  • risks to the Crown’s balance sheet are managed consistent with government risk appetite and tolerance, and the Crown balance sheet provides a buffer to shocks.

What success will look like

  • Composition of the core Crown debt portfolio and funding programmes is structured to optimise Crown balance sheet risk, return and cost over the long term.
  • Crown liquidity and funding risks and NZDMO market, credit and operational risks are well managed within the Crown’s risk appetite.
  • Execution of funding programmes is conducted in a transparent, even-handed and consistent manner supporting the efficient functioning and sustainable functioning of New Zealand capital markets.
  • Investor and intermediary confidence and participation are maintained.
  • Access to debt markets is maintained sufficiently to provide a general Crown buffer for possible fiscal shocks.
  • The composition of the Crown’s assets and liabilities is aligned with government priorities. Crown capital allocation aligns with medium-term government priorities.
  • Balance sheet considerations are incorporated effectively into the Government’s fiscal strategy.
  • Appropriate financial, commercial and social returns, risks and long-term value are achieved from Crown-owned assets.
  • The Crown’s financial portfolio is performing to agreed benchmarks.
  • New investments deliver expected value for money.
  • Agencies have the appropriate level of asset management capability.
  • Risks to the Crown’s balance sheet are measured and managed, and the balance sheet is resilient to shocks.
  • Entity risks are well understood and appropriately managed.

What we will do to achieve this

  • Execute debt management activities. Specifically, we will:
    • manage Crown liquidity and funding risks and NZDMO market, credit and operational risks
    • execute the core Crown funding programme
    • execute investor and intermediary engagement plans, and
    • provide capital markets and risk management advice within the Crown.
  • Monitor the performance of and provide policy advice on management of the Crown’s balance sheet. Specifically, we will:
    • implement a work programme following the publication of the 2014 Investment Statement, and
    • identify metrics and data collection needs for Crown balance sheet asset performance and risk measurement, eventually establishing a mechanism that collects, aggregates and analyses asset performance across the Crown balance sheet.
  • Understand, analyse and manage Crown financial risks and contingent items, and increase the focus on the value and performance of the investment decision-making and management system.
  • In respect of the commercial portfolio, we will implement a pipeline of policy and strategic reviews in relation to the Crown’s commercial portfolio, undertake board appointments and execute commercial transactions as necessary.
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