Presented to the House of Representatives Pursuant to Section 44 of the Public Finance Act on 19 October 2022.
Previous annual reports are available from Annual Reports.
Formats and related files
Erratum - February 2023#
Since publishing the Annual Report 2021/22, the Treasury has identified errors that are corrected through an erratum. None of these errors are in the audited sections of the Report.
The erratum is not part of the Annual Report 2021/22 – it should be read in conjunction with the Report, to clarify the instances in which the information in the Report is being corrected (by way of the erratum).
The page numbers in the erratum refer to those of the Annual Report PDF file as published at: Annual Report of the Treasury for the Year Ended 30 June 2022 (PDF 16.86 MB)
Read the erratum: Erratum - Annual Report of the Treasury for the Year Ended 30 June 2022 (PDF 154.68 KB)
Ko te tai whakarunga
Ko te tai whakararo
Ko te Tai Tokerau
Ko te Tai Tonga
Ko te Tai Hauāuru
Ko te Tai Rāwhiti
Tēnei, ko Te Tai Ōhanga
Hui e, Tāiki e!
There in the challenge between the
known and the unknown, the Treasury
find direction from the northern,
southern, western and eastern tides.
At the centre, Te Tai Ōhanga,
The Treasury, serving the four directions
of Aotearoa where our people live.
Chief Executive's Introduction#
In an uncertain and fast-changing world, Te Tai Ōhanga's unwavering focus remains on lifting living standards for all New Zealanders.
As the COVID-19 pandemic continued throughout 2021/22, the Treasury worked with agility to help manage its impact on New Zealand. We advised on economic assistance to keep people in jobs, businesses operating, and support vulnerable communities as they navigated changing restrictions to control the virus. We delivered trade credit supports that backed a historic high of exports and a $20 billion debt programme, including an award-winning inaugural 30-year New Zealand government bond and work on an upcoming sovereign green bond.
This year saw a significant shift in the global macroeconomic environment. Strong demand pushing against disrupted supply chains and tight labour markets led to a 30-year high in inflation and record low unemployment. Rigorous advice was provided on the Government's updated fiscal and economic strategy for this changed context. We led work on key reforms important to economic resilience and productivity, including on overseas investment, the Natural Hazards Insurance Bill and Reserve Bank of New Zealand reforms. We collaborated with stakeholders and aligned our planning and resources with critical issues facing New Zealand, including climate change, housing and resource management reforms, health reform and infrastructure.
As a part of Budget 2022, the Treasury helped deliver innovations to better address complex, multi-generational challenges and facilitate longer-term investment. These changes include multi-year funding for health services, the establishment of the enduring, multi-year Climate Emergency Response Fund, as well as the piloting of two clusters of agencies in the justice and natural resources sectors, to facilitate longer-term and integrated planning. We strengthened our focus on value-for-money in our Budget analysis and supported the Government to introduce new fiscal rules that balance tight fiscal discipline with more flexibility for investments that deliver value and lift living standards.
The Treasury's Living Standards Framework (LSF) and He Ara Waiora (HAW), our Māori wellbeing framework, add rigour to our advice by prompting a broader and more systematic analysis of wellbeing. This year we released a refreshed LSF and LSF dashboard of indicators, which better capture the role of culture, institutions and governance, collective wellbeing and child wellbeing.
The LSF and HAW underpin work underway on our first Wellbeing Report, which aims to identify trends in wellbeing as well as the sustainability of, and any risks to, the state of wellbeing. The report will be released later this calendar year and builds on stewardship documents released in 2021/22 - the Treasury's Investment Statement and Long-Term Fiscal Statement/Long-term Insight Briefing. Throughout 2021/22 we further deepened the analytical foundations of our work, including with the launch of a new series of published analytical notes, and research papers presented at economics conferences.
At Treasury we are committed to being a diverse and inclusive organisation that attracts and retains the best talent, draws upon the diverse skills and experiences of our team, and is informed by diverse perspectives as we engage across New Zealand and around the world. This year our gender pay gap continued to narrow and staff mix further diversified. As an agency of the Crown, we are committed to being an effective Treaty partner and to further building our capability in te ao Māori through our Whāinga Amorangi plan. We also launched a new Pacific strategy to support Pacific cultural competency and responsiveness.
For New Zealand, 2021/22 was another year of COVID-19 challenges and rapid change. I am proud that throughout these challenges, our Treasury people maintained their deep commitment, professionalism and determination in their work. I would like to extend my sincere thanks to our talented Treasury team, and our partners and stakeholders who have supported us, for continuing to make a difference for New Zealanders, now and in the future.
Dr Caralee McLiesh
Secretary to Te Tai Ōhanga - The Treasury
30 September 2022
Ko Te Kupu Whakataki a te Tumu Whakarae#
I tēnei ao pōkaikaha hurihuri, ka kiriūka tonu te arotahi o Te Tai Ōhanga ki te hiki i ngā paerewa oranga mō ngā tāngata katoa o Aotearoa.
I te auroa tonu o te urutā KOWHEORI-19 puta noa te tau 2021, 2022 hoki, kua moruki te mahi a Te Tai Ōhanga ki te whakamāmā i ngā pānga ki Aotearoa. I tohutohu ai mātou mō ngā toko ōhanga, kia pupuri tonu ngā tāngata i ō ratou tūnga mahi, kia whakatūturu tonu i ngā mahi pakihi, kia hīkina ake hoki ngā hapori paraheahea, i a rātou e rūnā ana i ngā herenga ārai mō te urutā e hurihuri ana mai. I tuku mātou i ngā toko taurewa hokohoko hei tuarā mō te taumata hou i ekengia mō ngā hokohoko ki tāwāhi, i tētahi kaupapa moni tārewa e $20 piriona te nui, tae ana ki te kaupapa pūtea oati hou a te kāwanatanga 30 tau te roanga (i tohua ki tētahi whakawhiwhinga) me ngā mahi tīmatanga mō tētahi pūtea oati kākāriki hou a te karauna.
I tēnei tau i kitea tētahi nekehanga nui o te ōhanga whānui o te ao. Nā te tononga kaha ka pā ki ngā raupapa whakarato kua raru, ki ngā mākete mahi kua heke te āheitanga hoki, ka hua mai te pikinga utu nui rawa o ngā 30 tau kua pahure, ka heke kia tokoiti rawa te hunga kore mahi hoki. I arotahi ai mātou kia kaha te tohutohu e pā ana ki te rautaki whakahaere moni tūmatanui, ōhanga hoki a te kāwanatanga i roto i tēnei horopaki hou. I ārahi mātou i ngā mahi e pā ana ki ngā whakahou matua e hira ana kia manawaroa te ōhanga me te tōnui, tae ana ki te haumitanga mai i tāwāhi, te whakahou i te Natural Hazards Insurance Bill, Te Pūtea Matua (RBNZ) hoki. I mahi tahi ai mātou ko te hunga whaipānga ki te whakahāngai i ngā mahere me ngā rauemi ki ngā kaupapa hira e pā ana ki Aotearoa, tae ana ki te āhuarangi hurihuri, ngā take whare, ngā whakahounga whakahere rawa, ngā whakahounga hauora, ko te hangahanga whānui hoki.
Kei roto i te Budget 2022, i āwhina Te Tai Ōhanga ki te tuku i ngā kaupapa hou hei whakapiki i ngā urupare ki ngā wero matatini whakatupuranga-maha, hei huawaere i ngā haumitanga wā roa ake hoki. Tae ana ēnei panonitanga ki te pūtea tau-maha mō ngā ratonga hauora, te whakatū i te pūtea tūturu, te Climate Emergency Response Fund, te whakatauira hoki o ētahi huinga hinonga e rua kei te rāngai manatika me te rāngai rauemi taiao, hei huawaere te whakamahere tūturu, hanumi hoki. Kua whakakaha mātou i tō mātou arotahi ki te painga ka riro mō ia tāra kei tō mātou tātari i te Mahere Pūtea, ā, kua tautokona te kāwanatanga ki te whakauru i ngā tikanga ahumoni hei whakataurite i te whakaraupapa ahumoni me te pīngohengohe mō ngā haumitanga e tuku uara, e hiki ana i ngā paerewa oranga hoki.
Mā te Living Standards Framework (LSF) me He Ara Waiora (HAW), he anga toiora Māori a Te Tai Ōhanga, e whakaū kia pākaha ā mātou tohutohu, mā te hiki i te tātaritanga whānui ake, nahanaha hoki. I tēnei tau i whakarewa ai mātou i te LSF hou me te paemana o ngā tohu tutukitanga hou mō te LSF, kia pakari ai te hopu i ngā mahi o te ahurea, ngā hinonga, te mana whakahaere, me te toiora o ngā tamariki me te iwi whānui.
He tumu te LSF me HAW mō ngā mahi i tīmata i tā mātou pūrongo Wellbeing Report tuatahi, me tōna aronga ki te tautohu i ngā ia o te toiora, ki te pūmau o te toiora me ngā tūraru tērā pea ka pā mai hoki. Ka tukuna te pūrongo i tēnei tau ā-maramataka, ā, kua tāpiri tēnei ki ngā pūrongo mō te kaitiakitanga (stewardship) i tukuna e Te Tai Ōhanga i te 2021/22 – arā, He Puna Hao Pātiki: 2022 Investment Statement me He Tirohanga Mokopuna 2021 (Long-Term Fiscal Statement/Long‑term Insight Briefing). Puta noa i 2021/22 kua whakahohonu mātou i ngā tumu tātari o ā mātou mahi, tae ana ki te whakarewa o tētahi huinga tuhipoka tātari hei tānga, ko ngā pepa rangahau kua whakaaturia i ngā hui taumata ōhanga hoki.
Kei Te Tai Ōhanga, e ū ana mātou kia kanorau, kia kauawhi hoki tō mātou rōpū, ka whakamanea, ka pupuri hoki i te hunga whai pūkenga pai rawa, ka whakamahi i ngā pūkenga me ngā wheako whānui o tō mātou tīma, ā, ka whai māramatanga i ngā tirohanga kanorau, i ā mātou mahi, puta noa i Aotearoa me te ao whānui hoki. I tēnei tau, i te whakawhāiti tonu te āputa whiwhi moni i waenga i ngā ira, ā, kua piki tonu te kanorau o te hunga kaimahi hoki. Hei tari Karauna, e ū ana mātou kia tū hei hoa Tiriti whaihua, ki te whakakaha hoki i tō mātou āheinga i te ao Māori mā te kaupapa o te Whāinga Amorangi. Kua whakarewa hoki mātou i tētahi rautaki mō te Moana-nui-a-Kiwa hei tautoko i te āheinga me te tāwariwari ki te ahurea Pasifika.
