Glossary of Guidance Terms

Liabilities

An accrual concept measured in accordance with generally accepted accounting practice (GAAP). Appropriations for liabilities relate only to non-departmental capital contributions, loans and the purchase or development of capital assets owned by the Crown. These are required at the time the Crown has an obligation to make the payment for any of these types of transactions and when the amount of that payment can be measured reliably.

Line-by-line consolidation

This is a term used to refer to the general approach to the presentation of the Crown financial statements. It means that the individual line items for revenues, expenses, assets and liabilities in the Crown financial statements include all departments, Offices of Parliament, the Reserve Bank, SOEs, Crown entities, and other entities controlled by the Government.

Minister

A member of Parliament who is part of the Executive and who is usually responsible for one or more government departments or ministries.

Net core Crown debt

Represents GSID less core Crown financial assets (excluding advances and financial assets held by the NZS Fund). Advances and financial assets held by the NZS Fund are excluded as these assets are less liquid and they are made for public policy reasons rather than for the purposes associated with government financing. Net core Crown debt provides information about the sustainability of the Government's accounts, and is used by some international agencies when determining the creditworthiness of a country

Net worth

Total assets less total liabilities (also referred to as the Crown balance). The change in net worth in any given forecast year is largely driven by the operating balance.

Non-departmental outputs

refer to goods and services purchased by a Minister from a provider that is not a government department. For example the Minister of Social Welfare purchases services for the public from community-based providers and voluntary groups. Crown entities are often providers of these nondepartmental outputs.

Offices of Parliament

The primary function of an Office of Parliament is to be a check on the Executive, as part of Parliament’s constitutional role of ensuring the accountability of the Executive. An Office of Parliament must discharge functions which the House itself might appropriately undertake. At time of publication there were three Offices of Parliament: Office of the Controller and Auditor-General, Parliamentary Commissioner for the Environment and Office of the Ombudsmen.

Operating allowance

The amount included in the Fiscal Strategy Report projections for new initiatives, including spending and cost pressures. The allowance is a projection assumption. The projections in the Fiscal Strategy Report also include an allowance for capital spending.

Operating balance

The operating balance is the residual of revenues less expenses plus surpluses from state-owned enterprises and Crown entities. It includes gains and losses not reported directly as a movement against net worth.

Outcome

Defined in the Public Finance Act 1989 as the "impacts on, or consequences for the community of the outputs or activities of the Government".

Outputs

Outputs are goods and services purchased by the Crown from departments and other entities. Outputs range from policy advice to the administration of contracts and grants through to the provision of specific services.

Parliament

The Sovereign and the House of Representatives.

Public Finance (State Sector Management) Bill (PFSSM)

Bill to amend the PFA.

Public Finance Act 1989 (PFA)

The Public Finance Act provides a framework for Government financial activity and expenditure of public money.

Responsible Minister

The Minister responsible for the financial performance of a department or Crown entity. In relation to an Office of Parliament, the Speaker of the House of Representatives is the Responsible Minister.

Short-term fiscal intentions

Under the Public Finance Act 1989, the Government must indicate explicitly its intentions for operating expenses, operating revenues, the operating balance, debt and net worth over the next three years.

Speaker

The principal presiding officer of the House, elected by the members.

Special purpose financial reports

Financial reports tailored to meet the specific information needs of a particular user.

Specific fiscal risks (SFR)

These are a category of Government decisions or circumstances which may have a material impact on the fiscal position (excluding contingent liabilities). They are not included in the main forecasts because their fiscal impact cannot be reasonably quantified, the likelihood of realisation is uncertain and/or the timing is uncertain.

Statement of corporate intent

The Statement of Corporate Intent is prepared by the board of directors who must supply it in draft form to the shareholding Ministers no later than one month before the start of each financial year. The responsible Minister for the SOE is required to present the SCI to the House. The SCI covers a three-year period and includes the: SOE’s objectives; nature and scope of activities to be undertaken; ratio of shareholders’ funds to total assets; accounting policies; performance targets; dividend policy and proposed distributions; the board’s estimate of the commercial value of the Crown’s investment