In November 2024, Cabinet endorsed the Funding and Financing Framework (“Framework”) and agreed that all proposals seeking Crown funding must demonstrate consideration of the Framework.
- Cabinet Paper ECO-24-SUB-0264: Improving Infrastructure Funding and Financing Report-back
- Cabinet Minute ECO-24-MIN-0264: Improving Infrastructure Funding and Financing Report-back
The Treasury has developed a Framework consisting of a set of Principles and a Decision Process to guide the Crown’s choices around how it structures its funding and/or financing support.
The Framework is a key tool to support the Crown in efficiently and effectively managing its balance sheet capacity – in line with the intent signalled in the Public Finance Act 1989. A well-managed balance sheet contributes to higher living standards by supporting the provision of public services while also underpinning the economy’s overall performance.
Using the Crown’s balance sheet more strategically to achieve policy objectives can be effective and may in some cases provide better value for money than more traditional forms of support. At the same time, such strategies can generate different risks and challenges if it is not subject to appropriate policy frameworks, risk management and governance.
The Crown will continue to use its balance sheet to support policy objectives. The Principles will guide the Crown to preserve this capacity for initiatives where alternative funding and financing options are not available or when there is a policy decision to be the primary and/or only funder.
The underlying policy objectives and public outcomes sought should be determined before applying the Principles. The Principles may inform but should not dictate decision-making on the underlying policy objectives that drive a given proposal.