Ki Aotearoa, he tau anō 2021/22 o ngā wero KOWHEORI-19 me ngā hurihanga tere. E poho kererū ana ahau, ahakoa aua wero, kua ū ō mātou kaimahi o te Tai Ōhanga ki ō rātou kaha, ngaio, aumangea hoki i ā rātou mahi. E mihi ana ahau i te ngākau whakaute ki tō mātou tīma whai pūkenga o Te Tai Ōhanga, ō mātou hoa haere, me te hunga whai pānga kua tautoko i a mātou, mō te kaha ki te mahi whaihua tonu mō Aotearoa, i tēnei wā, āpōpō hoki.
Dr Caralee McLiesh
Te Tumu Whakarae mō Te Tai Ōhanga
30 September 2022
Statement of Responsibility#
I am responsible, as the Secretary to Te Tai Ōhanga - The Treasury, for:
- the preparation of Te Tai Ōhanga - The Treasury's Financial Statements and Statements of Expenses and Capital Expenditure and for the judgements expressed in them
- having in place a system of internal control designed to provide reasonable assurance as to the integrity and reliability of financial reporting
- ensuring that end-of-year performance information on each appropriation administered by Te Tai Ōhanga - The Treasury is provided in accordance with sections 19A to 19C of the Public Finance Act 1989, whether that information is included in this Annual Report and
- the accuracy of any end-of-year performance information prepared by Te Tai Ōhanga - The Treasury, whether that information is included in this Annual Report.
In my opinion:
- the annual report fairly reflects the operations, progress, and organisational health and capability of Te Tai Ōhanga - The Treasury
- the Financial Statements fairly reflect the financial position of Te Tai Ōhanga - The Treasury as at 30 June 2022 and its operations for the year ended on that date and
- the Forecast Financial Statements fairly reflect the forecast financial position of Te Tai Ōhanga - The Treasury as at 30 June 2023 and its operations for the year ending on that date.
Dr Caralee McLiesh
Secretary to Te Tai Ōhanga - The Treasury
30 September 2022
Our Economic Environment#
Over the last two years, New Zealand, along with the rest of the world, has faced significant economic and social disruption from the effects of COVID-19. Throughout 2021/22, our economy continued to be buffeted by the impacts of a complex mix of demand and supply shocks from both foreign and domestic sources. These ranged from Russia’s invasion of Ukraine, lockdowns and mobility restrictions here and offshore to significant labour supply shocks with net migration falling close to zero for the past two years.
This combination of strong demand interacting with constrained supply means the economy has been operating well above capacity, giving rise to today's principal macroeconomic policy issue both here and abroad: inflation.
Despite these challenges, our economy proved comparatively resilient throughout the year. GDP returned to around 3.5% above pre-pandemic levels, well above the OECD average, and unemployment fell to record lows, at 3.2%. However, we are expecting a period where economic activity in New Zealand is slowing with weaker growth expected to persist, reflecting the impacts of monetary policy responding to inflation and a wider global economic slowdown.
New Zealand's economic resilience will continue to be challenged by a volatile international environment. Global risks have intensified as policy makers respond to inflation, and geopolitical risk is increasing. The rules-based and highly interdependent international economic and financial system face challenges as governments place greater focus on their own economic security and geopolitical considerations.
Domestically, New Zealand's well-known and long-term economic performance challenge is the slippage in comparative income driven by weak productivity performance.
Improving this performance matters for our living standards. Higher productivity means higher incomes, cheaper and better-quality goods and services, expanded choices across leisure and work and, at a societal level, across policies and spending towards social and environmental goals. Real wages tend to grow more rapidly when labour productivity growth is strong, helping to address cost of living challenges in a sustainable way. In short, higher productivity lifts wellbeing.
While COVID-19 continued to cause real hardship over the year, compared to many other countries New Zealand has emerged comparatively well from the pandemic to date. Our COVID-19 mortality rate has been relatively low, and aggregate life satisfaction has remained high. Most other measures of wellbeing appear to have held up overall to date. The effects of the pandemic have, however, been highly uneven. Some people, places, businesses and sectors have been hit particularly hard. More widely, some of the long-term effects are perhaps yet to be seen, including impacts from disruptions to our health and education systems.
Looking ahead there is considerable uncertainty about the outlook for key economic variables such as interest rates, inflation, employment and output. We face risks to our wellbeing, such as the growing effects of climate change. At the same time, there are opportunities to build on our strengths such as high levels of trust, and improve our resilience to shocks by strengthening our collective institutions. Through this period of uncertainty and volatility, the Treasury's focus remains firmly on improving living standards through the provision of high quality economic, financial, commercial and policy advice and services.
Our Year at a Glance#
July#
- Supported Public Finance System Modernisation by working with other agencies to establish clusters in the Natural Resources and Justice sectors to lead spending reviews and support the development of multi-year funding packages to deliver on Government priorities
- Supported housing affordability and climate change adaptation during the year through the Resource Management reforms
- Supported the Government to announce a $2.5 billion financial package to support local government transition through the Three Waters Reform
- Hosted the APEC Fiscal Policy Dialogue, including discussion on the current and future role of fiscal policy, how to manage fiscal risks and how fiscal policy can spur inclusive, sustainable growth
- Celebrated the 30-year anniversary of our wharenui
August#
- The Reserve Bank of New Zealand Act 2021 passed into law
- Supported the Government's response to the Delta outbreak through policy advice on economic supports, health monitoring and modelling, new economic monitoring products and COVID-19 Response and Recovery Fund advice
- Provided second opinion advice on a range of housing initiatives and supports, including amendments to, and the utilisation of, the Kiwibuild Programme, Progressive Home Ownership scheme and loans and progressing Phase One of the Aotearoa Homelessness Action Plan
- Led the APEC Budget Design session, which generated substantial interest from other economies
September#
- Supported the Government's response to the Delta outbreak through Resurgence Support Payments and the welfare system
- Published He Tirohanga Mokopuna 2021: The Treasury’s combined Statement on the Long-term Fiscal Position and Long-term Insights Briefing
- Launched a Responsible Investment Framework for the Crown’s Financial Institutions
October#
- Released the 2021 Living Standards Framework to better reflect child wellbeing and culture, including Māori and Pacific perspectives
- Published the Financial Statements of the Government for the year ending 30 June 2021 with an unmodified audit opinion
- Established an accountability structure to support the Treasury’s new monitoring function of RBNZ
- New Zealand hosted the APEC Finance Ministers’ Process (FMP) in 2021 starting with the Finance Ministers’ Meeting (FMM)
- Implemented Treasury's new annual planning, prioritisation and reporting processes
November#
- Launched a programme to develop the first Sovereign Green Bond issuance for New Zealand
- Held the Ivan Kwok Memorial Award, where the Treasury celebrated those who’ve shown excellence, leadership, growth and innovation in the Crown-Māori space over the past year
- The Treasury Rainbow Network (TRN) launched a new Rainbow Strategy
December#
- Published the NZ Export Credit Annual Review for the 2020/21 financial year
- Published the Half Year Economic and Fiscal Update 2021 and the 2022 Budget Policy Statement
January#
- Provided policy advice on the Government’s business and individual supports through the Omicron outbreaks
- Continued driving regulatory system stewardship and leading the regulatory impact analysis system
- Supported cross-agency workstreams in the lead up to the Government's decision to select the tunneled light rail option in the Auckland Light Rail Project
February#
- Set up the Financial Framework for Ministry of Disabled People
- Released a comprehensive list of COVID-19 Response and Recovery Fund decisions; this data release is in open data format, which contributes towards the accessibility of the Treasury’s data
March#
- Published He Puna Hao Pātiki: 2022 Investment Statement describing the value of the government’s significant assets and liabilities and the expected change in the future
- Introduced the Natural Hazards Insurance Bill 2022, the policy development of which was led by the Treasury (this will update and replace the Earthquake Commission Act 1993)
- Worked closely with other agencies to contribute towards the health system reform, ahead of the establishment of new entities on 1 July 2022
- Produced three reports on the Treasury’s greenhouse gas emissions for the years 2018/19 (baseline year), 2019/20 and 2020/21
April#
- Released the refreshed Living Standards Framework Dashboard to align with the new Living Standards Framework
- Released Trends in Wellbeing in Aotearoa New Zealand, 2000-2020, which reviews trends in wellbeing across the wellbeing domains of the LSF and is the first in a series of background papers leading up to the Wellbeing Report to be released later this year
- Undertook a number of independent reviews of our IT infrastructure, systems and applications – demonstrating that we have in place the expected controls necessary to protect our IT environment
May#
- Delivered the Budget 2022 and Fiscal Strategy Report, including a strengthened approach to assessing Budget initiatives
- Published the Budget Economic and Fiscal Update 2022 and the Child Poverty Report 2022
- Supported the establishment of the Climate Emergency Response Fund (CERF), the first allocation of funding through Budget 2022 and inaugural Emissions Reduction Plan and National Adaptation Plan
- Introduced into Parliament the Overseas Investment (Forestry) Amendment Bill
- Recommended two new fiscal rules adopted by the Government: An operating rule as the main fiscal rule – to bring the operating balance before gains and losses (OBEGAL) back to surplus and then to maintain small surpluses on average over time
- New Zealand Debt Management was awarded a Kanganews Award for New Zealand Dollar Rates Bond Deal of the Year – 2021 for the issue of its NZGB 2051 maturity bond
June#
- Enabled $610 million of export sales into 51 countries through 59 exporters through the year
- Issued $20 billion of New Zealand Government Bonds, including a 30-year bond, to fund the Crown’s residual cash requirements
- Provided ownership and investment advice to shareholding and responsible Ministers throughout the year on 35 Crown-owned companies and entities
- Appointed a total of 44 directors for Crown boards across commercial and financial entities throughout the year as part of the Treasury’s role in providing advice to shareholding Ministers
- Delivered 34 Finance Development Programme events to more than 3,000 government finance professionals throughout the year
- Completed analysis of the housing and urban development system in Hamilton-Waikato by the Housing Technical Working Group
- Responded to 100% of the Official Information Act requests within the statutory timeframe through the year
- Maintained our timeliness (of response) rate of 100% for written Parliamentary question responses provided to Ministers, with a 85% increase in volume compared to 2020/21
SECTION ONE - Wāhanga Tuatahi | Ko mātou nei, ko ā mātou mahi hoki | Who We Are and What We Do#
Our Strategic Direction#
Our Purpose
As Te Tai Ōhanga, we are committed to tiakitanga to make New Zealand a better place for people today and in the future. We safeguard New Zealand's finances and are the Government's trusted economic advisor. We lead, partner and collaborate, and we help steward the public sector, in order to navigate the big challenges and opportunities for New Zealand.
Our Strategic Priorities
- Developing and embedding the LSF and He Ara Waiora in policy advice (eg, child wellbeing)
- Delivering the reforms for a sustainable public finance system
- Securing economic recovery from COVID-19
- Navigating big issues/Government priorities:
- Climate change
- Health
- Housing
- Strengthening the Treasury through clear direction, supporting people and operational excellence
Our Strategic Outcomes
- A strong, growing and resilient economy for all
- Sustainable public finances that deliver intergenerational wellbeing
- System leadership that supports a high-performing public service
- Compelling advice on New Zealand's biggest issues
Who We Are – Te Tai Ōhanga
We are at the heart of New Zealand's economic and financial tides. Our name, Te Tai Ōhanga, flows from the four tides, reflecting that we both lead and serve from the centre to lift living standards for all New Zealanders. We are a talented, inclusive and hard-working whānau, who make the Treasury a great place to work. Our rigorous and diverse analysis enables growth and resilience in financial/physical, human, social and natural capitals for present and future generations.
Our Strategy at a Glance#
Our Strategic Intentions 2021-2025, which took effect from July 2021, strengthen our commitment to lifting living standards for all New Zealanders.
They set our vision, purpose and strategic direction. Our strategic outcomes reflect the domains in which we aspire to have meaningful impact through our work, while our strategic priorities reflect how we align our key programmes of work to enable us to achieve our vision.
Our Strategic Intentions were set within the context of a dynamic environment, taking into consideration the global COVID-19 pandemic, climate change, child wellbeing, housing, health and other significant multi-generational challenges. Strong domestic demand pushing up against constrained supply has driven up inflation, and the situation has been compounded by the Russian invasion of Ukraine. However, we remain committed to working with the Government to advance its priorities.
In 2021/22, we continued to pursue our vision and outcomes through aligning our work programme with our priorities.
Delivering and embedding the Living Standards Framework (LSF) and He Ara Waiora into our policy advice by
- Publishing the refreshed Living Standards Framework and Dashboard
- Continued use of the Living Standards Framework and He Ara Waiora in our stewardship documents
- Continuing to support the Government's wellbeing approach, including the Wellbeing Budget
Delivering reforms for a sustainable public finance system by
- New developments in Public Finance System Modernisation: Clusters and multi-year policy arrangements
- Development of new Fiscal Targets
- Ongoing work on key legislative reforms
- Advising on Public Finance settings
- Delivering our stewardship documents
- Supporting the New Zealand Debt Management reform
Securing economic recovery by
- Advising on COVID-19 responses and strategies
- Advising on the Government's economic strategy
- Enabling and supporting New Zealand exporters
- Responding to microeconomic and macroeconomic challenges
- Providing regular economic forecasting and modelling
- Ongoing work on the Overseas Investment Act reform
Navigating big issues/Government priorities by
- Funding and financing the mitigation and adaptation of climate change
- Enabling housing affordability and infrastructure availability
- Ongoing work on the Resource Management Act reform
- Multi-year funding and financial governance arrangements for the health system
Strengthening Te Tai Ōhanga - The Treasury through clear direction, supporting people and operational excellence by
- Strengthening organisational governance and accountability
- Providing system security and data management
- Providing shared services to our partners
- Delivering our core products with operational excellence
He waka eke noa
A canoe which we are all in with no exception - we are all in this together
In our role as the Government's lead economic and financial advisor, we aspire to work in the spirit of tiakitanga, making New Zealand a better place for people today and in the future. We monitor and seek to positively influence a range of indicators that reflect our strategic outcomes and better living standards for all New Zealanders, including the following.
A strong, growing, resilient economy for all
Real Gross Domestic Product (GDP)
Inflation-adjusted measure that reflects the value of all goods and services produced in New Zealand, after deducting the cost of goods and services used in the production process
- June 2021: 5.2%
- March 2022: 5.1%
Inflation
Annual inflation rate, as measured by the Consumer Price Index
- June 2021: 3.3%
- June 2022: 7.3%
Global Competitiveness Index
New Zealand's ranking in the World Economic Forum's Global Competitiveness Index declined to 31st position from 20th in 2021
- 2020: 20th
- 2022: 31st
Sustainable public finances that deliver intergenerational wellbeing
Structural balance
The structural balance is a reflection of New Zealand's underlying fiscal position. The Treasury expects the structural balance will return to surplus as the economy recovers from the pandemic to support fiscal sustainability and macroeconomic stability.
- 2020: -3.5%
- 2021: -0.1%
Net debt (excluding NZSF)
Net debt excluding the New Zealand Superannuation Fund (NZSF) reflects increased spending related to the response to COVID-19. Despite increasing, the Treasury assesses current net debt to be a prudent level considering debt sustainability, market access and wellbeing though there are long-term pressures.
- 2020: 25.1%
- 2021: 27.8%
Net worth
Total Crown net worth reflects growth in both financial and non-financial assets. Net worth remains at prudent levels that will give the Government options in how it responds to shocks and to support living standards.
- 2020: 36.5%
- 2021: 45.8%
System leadership that supports a high-performing public service
Perceived corruption
Transparency International's Corruption Perceptions Index ranks 180 countries and territories by their perceived levels of state sector corruption, from 0 (highly corrupt) to 100 (very clean)
- 2020: 88/100
- 2021: 88/100
Trust and confidence of New Zealanders in the public service
The Kiwis Count Survey asks 1,000 people about their trust and confidence in government and public services
- June 2021: 63%
- June 2022: 62%
Compelling advice on New Zealand's biggest issues
Housing
Percentage of households with housing costs greater than 30% of income
- 2020: 30.7%
- 2021: 30.1%
Health status
Percentage of adults reporting good, very good or excellent heatlh
- 2020: 87%
- 2021: 88%
Net greenhouse gas emissions [1]
Net greenhouse gas emissions in kilotonnes of CO2 equivalent
- 2018: 53.8 mt CO2-e
- 2019: 54.9 mt CO2-e
A Strong, Growing and Resilient Economy for All#
Our ambition is that New Zealand has a highly productive economy that is sustainable and responsive to the needs of all New Zealanders. The Treasury work to support sustainable growth and increase the resilience of the economy to protect it from future shocks.
COVID-19 response and resurgence
Despite COVID-19 volatility, the New Zealand economy has been resilient over the past two years, supported by both fiscal and monetary policy. Throughout 2021/22, the Treasury continued to play a key role in the response to the pandemic. We worked closely with partner agencies, and actively participated in all-of-government processes to provide compelling advice and support for policy and fiscal responses, with a particular focus on the economic impacts of COVID-19 restrictions and behavioural responses to COVID-19 outbreaks.
We provided policy advice on the economic response to supporting businesses through the Delta and Omicron outbreaks, focusing on viable and ongoing businesses and industries impacted as a result of public health measures and the spread of COVID-19. We worked with Inland Revenue to introduce the Resurgence Support Payment (RSP) and COVID-19 Support Payment (CSP). We advised on how the Small Business Cashflow Scheme could best support ongoing cashflow needs of small-to-medium businesses. Through these schemes, the following was provided:
Resurgence support payments:
- $2.9 billion to 230,741 businesses
COVID-19 support payment
- $1.3 billion to 113,031 businesses
Small business cashflow scheme
- $537.5 million to 35,239 businesses
Through collaboration with the Ministry of Social Development, we provided advice on the roll-out of the COVID-19 Wage Subsidy in August 2021, supporting 1.36 million unique jobs in 2021, and provided advice to ensure the COVID-19 Leave Support Scheme and Short-term Absence Payment were fit-for-purpose.
The New Zealand events sector was significantly impacted by the COVID-19 lockdowns. The Treasury supported the sector by contributing to the work of the Ministry of Business, Innovation and Employment, to introduce the Events Transition Support Payment, an insurance-type scheme to provide confidence to organisers of large-scale events through the pandemic, which paid $40.7 million across 85 events.
We continued to provide strategic fiscal management advice on the COVID-19 Response and Recovery Fund (CRRF), refining the criteria for CRRF funding allocations, increasing the CRRF to ensure that sufficient funding was available, and supporting the closure of the CRRF at Budget 2022.
Jointly, with the Department of the Prime Minister and Cabinet, the Treasury ran a centralised funding process covering urgent COVID-19 costs faced by government agencies.
We provided the Minister of Finance, and the Department of the Prime Minister and Cabinet, with advice on the reconnection pathway, to reconnect New Zealanders and open borders through economic impact analysis, and convening the agenda for modelling and quantitative analysis of the various options to reopen the borders.
Supporting sustainable economic growth and productivity
New Zealand's successful response to COVID-19 places us in a strong position to address the next set of challenges facing our economy. These challenges range from inflation, to mitigating the impact of climate change; the housing crisis; the health challenges; ageing infrastructure; and micro and macroeconomic constraints. Addressing these is critical to achieving our ambition of a strong, growing, and resilient economy for all New Zealanders.
Underpinning our response to these issues is tackling New Zealand’s well-known economic productivity challenge.
In 2021/22, work across the Treasury has supported development of a strong, growing, and resilient economy for all. We have provided advice on addressing near-term challenges, in particular the transition to a more COVID-resilient economy, which has been informed by our engagement in COVID-19 modelling work. We have also collaborated with other agencies to advise on how best to respond to inflation, including measures to address cost of living pressures.
With a view to the medium-term, we have provided advice to support the government in delivering its economic strategy for a high-wage, low-emissions economy that provides economic security in good times and bad. We have worked with the Economic Chief Executives group to monitor progress towards this vision. We have also provided advice to the Minister of Finance on policy and spending decisions in areas relevant to the economic strategy such as Industry Transformation Plans, Regional Development, and Immigration. We have contributed to cross-agency and tripartite work on a proposed social unemployment insurance scheme (New Zealand Income Insurance Scheme).
Our work on the government's economic strategy has been informed by the analytical thinking we have undertaken to better understand the drivers of economic performance in New Zealand. This has included research into New Zealand's economic structure, productivity, incomes, and links to wellbeing, some of which was outlined by the Chief Executive in a keynote speech for the opening of the New Zealand Association of Economists annual conference.
We have led a significant legislative reform programme with amendments to the Overseas Investment Act, Earthquake Commission Act (via the Natural Hazards Insurance Bill), and the Reserve Bank of New Zealand Act (jointly with the Reserve Bank of New Zealand). This reform means that New Zealanders' living standards are resilient to shocks and other risks.
Long-term, adapting to and mitigating the impacts of climate change is critical to achieving a strong growing and resilient economy for all New Zealanders. In 2021/22, we provided advice to the Minister of Finance on the Emissions Reduction Plan and National Adaptation Plan, as well as wider climate change policy and its links to the government's broader economic goals. In addition, we have worked to better understand and identify options to support the continued access and affordability of flood insurance.
In undertaking our core role as the government's economic and fiscal advisor, we will continue to focus on tackling longstanding challenges like productivity, climate change, and inequity - which benefits our future as well as current generations - through high quality spending and policy advice.
Sustainable Public Finances that Support Intergenerational Wellbeing#
The Treasury works hard to ensure our fiscal system is agile, responsive and able to sustain future shocks. The Treasury seeks to further improve the performance of our public institutions and deliver government investments that maximise value for money and contribute to lifting living standards.
Wellbeing and value for money analysis and reporting
Te Tai Ōhanga - The Treasury is committed to ensuring that wellbeing and value for money are central to our work. In 2021/22, we began working towards delivering our first regular report on the state of wellbeing in Aotearoa New Zealand, as is now required under the Public Finance Act 1989. This report, Te Tai Waiora: Wellbeing in Aotearoa New Zealand 2022, is planned to be published in November 2022. Te Tai Waiora will draw on the Treasury’s two wellbeing frameworks – the Living Standards Framework (LSF) and He Ara Waiora (HAW), as well as the LSF Dashboard – as a starting point for its analysis.
In April 2022, we released the first in a series of background papers in the lead-up to Te Tai Waiora. This paper, Trends in Wellbeing in Aotearoa New Zealand 2000-2020, was launched with a speech by the Secretary that outlined our broader approach to Te Tai Waiora. The Secretary's speech was the first of a virtual (online) wellbeing seminar series. The series aimed to include external perspectives as a source of challenge to, and intellectual stimulation for, our work on developing Te Tai Waiora. We held three additional wellbeing seminars during 2021/22, featuring two international speakers and one from New Zealand.
This year, we supported the Minister of Finance with delivering the fourth Wellbeing Budget: Budget 2022. We strengthened our approach to incorporating our wellbeing frameworks and value for money analysis for assessing Budget initiatives and advice.
Value for money can be defined in multiple ways. Our approach to value for money is broad (incorporating wellbeing analysis) and continually evolving. The Treasury considers a range of outcomes and values, including Aotearoa New Zealand-specific perspectives. For Budget 2022, the value for money assessment comprised three elements: (i) value (wellbeing impacts, including costs and benefits), (ii) alignment (with the Government's goals and strategies) and (iii) delivery (assurance of effective delivery). Funding requests through Budget 2022, as well as requests for COVID-19 Response and Recovery funding, were scrutinised with this framework.
Living Standards Framework
Developing and embedding our frameworks
Te Tai Ōhanga - The Treasury applies two wellbeing frameworks to its work: the Living Standards Framework (LSF) and He Ara Waiora. One of the Treasury's five strategic priorities is developing and embedding the LSF and He Ara Waiora in our policy advice. Along with these frameworks, we have refreshed our Pacific Strategy in 2021/22 to embed into our work.
The Living Standards Framework
In 2011, Te Tai Ōhanga published the LSF to ensure that the policy advice we give considers broader impacts in a way that is both systematic and evidence based. Since it was first published, we have continued to update the framework in response to emerging international and New Zealand evidence, our own research and dialogue with people across Aotearoa New Zealand. In October 2021, Te Tai Ōhanga released an updated version of the LSF to better reflect child wellbeing and culture, including Māori and Pacific perspectives.
The updated framework includes concepts of collective wellbeing, has redefined the wellbeing domains to better reflect child wellbeing and includes a new level: Our Institutions and Governance.
In April 2022, we released a refreshed LSF Dashboard (a measurement tool with indicators of the different elements of the LSF) to align with our updated LSF. The refreshed LSF Dashboard provides indicators for the new Our Institutions and Governance level of the framework, is being aligned with the revised wellbeing domains in the 2021/22 LSF and includes more indicators relevant for understanding child wellbeing. We continue with progressing our commitment to embedding the LSF in our policy advice. We are supporting our staff in this ambition through internal guidance and training and working towards reinvigorating LSF groups that champion the application of the framework across the Treasury.
To learn more go to The Living Standards Framework
Ehara taku toa i te toa takitahi, engari he toa takitini
My valour is not that of an individual, but that of a multitude
He Ara Waiora
He Ara Waiora is a framework that helps Te Tai Ōhanga with our understanding of waiora, often translated as being a Māori perspective on wellbeing.
We are developing practice for applying the principles and behaviours of He Ara Waiora (the means) such as manaakitanga and tikanga. A highlight of 2021/22 has been the inclusion of He Ara Waiora in our work on Budget 2022. This involved requiring agencies to show how their proposed Budget initiatives aligned with the principles of manaakitanga and tikanga and selecting two agencies (Ministry of Housing and Urban Development and Te Puni Kōkiri) to prepare exemplar initiatives that would show alignment with the five means set out in He Ara Waiora: tikanga, manaakitanga, kotahitanga, whanaungatanga and tiakitanga. Agencies acknowledged the importance of engaging with Māori in their response to the tikanga component, although highlighted that there is a need for more.
Ngā Pūkenga, a group of expert Māori thought leaders, meets quarterly with Te Tai Ōhanga in a hoa haere partnership that provides appropriate stewardship in our use of He Ara Waiora. The concept of hoa haere means that the group are valued travelling companions on our journey to embed He Ara Waiora in our work.
To learn more go to He Ara Waiora
Pacific Strategy 2022-2025: Ua gatasi le futia ma le umele
In May 2022, we released a refreshed Pacific Strategy - the Pacific Strategy 2022-25: Ua gatasi le futia ma le umele. The strategy supports our vision of lifting living standards for all New Zealanders.
The strategy has two overarching objectives:
- To build internal knowledge, capability and input into our advice and operations - to help with ensuring that all our people are knowledgeable, familiar with and understand how to apply the Pacific operating model in our thinking. This operating model is a tool developed specifically for Te Tai Ōhanga to bring Pacific dimensions into our day-to-day work and give life to our Pacific Strategy.
- To build Te Tai Ōhanga connections - furthering our engagement with Pacific economic stakeholders and leaders to help with encouraging their advice and information on ways in which we can better collaborate on raising Pacific economic performance and living standards. Through active participation and leadership in key priority areas for Pacific wellbeing, we also promote and model inter-agency collaboration and data sharing.
To learn more go to Pacific Strategy 2022-2025: Ua gatasi le futia ma le umele
System Leadership that Supports a High-performing Public Service#
The Treasury carries out our central agency role, providing leadership and support across the public service, harnessing the collaboration of all of government to lift living standards for all New Zealanders.
Our central agency and stewardship role
Te Tai Ōhanga - The Treasury is one of the public service's three central agencies jointly responsible for providing leadership, coordination and monitoring across the entire sector. The Treasury is also steward of the public service financial management and regulatory systems. To successfully fulfil this role, we must be wide-reaching in our engagement with our partners and stakeholders, ensuring that our advice is informed by the insights and experiences of a broad range of New Zealanders.
Public Finance System Leadership
The Treasury provides public finance system leadership through three main roles as the Head of the Government Finance Profession, the Head of the Investment Management System, and the Head of Performance Reporting.
In 2021/22 the Government Finance Profession team worked with finance leaders across the system to confirm a work programme focused on three workstreams: People, Common Practices, and Issues Management. These are underpinned by forums, training, and events available to government financial professionals through the Finance Development Programme (FDP). In 2021/22 we:
- Finalised a People and Capability Strategy which provided the platform for establishing the following new projects: career pathways and pipeline; attracting and developing Māori and Pacific people to the finance profession; and developing centralised financial training resources.
- Launched a project on common financial policies and worked closely with partners on the Common Process Model hosted by the Department of Internal Affairs.
- Delivered 34 events through the Finance Development Programme to more than 3,000 government finance professionals.
The Treasury is the kaitiaki of New Zealand's Public Service Investment system, ensuring it delivers value and intergenerational wellbeing for all New Zealanders. This includes facilitation of system leaders including Te Waihanga Infrastructure Commission, Government Chief Digital Officer, Government Chief Data Steward, Government Chief Information Security Office, and New Zealand Government Procurement to bring a system perspective to advice to the Minister of Finance. In the 2021/22 year, this has involved system analysis of market conditions to support significant investment Budget decisions through the Investment Panel advice. We have also sought system leader input into quarterly investment reporting for the Minister of Finance which provides a portfolio view of government investments in planning and delivery.
We worked with the Office of the Auditor-General and Audit New Zealand to develop Good Practice Guidance on reporting about performance. We also produced guidance to support agencies to comply with the new standard for service performance reporting, and refreshed guidance on Statements of Performance Expectations. We responded to concerns raised by the Auditor-General on the transparency of the CRRF by releasing data on funding decisions and expenditure.
The Treasury is committed to improving our Public Finance System leadership role through internal capability building covering our people, systems, strategy, and structure. In 2021/22 the Treasury undertook a realignment exercise to ensure that we are well set up to provide public finance system leadership. As an initial step, work was undertaken to develop a prioritised work programme focused on improving our core Vote work, getting more out of our existing systems and data, and defining the desired future state.
Stewardship
Through our regulatory stewardship role, we are working with other agencies to improve monitoring, reviewing, and reporting on regulatory systems as well as providing robust analysis and implementation support for regulatory system changes and good regulator practice. In 2021/22, we worked with regulatory executives to support regulatory stewardship capabilities, address systemic regulatory issues, and apply a regulatory lens to the Budget process.
We deliver a range of stewardship documents. In 2021/22, we combined the Treasury’s Statement on the Long-term Fiscal Position with the first Long-term Insights Briefing – He Tirohanga Mokopuna 2021. This provided the opportunity to analyse key trends and future pressures on revenue, spending, fiscal balance, and public debt while considering potential long-term fiscal impacts directly alongside a range of policy options available to address them. For example, managing the growth of health expenditure or changing the policy settings for New Zealand Superannuation.
Our work on the role of public investment is discussed in both He Tirohanga Mokopuna 2021 and the Treasury's analysis and recommendations for fiscal rules published in May 2022. This analysis, which includes more of a discussion on infrastructure, is summarised in the Treasury's 2022 Investment Statement - He Puna Hao Pātiki.
Strengthening International Linkages
As well as supporting the New Zealand Government's overall hosting of Asia-Pacific Economic Cooperation (APEC) in 2021, the Treasury also led the Finance Ministers' Process in a virtual environment. This included delivery of high-level policy forums on fiscal policy, budget systems, and tax, and supporting APEC Finance Ministers with their focus on the economic response to COVID-19 across the region (alongside meeting other long-term challenges such as climate change).
The Treasury is part of the Wellbeing Economy Governments (WEGo) group, which also involves the governments of Scotland, Iceland, Canada, Finland, and Wales. WEGo promotes the sharing of expertise and economic policy practices in bringing a wellbeing approach into policy, with the aim of moving the concept of wellbeing from theory into practice. We also engaged with other Treasuries and Finance Ministries, both bilaterally and in multilateral fora. These engagements were wide ranging, covering dialogues between Secretaries on a broad range of policy matters, including with China, Australia, and Singapore, and engagements at team level on specific policy areas.
Leadership, Coordination, and Monitoring
Our responsibility as a central agency has seen us deliver and engage in a range of activities that provide leadership and support to the public service. We have:
- Engaged in complex cross-agency priorities - climate change, Resource Management Act reform, health and disability reform - to collaboratively work through key policy issues and trade-offs.
- Sponsored NZAE 2022 I New Zealand Association of Economists Conference, at which the secretary delivered the opening keynote speech, and 13 Treasury papers were presented.
- Supported addressing the housing crisis through contributing to drafting papers to the Housing Technical Working Group, and contributed to a methodology for describing the climate impacts of new housing developments.
- Contributed to providing evidence and support to stage one of the Waitangi Tribunal's Wai 2750 Kaupapa Inquiry to hear claims concerning Crown housing policy and services.
- Strengthened our involvement with the academic and research communities through sponsorship of the Motu Public Policy Seminar, and by presenting on the LSF and He Ara Waiora.
- Delivered a series of Treasury Guest Lecture Seminars as well as seminars in partnership with the Government Economics Network.
- Launched a new Analytical Notes series, including papers on macroeconomics, wealth distribution, and child poverty.
- Continued to develop and build capability in the use of the LSF and He Ara Waiora in the Budget process, and are exploring ways to incorporate a wellbeing approach into the regulatory impact analysis processes.
The Treasury continues to support system governance through the Housing Technical Group, Investment Management, our Governance and Appointments team, and supporting our commercial entities. We support agencies to deliver the government's priorities, including infrastructure and reforms.
Compelling Advice on New Zealand's Biggest Issues#
The Treasury helps the public service navigate current big issues and those that lie ahead. The Treasury drives the collective impacts across the system to tackle the most critical challenges and opportunities New Zealand faces.
Advising on New Zealand's biggest issues
Our role as the Government's lead economic and financial advisor comes with a responsibility to provide compelling advice on Aotearoa New Zealand’s biggest issues.
In 2021/22, we provided advice on a range of issues, including the following.
Adapting to and mitigating the impact of climate change
Our commitment to prioritising this work saw us establish a dedicated Climate Change team to support and lead our work in the climate change area across the organisation and with other agencies. In 2021/22, we supported and provided advice on the establishment of the Climate Emergency Response Fund (CERF), which was announced as part of the Budget Policy Statement in December 2021, and the first round of decision making on investments from the CERF as part of Budget 2022. We also contributed to significant inter-agency processes on producing the first Emissions Reduction Plan and the first National Adaptation Plan (NAP) - in particular the chapters relating to funding and financing, and infrastructure - while providing the Minister of Finance with overarching ongoing advice on the development of these plans. We consulted with stakeholders on flood insurance alongside the consultation on the draft NAP. Through the year, we also progressed work on the New Zealand Sovereign Green Bond Programme and provided advice to support major Government decisions on updating New Zealand’s Nationally Determined Contribution under the Paris Agreement and the setting of emissions budgets.
Navigating the health sector challenges
We continued to work closely with other agencies to contribute towards health system reform ahead of the establishment of new entities on 1 July 2022. We led advice on multi-year funding in Vote Health, culminating in recent announcements at Budget 2022 and on capital system settings. Through the year, we worked closely with the Ministry of Social Development, the Ministry of Health and the Public Service Commission on the appropriate structure to house disability support services from 1 July 2022.
Addressing the housing crisis
Housing affordability has continued to be a key priority for the Treasury. In 2021/22, we worked closely with Te Tūāpapa Kura Kāinga - Ministry of Housing and Urban Development as it developed the first-ever strategy for the housing and urban development system. This strategy, the Government Policy Statement on Housing and Urban Development, was published in September 2021. Through the year, we also provided a range of advice to the Ministers of Finance and Housing on the development of new policy initiatives and on the provision of housing support. We supported the establishment of several new funds and contributed to the development of papers that lifted the understanding of the housing crisis and advanced the thinking on housing unaffordability. In 2021/22, the Housing Technical Working Group - a joint group between the Reserve Bank of New Zealand, Ministry of Housing and Urban Development and Treasury - completed analysis of the housing and urban development system in Hamilton-Waikato.
Supporting and advising on legislative and system reforms
Resource Management Act Reform
In February 2021, the Government announced it would repeal the Resource Management Act and replace it with three proposed Acts: the Natural and Built Environments Act; the Strategic Planning Act (SPA); and the Climate Adaptation Act. The Treasury is actively involved with the Strategic Planning Act Interagency Board (established under the Public Service Act), which has oversight of the development of the SPA, provides Ministers with advice and helps support coordination across the three Acts. In 2021/22, along with providing advice to Ministers and supporting the Secretary and directors in their engagement with the SPA Board, we also supported the Minister of Finance in his role as Chair of a Ministerial Oversight Group and continue to provide him with advice on papers related to reform decisions. A key driver for the Treasury's engagement is the Government's objective to “Better enable development within environmental biophysical limits, including a significant improvement in housing supply, affordability and choice, and a timely provision of appropriate infrastructure, including social infrastructure”.
Overseas Investment Act Reform
In 2021, the Overseas Investment Amendment Act No. 3 was passed into law. This was the culmination of nearly four years of wide-scale reform to the overseas investment regime, substantially streamlining the treatment of productive investment while also better protecting strategic assets. This year, the full suite of reforms came into force, including statutory timeframes for processing overseas investment applications to improve investor certainty. The Treasury will continue to monitor the effectiveness of the reforms to ensure that their operationalisation aligns with policy intent. With support from Toitū Te Whenua Land Information New Zealand and Manatū Ahu Matua Ministry for Primary Industries/Te Uru Rākau, the Treasury is leading work to amend the way in which overseas investment in forestry is screened under the Overseas Investment Act. In May 2022, the Overseas Investment (Forestry) Amendment Bill was introduced into Parliament by Associate Minister of Finance. The Bill strengthened the rules relating to overseas investments that result in the conversion of land to production forestry.
Welfare Reform
In Budget 2022, the Government announced changes to how child support payments work so that all child support payments will be passed on to sole-parent beneficiaries as income rather than being retained by the government, giving sole parents more money to help their whānau. This is expected to lift between 6,000 and 14,000 children out of poverty on the before-housing costs measure. In 2021/22, we also collaborated with agencies and social partners on the development of a proposal for a social insurance scheme (the New Zealand Income Insurance Scheme) on which the Government consulted publicly in the first half of 2022.
Three Waters Reform
In July 2020, the Government announced the Three Waters Reform Programme. This reform is to ensure all New Zealanders can enjoy safe, affordable and sustainable drinking water, wastewater and stormwater services and is in response to mounting evidence on the challenges facing three waters service delivery nationally. In 2022, we collaborated with stakeholders, including the Department of Internal Affairs, a working group of independent representatives and local government to provide input into policy analysis on a new model for water service delivery. We also provided the Minister of Finance with policy advice and input on a range of issues regarding three waters reform.
Our People, Workplace and Capabilities#
The Treasury acknowledges that one of our key challenges is to ensure we have the right organisational environment that enables our people to work together and to make the right trade-offs for what the Treasury prioritises efficiently and effectively. In order to achieve our vision, we must work in a way that creates the conditions for everyone at the Treasury to do their best work. Our values and commitment to inclusion and diversity are at the heart of who the Treasury is and what the Treasury does.
Our people at a glance
* Includes fixed-term kaimahi.
** Individuals may identify as multiple ethnicities, therefore the total % does not equate to 100%.
*** Middle Eastern, Latin American and African.
Inclusion and Diversity#
To meet our strategic vision, we must work in an environment in which everyone at Te Tai Ōhanga can do their best work. We want Te Tai Ōhanga to be a genuinely inclusive organisation and one that attracts and retains the best talent, draws on our diverse skills and experiences and is informed by diverse perspectives.
Our primary focus for the year has been on cultural competence, combining the aims of the Papa Pounamu work programme, Whāinga Amorangi (Māori capability) and Te Puna Anamata (Māori language plan) work. This included investing in strategic relationships, building our people capability and culture and evolving our policy frameworks to reflect te ao Māori.
Te Urupare i te Mariu - Addressing Bias
Addressing bias is a critical factor in ensuring everyone in the public service has a fair opportunity in recruitment, career progression and development opportunities.
During the year, several initiatives were implemented to address and prevent bias in the workplace. First, all new starters now complete an e-learning module as part of their induction pathway. This sets out our expectations and educates our new people on understanding bias, how it is manifested and how we can act to mitigate bias in the workplace. To reduce bias from occurring, training for our people needs to be supported by workplace policies and practices. All our related policies are updated on a regular review cycle, and in 2021/22, we collaborated with InsideOUT on reviewing two that are key: our refreshed Parental Leave Policy and our new Transitioning at Work Policy.
Te Puna Rōia (Treasury's Legal Team) is also a finalist for the 2022 Diversity Works Diverse Talent Award and the In-House Lawyers Association of New Zealand People and Culture Award. These nominations recognise the team’s mahi in developing cultural capability, including by implementing a successful recruitment and retention model designed for Māori lawyers. The team’s diverse make-up is recognised as one of its strengths not only within Treasury but also across the government legal network.
Te Āheinga ā-Ahurea - Cultural Competence
Reflecting the significance of the Māori-Crown relationship and building our cultural competence and confidence across the broadest range of cultures is integral to ensuring inclusion.
Building our cultural competence and capabilities is a priority for Te Tai Ōhanga. This includes building our ao Māori and reo Māori capabilities as detailed in the Māori-Crown Relations Capability section of this report.
Another focus is building Pacific cultural competence. An ‘Understanding Pacific Communities' e-learning module has been developed to be launched during the July 2022 ‘go live' of our new learning management system. We have also begun scoping a second e-learning module focused on applying the Pacific Operating Model to policy advice and people leadership.
Hautūtanga Ngākau Tuwhera - Inclusive Leadership
Diversity and inclusion capability across the system depends on strong, inclusive leadership.
Our People Leader Forums bring together our leaders three times a year. These provide opportunities for strengthening connections, setting expectations, hearing external perspectives and developing our collective leadership practice. The forums incorporate activities such as Māori capability building and the use of strengths-based development principles, and these help to ensure that our leaders model and lead these practices within Te Tai Ōhanga. During 2021/22, all our people leaders also attended He Manaaki refresher training. He Manaaki captures our approach to performance and growth, recognition and rewards, and remuneration. This ongoing training series supports our people leaders with leading inclusively with a focus on tailoring their approach to holding effective coaching, developmental and performance conversations. The sessions provided tools and tips for leading quality conversations and opportunities to practise and respond to different scenarios relating to flexible working, inclusive behaviours and development.
Te Whakawhanaungatanga - Building Relationships
Inclusion and belonging is dependent upon having a diverse range of supportive relationships in our workplaces.
To welcome our new people to Te Tai Ōhanga, all are invited to join a pōwhiri in our wharenui. This helps with building a positive and inclusive relationship from the time of their arrival with us. Four Kotahi Learning Group sessions are also delivered as a core part of people's induction. These provide further opportunities for new starters to connect with one another in their early days as they learn more about Te Tai Ōhanga.
Ngā Tūhononga e Kōkiritia Ana e Ngā Kaimahi - Employee-led Networks
Having a space and mandate to connect with others with shared lived experiences supports people to bring their whole selves to work. Employee-led networks provide richness to workplaces and contribute valuable subject matter expertise.
We encourage and support our people to develop and join cultural, networking and social events, all of which are important for creating a sense of belonging and building relationships.
We have three employee networks: the Rainbow, Women's and China Capable Networks. Te Tai Ōhanga provides these with financial assistance for events, training and other initiatives. We encourage people to join the networks, to create new ones and to seek advice on and support for their network-specific activity programmes. We have developed a guide, to be published later in 2022, to help provide support to both existing and potentially new networks. An example of success from this year is the Rainbow Network’s launch of both their strategy and a new Transitioning at Work Policy.
Kia Toipoto - the Public Service Pay Gap
Our gender and ethnic pay gaps continue to fall, supported by various measures, including a pay gap calculator to be applied in recruitment and remuneration decisions, quality reporting and insights to leaders, and other initiatives in our Kia Toipoto action plan, published in November 2021. Our average gender pay gap reduced from 13.8% in 2020/21 to 9.8% in 2021/22.
He aha te mea nui o te ao? He tangata, he tangata, he tangata!
What is the most important thing in the world? It is people, it is people,it is people!
Māori-Crown Relations Capability#
Te Tai Ōhanga's Whāinga Amorangi Phase One plan was released In November 2021. This plan has a focus on advancing New Zealand history/Treaty of Waitangi literacy, te reo Māori and tikanga kawa. In addition to this, our plan promotes and strengthens understanding of the He Ara Waiora framework.
In February 2022, we held our first Māori capability baseline employee survey to help with understanding our current state capability and areas of opportunity. We developed a Team Talk guide, which our leaders used for facilitating conversations on the survey results. Through these conversations, team-based as well as individual Māori capability developmental goals were agreed. To further build our leaders' awareness and capability, our March People Leader Forum - centred on Māori capability - included sharing the survey results, launching and practising the guide and internal and external panel discussions.
Te Puna Anamata is our Māori language plan. Its long-term objective is to provide our people with tools, time and resources helpful to approaching our mahi/role at Te Tai Ōhanga with a clearer understanding of a Māori world view through learning and integrating te reo Māori on an everyday basis. To support both team and individual developmental goals, we launched four levels of te reo Māori courses, a Māori-Crown Relations course and Te Aronuku – our marae experience day. Due to COVID-19 restrictions in 2021/22, a range of courses were paused.
We have seen increased demand for te reo courses, including from those finishing one level while enrolling for the next. We also updated and relaunched our Puna Ako Māori language app to further support developing te reo Māori beyond the guidance offered by the formal courses.
Te Tai Ōhanga has a Māori capability framework with which teams and individuals can assess their capability and source guidance on extending this. Examples of success with this include teams learning and integrating Te Tai Ōhanga karakia in hui, learning and practising pepeha, applying the He Ara Waiora framework to their mahi and increased levels of attendance at the available courses.
We continue to build our engagement with Māori leaders through He Kōrero Rangatira forum, which is co-hosted with the Governor of the Reserve Bank, to discuss the importance of the Māori economy in driving the resilient future for Aotearoa. We also meet with Ngā Pūkenga, who are our hoa haere as we work to embed, He Ara Waiora. We also undertake targeted engagement with iwi and Māori on specific policy areas, including resource management, flood insurance, commercial matters and wellbeing.
Te reo Māori course attendance
127 (22%)
Kaimahi as at 30 June 2022
Wellbeing/Health and Safety#
We have continued to invest in the wellbeing and health and safety of our people. In February 2021, our Annual Obligations Confirmation Process was extended to include a requirement for all employees and contractors to annually review and confirm their understanding of and commitment to the Health and Safety at Work Act 2015 and our related policies.
Our Wellbeing, Health and Safety Committee has been revitalised in the COVID-19 recovery environment, returning to business as usual and proactively providing support for the COVID-19 response.
We have continued to progress our people-centred approach through supporting flexible working and emphasising the importance of mental and physical wellbeing as well as through our health and safety practices. We have supported our people with a range of initiatives and resources for helping to manage wellbeing as well as with accessing further guidance. Initiatives have included health checks, frequent wellbeing pulse surveys, weekly health and wellbeing tips and tricks, intranet bulletins and webinars featuring senior leaders as well as guest speakers.
Given the importance of mental health and wellbeing, we have strengthened our support and resources with additional mental health support training for people leaders and workplace health and safety representatives.
We have also continued to closely monitor the COVID-19 environment, adjusting our settings appropriately whenever there is a change nationally (and, where relevant, internationally) and providing channels for our people to give their perspective and ask for guidance.
Strengthening the Treasury#
The Strengthening the Treasury work programme was established in 2019 to improve the Treasury's governance, systems, processes, and risk and information management. In early 2020 and as reported last year, we established two new directorates through structural realignments - the Organisational Strategy and Performance Directorate and Economic Strategy Directorate. In 2021/22, we continued to embed the realigned structure into our organisation and the process and system changes that resulted from this realignment.
Strengthening the Treasury has three workstreams: setting a clear direction, supporting our people to succeed and building strong systems and processes. Since its establishment our practices and processes have evolved to become very much part of our business-as-usual practices.
Strengthened Governance
In 2021/22, we embedded our new governance structures aimed at strengthening our governance practices and ensuring we are delivering in an effective, transparent and accountable manner.
Our governance framework comprises the Executive Leadership Team - the primary governing body - supported by three subcommittees:
- Finance and Prioritisation - oversight and assurance of the whole of the Treasury's finances, business planning, prioritisation, resource deployment and investment decisions.
- People, Culture and Capability - oversight and assurance of the whole of the Treasury's people, culture and capability, strategies, people policies and practices.
- Risk and Assurance - oversight and assurance of the whole of the Treasury's risks and internal controls and champions for the risk and assurance culture.
The subcommittees have continued to support stronger collective leadership on significant strategic matters for the Treasury, ensuring that we are fulfilling what is required to meet our vision, our strategic priorities and our outcomes.
Embedding a new Annual Planning and Prioritisation approach
Effective planning and prioritisation enables us to ensure our work programme delivers to our strategic direction and to measure our progress. In 2019/20, we introduced a new annual planning and prioritisation process to align the Treasury's work programme to our Strategic Intentions 2021-2025, and to support meaningful prioritisation discussions and decisions. During the year, this new process has enabled greater visibility of our work and how it aligns to our priorities as well as providing a backdrop for how we prioritise our work. This has been especially important during the year when our workforce capacity and capability has been under pressure due to illness and turnover at times.
Now one year in, the process is becoming well embedded. Over the year, we have also reframed our organisational reporting to respond to this process as well as our strengthened governance framework. This is providing us with meaningful insights to our performance against our strategic direction as well as supporting decisions on prioritisation of our work programme.
Managing Organisational Risk and Compliance
During the last quarter of the 2021/22 year, we began the process of implementing a new risk management framework. While still in its infancy at the time of this annual report, we are already seeing benefits from this framework in how we identify and assess our risks. Work will continue to evolve this framework during 2022/23 and ultimately how we manage risk across the Treasury. The Treasury’s compliance work programme also progressed during the 2021/22 year and included the undertaking of an Annual Obligations Confirmation to ensure staff are familiar with and are following all guidance set out in our corporate policies. The annual obligations process included policies on wellbeing, health and safety, security and confidentiality, code of conduct, and media. We have also reviewed and updated our corporate policies during the year to ensure they remain relevant and fit for purpose, and that they reflect our current working environment. For example, this year, we developed a COVID-19 Vaccination Policy.
Transparent Ministerial Reporting
In 2021/22, we saw a continued increase in the volume of Official Information Act (OIA) requests and written Parliamentary questions (WPQs) although a reduction in Ministerial correspondence. The main topics of interest were:
- the Government response to COVID-19, including financial support for individuals and businesses
- tax and the rising cost of living
- climate change
- transport and infrastructure projects
- state-owned enterprises (SOEs) such as Air New Zealand, New Zealand Post and KiwiRail.
We further improved our approach to departmental OIAs, with 100% of the OIA requests being given responses within the statutory timeframe for responding. We maintained our timeliness (of response) rate of 100% for WPQ responses provided to Ministers, the significance of which was extended by there being a 85% increase in volume compared to 2020/21.
Strengthened Information Security
Continuing the progress of recent years, we further strengthened our information security. The Information Technology Governance Committee (which sits outside of the Treasury Governance Framework) has established security assurance reporting that supports the committee with its strategic oversight of the management and delivery of our IT assets. Through our annual security workplan, we have actively improved our information security maturity. We have also undertaken a number of independent reviews of our IT infrastructure systems and applications, demonstrating that we have in place the expected controls necessary to protecting our IT environment. We continued with implementing new capabilities and processes for enhancing our ability to prevent, detect and respond to threats to our information security.
Embedding Sustainable Practices#
Reducing our greenhouse gas (GHG) emissions has continued to be a priority for the Treasury. In March 2021, we received Toitū carbonreduce certification for having measured and audited our greenhouse gas emissions in accordance with ISO 14064-1:2006 and for our commitment to managing and reducing our emissions. Being one of the first agencies to receive this certification places us in a strong position to meet the Carbon Neutral Government Programme requirements that began this year.
Total annual emissions and their source
In 2021/22, we produced reports on our emissions for the years 2018/19 (baseline year), 2019/20, 2020/21 and 2021/22 as summarised below. In 2021/22, we emitted 135.38 tCO2-e (tonnes of carbon dioxide equivalent), an 88% reduction on our base year (1,129.21 tCO2-e). The significant reduction of carbon emissions in 2021/22 as well as in 2020/21 is mostly attributed to falls in travel-related emissions. We expect travel to rise with the borders opening post COVID.
Category | Scope | 2018/19 tCO2-e (Baseline) |
2019/20 tCO2-e |
2020/21 tCO2-e |
2021/22 tCO2-e |
---|---|---|---|---|---|
1 Direct emissions | Scope 1 | 0.00 | 0.00 | 0.00 | 0.00 |
2 Indirect emissions from imported energy | Scope 2 | 19.13 | 33.91 | 35.50 | 34.10 |
3 Indirect emissions from transportation | Scope 3 | 1,062.04 | 667.38 | 103.25 | 72.57 |
4 Indirect emissions from products used by the organisation | 48.04 | 32.94 | 38.73 | 23.66 | |
5 Indirect emissions associated with the use of products from the organisation | 0.00 | 0.00 | 0.00 | 0.00 | |
6 Indirect emissions from other sources | 0.00 | 0.00 | 0.00 | 0.00 | |
TOTAL GROSS EMISSIONS (All measured emissions) in tCO2-e | 1,129.21 | 734.23 | 177.47 | 135.38 | |
Change in gross emissions (all categories) from previous financial year | -35% | -76% | -24% | ||
Change in gross emissions (all categories) since base year | -35% | -84% | -88% |
Total emissions breakdown by emission sources 2021/22
These emissions results align with the Ministry for the Environment's 2022 Measuring Emissions guidance. We undertake a review of the Treasury's operational expenditure records each year and use a tool to estimate the GHG emissions based on the cost of an operational activity. Some emissions sources have been excluded due to some data not being available. We will work with providers to ensure necessary data is available to enhance our reporting.
Emissions intensity by FTE and expenditure
Since 2018, we have experienced changes in both the number of full-time equivalent employees (FTEs) and expenditure. Between 2018/19 and 2021/22, emissions per FTE and per million dollars of expenditure have significantly reduced, as shown by graph below, mostly due to the COVID-19 context.
Key performance indicators (KPIs) for FTEs and expenditure by financial year
* The FTE count reflects an average of active FTE across each financial year.
Emissions reduction plan, targets and future reporting
Emissions Reduction Plan:
Our zero-carbon strategy sets out an action-based pathway to becoming a zero-carbon organisation with our travel, energy and waste emissions. We aim to display public service leadership by measuring, managing and reducing our emissions and having this process externally verified. As part of our zero-carbon strategy, we continuously offset our emissions informally through voluntary tree-planting exercises.
Our carbon emissions reduction targets focus on three areas:
- Travel – this is the largest contributor to our GHG emissions. It is essential that our Travel Policy is ambitious.
- Waste – the Treasury conducts regular waste audits for monitoring and evaluating the amount of waste the organisation generates.
- Energy – the Treasury needs to have the right settings in place to ensure we maximise the energy efficiency of our workspace.
Emissions reduction targets and progress towards our targets:
The Treasury has consulted with our stakeholders to set science-aligned targets for keeping global warming to less than 1.5 degrees of warming, as required under the Carbon Neutral Government Programme. Our target also aligns with the requirements of the Toitū carbonreduce programme. In 2022, we agreed medium and long-term targets, summarised in the table below. The year 2021/22 shows a significant reduction of carbon emissions, although it is clear that reduction in business travel due to COVID-19 and pandemic lockdown restrictions have influenced these results. The Treasury has, however, carried out the activities included in our original Emissions Management and Reduction Plan:
- We have been in the final stages of updating our Travel Policy that, together with travel guidance, will support a reduction of our travel emissions to ensure this target is met.
- In early 2022, we conducted our regular waste audit to monitor and evaluate the amount of waste the Treasury generates, and communicated across the organisation to encourage behaviours that reduce the amount of waste we send to landfill.
- We have also been in the process of reviewing the recommendations of the National Australian Built Environment Rating System - New Zealand (NABERSNZ) report completed late in 2021 and will work with our supplier on actioning agreed recommendations.
We are committed to reviewing and improving our targets and are working towards including other specific targets in the years ahead.
Target | Baseline period | Type of target (intensity or absolute) |
Categories covered | Reduction target | Progress (emissions intensity reductions) | |
---|---|---|---|---|---|---|
Percentage | Absolute tCO2-e | |||||
2025 overall | 2018/19 | Absolute (tCO2-e) | All | -21% | -237 | -88% |
2030 overall | All | -42% | -474 | |||
2025 specific | Travel related (category 3) | -23% | -241 | -96% | ||
2030 specific | Travel related (category 3) | -45% | -472 |
Excluded business units
As of 30 June 2022, the Treasury had a few employees not based in Wellington, less than 1% of our worforce. The waste, water and electricity emissions created from these employees have been included in the ‘working from home’ emissions source.
Note
- [1]New Zealand's Greenhouse Gas Inventory 1990-2021 will be published by 15 April 2023.
SECTION TWO - Wāhanga Tuarua | Ko ā mātou Whakatutukitanga | Our Key Achievements#
Policy Advice and Financial Services (MCA)[2]#
The Treasury forecast to spend $90.331m / The Treasury spent $79.309m
(of our $437.489m)
The single overarching purpose of this appropriation is to provide the government with high quality policy and financial advice and to deliver financial services.
Policy Advice
Our advice enables and facilitates the decisions made by the Government and Ministers to improve New Zealand’s economic performance, strengthen the performance of the public service and maintain a stable and sustainable macroeconomic environment. The quality of our policy advice is a key priority for the Treasury.
Measure[3] | Standard | Result |
---|---|---|
Papers with a score of 3 or more | 80% | 69% |
Papers with a score of 4 or more | 20% | 17% |
Average score of assessed papers | 3.5 | 3.2 |
We measure the quality of our policy advice through multiple metrics. One important measure is an internal Quality of Policy Advice Panel. This quarterly panel assesses papers against the DPMC Policy Quality Framework based on a common set of standards that define good quality. Our goal is to ensure that we are delivering impactfully on our role as the Government's lead economic and financial advisor. In 2021/22, our policy advice was assessed through this panel and an independent review. Through these assessments, it is clear that, while our policy advice is well received and the quality remains consistent with prior years, we can continually strengthen our policy advice. We deliver regular policy forums to test and further develop emergent advice and address issues of policy capability through our in-house learning and development programmes.
Providing policy advice on Government's priorities
Climate change
In 2021/22, we supported and provided advice on a range of work to finance adaptation to and mitigation of climate change. This included the establishment of the Climate Emergency Response Fund (CERF), decisions on investments from CERF as part of Budget 2022, the Emissions Reduction Plan and the National Adaptation Plan.
In November 2021, the Government announced a New Zealand Sovereign Green Bond Programme. The purpose of the programme is to help provide financing for New Zealand’s low-carbon transition. We substantially progressed work on the framework for the programme, with an inaugural Sovereign Green Bond issue planned to take place before 31 December 2022.
We also delivered modelling on the impact of extreme weather events on the long-term fiscal position as part of a climate change chapter in He Tirohanga Mokopuna 2021, the Treasury's combined Statement on the Long-term Fiscal Position and Long-term Insights Briefing.
Health system
Through 2021/22, the Treasury worked closely with interim health entities, the Transition Unit in DPMC and the Ministry of Health on a range of policy work to support the implementation of the health system reform with a particular focus on funding, governance and accountability, and capital system settings.
We also supported the development of an appropriate structure to house the disability support services. We worked with the Ministry of Social Development on the financial framework for the departmental agency with a focus on setting up financial arrangements that incentivise strong fiscal management and leverage existing public service capability. Through Budget 2022, we provided advice to the Minister of Finance to support his decisions in resourcing the new Ministry and its key work programmes for success and maximising value for money.
Housing
Over the course of 2021/22, we provided a range of advice to the Ministers of Finance and Housing covering various initiatives and supports, including amendments to and utilisation of the KiwiBuild programme, the Progressive Home Ownership Scheme and Loans and progressing phase one of the Aotearoa Homelessness Action Plan 2020-2023. We also provided advice on support for the construction sector, building sector reform and funding settings to better support first-home ownership.
In 2021/22, several new funds were established with the Treasury's input in relation to policy, scope and design, including the:
- Whai Kāinga Whai Oranga and the Māori Infrastructure Fund (over $730 million combined, funding commenced 20 October 2021)
- Affordable Housing Fund ($350 million, first funding round announced 19 May 2022)
- Infrastructure Acceleration Fund (over $1 billion, proposals received 20 August 2021, with negotiations for funding agreements under way).
The Treasury worked with Crown Infrastructure Partners Limited and the Ministry of Housing and Urban Development to substantially advance proposals for the first two infrastructure projects under the Infrastructure Funding and Financing Act 2020. Levy proposals for these projects, located in Tauranga and Wellington, are expected to be received by September 2022 and March 2023 respectively.
Resource Management Act reform
In 2021/22, the Treasury engaged with other agencies in developing advice to Ministers and participated in the Strategic Planning Act (SPA) Board. The Treasury brought an economic and system lens to advice and engagement on the resource management work programme, as the three Acts - the Natural and Built Environments Act, the SPA and the Climate Adaptation Act - will need to function as a coherent and interconnected system if they are to meet the Government's objectives.
Welfare reform
Through Budget 2022, the Government announced changes to the Working for Families tax credits scheme and associated supports in late 2021, meaning that an estimated 346,000 families will be better off by an average of $20 per week. We advised and supported Ministers through the development of these policies. A review of Working for Families is under way as part of the medium-term welfare overhaul programme, which addresses recommendations from the Welfare Expert Advisory Group. We continue to work closely with the Ministry of Social Development and Inland Revenue on this review.
Natural Hazards Insurance Bill
The Treasury led the policy work that resulted in the Natural Hazards Insurance Bill being introduced in May 2022. The Bill replaces the Earthquake Commission Act 1993 and changes the name of the Earthquake Commission to Toka Tū Ake - Natural Hazards Commission. The overarching objectives of the changes are to enable better community recovery from natural hazards, to clarify the role of the Commission and the cover provided by the Bill and to enhance the durability and flexibility of the legislation.
Supporting New Zealand urban growth and infrastructure
We have continued to work actively with lead agencies and provide advice to the Minister of Finance on a range of infrastructure projects, programmes and reforms.
Auckland Light Rail (ALR) project
In January 2022, the Government announced the preferred transport option of a partially tunnelled light rail for Auckland. Throughout the year, Te Tai Ōhanga engaged with other agencies in developing advice on the transport infrastructure and urban development system. We supported our Minister by engaging with the Establishment Unit and Establishment Unit Board on the development of an indicative business case on rapid transit. We also provided support to the Government and the Ministry of Transport on establishing the ALR Board, which will oversee the design and construction of ALR, including the development of a detailed business case.
Three Waters Reform Programme
In 2021/22 we advised the Minister of Finance on system stewardship policy issues regarding three waters reform, including: regulation, governance, and accountability. We also provided policy advice to Ministers to support the drafting of the Water Services Entities Bill, which establishes the new system for national water services and was introduced into Parliament in June 2022. The Bill sets out the ownership, governance, and accountability arrangements relating to the establishment of four water service entities, and includes provisions for ongoing public ownership and engagement. The Bill also provides for transitional arrangements relating to the establishment and governance of the new entities.
Securing the economic recovery
Beyond providing economic policy advice related to the COVID-19 pandemic, we have continued to provide advice to support the government in delivering on its wider economic strategy. As part of this work, we have supported an all-of-government approach through the Economic Chief Executives group, and have worked with other agencies to monitor progress on delivering key initiatives.
One of the biggest changes to our economic context over the last year has been inflation, caused by higher than expected demand, disruption to global supply chains, and the Russian invasion of Ukraine. Over 2021/22 the Treasury has collaborated with other agencies to advise on how best to respond to this, including advising on the range of measures the government has introduced to address cost of living pressures, including the Cost of Living Payment and measures to reduce transport costs.
The Treasury has continued to provide economic and fiscal advice, including advice on fiscal policy, the allowance framework, distributional consequences, implications for bond markets, wage bargaining, and more. Monitoring of the changing international and domestic economic context continues, and is regularly incorporated into policy advice, briefings, and published economic commentaries.
We have worked closely with Inland Revenue to advance the Government's Tax Policy Work Programme and provided advice on the Government's Revenue Strategy. We have also advised the Minister of Finance and Minister for Revenue on the OECD proposals for the taxation of multinational enterprises.
Monitoring Crown financial institutions
A key responsibility of the Treasury is to monitor Crown financial institutions. We support the Ministers' ownership interests in a portfolio of agencies and advise on policy and operational settings for the Crown financial institutions. These include agencies managing capital for Crown companies and agencies that represent some of the Crown's impact investing portfolio.
In 2021/22, we facilitated the design of the Crown Financial Institutions' Responsible Investment Framework. The framework conveys the Government's climate change expectations for the Crown's largest investment funds, covering the New Zealand Super Fund, Accident Compensation Corporation, Government Superannuation Fund and National Provident Fund. Referring to global best-practice investment standards and commitments of the Paris Agreement, the framework sets out transparent and consistent targets for the funds to measure, reduce and influence their transition to zero-carbon investment portfolios by 2050.
As well as monitoring our relevant agencies and advising Ministers on their performance, the Treasury advised Ministers on the institutional options for mobilising private capital to accelerate the transition to a low-emissions, climate-resilient economy. This work programme relates to one of our strategic priorities and will continue to be an area on which we advise Ministers.
With new legislation for the Reserve Bank of New Zealand (RBNZ) coming into force on 1 July 2022, the Treasury established a monitoring team that worked with RBNZ over the 2021/22 year along with the policy teams to facilitate RBNZ’s transition to its new accountability arrangements.
Agencies
- New Zealand Superannuation Fund (NZSF)
- Accident Compensation Corporation (ACC)
- Earthquake Commission (EQC)
- Government Superannuation Fund Authority (GSFA)
- National Provident Fund (NPF)
Impact investment agencies
- New Zealand Green Investment Finance Limited (NZGIF)
- New Zealand Growth Capital Partners (NZGCP), secondary to the Ministry of Business, Innovation and Employment
- Local Government Funding Agency (LGFA), Crown shareholding representative, secondary to the Department of Internal Affairs
- Tupu Tonu (Ngāpuhi Investment Funds Limited), secondary to Te Arawhiti
Fiscal Management and Reporting
Measure | Standard | Result |
---|---|---|
Financial Statements of the Government are produced without material error and within the statutory requirements in the Public Finance Act 1989. | Achieved | Achieved |
An unmodified audit opinion is issued by the Controller and Auditor-General on the Financial Statements of the Government. | Achieved | Achieved |
Budget documents are produced without material error and in accordance with the statutory requirements in the Public Finance Act 1989. | Achieved | Achieved |
Major fiscal models are quality assured (periodically), and where appropriate, assumptions are tested with suitably qualified experts. | Achieved | Achieved |
Delivering Budget 2022
Our commitment to embedding wellbeing in our work continued to be reflected in our production of Budget 2022, the Government's fourth Wellbeing Budget. The Treasury supported the Minister of Finance with setting out Budget priorities and wellbeing objectives in the Budget Policy Statement, which then guided the Government's Budget 2022 decisions.
This year, we strengthened our approach to assessing Budget initiatives through a stronger wellbeing and ‘value for money' focus and ensuring initiatives aligned with our key frameworks as well as with other production process improvements. This included revising the Cabinet financial recommendations process for the Budget, which created efficiency while also providing Ministers with a more user-friendly product to engage with at Cabinet.
Budget 2022 was one of the most complex Budgets in recent years, with the Treasury supporting:
- the reform of the health system through providing a multi-year package of funding
- further applications of the principles of He Ara Waiora and the LSF to select initiatives
- climate change response through the first allocation of funding from the multi-year Climate Emergency Response Fund (CERF)
- modernising the public finance system through piloting new agency cluster approaches.
The cluster approach saw us bring together - for planning, budgeting and reporting purposes - agencies with related areas of responsibility. This approach was piloted with the Justice and Natural Resources sectors through Budget 2022 - supporting inter-agency collaboration and helping Ministers to collectively direct spending, make trade-offs across related areas and support medium-term planning.
Publishing the Financial Statements of the Government and the Economic and Fiscal Updates
The Treasury delivered the Financial Statements of the Government for the year ended 30 June 2021 with an unmodified audit opinion. The Financial Statements were completed and provided to the Office of the Auditor-General, as required by the Public Finance Act 1989, and received a clear audit opinion on 30 September 2021. This was a significant achievement given the Government's continued response to the COVID-19 pandemic and the complexities that this added to the Financial Statements.
In December 2021, we published the economic, tax and fiscal forecasts (the Half Year Economic and Fiscal Update), followed by the Budget Economic and Fiscal Update in May 2022. These forecasts highlighted the challenges faced by the country from COVID-19 to New Zealand’s economic and fiscal outlook. While New Zealand’s economy and fiscal position have proven resilient in the pandemic, challenges remain – particularly with inflation, supply constraints and a global economic slowdown.
Advising on new fiscal targets
In 2021/22, the Treasury reviewed the indicators that are commonly used for setting fiscal strategy targets in New Zealand and advised the Government to adopt a new net debt indicator to broaden the coverage of assets and liabilities. The review considered the appropriateness of the Government’s suite of fiscal indicators, primarily focused on the headline operating and debt indicators that are used to communicate the fiscal strategy.
The Treasury also advised the Government on setting new fiscal rules, which were implemented in Budget 2022. The Treasury's advice aimed to balance fiscal sustainability with economic stability. This will ensure debt is kept at prudent levels while also providing headroom to respond to shocks and therefore support monetary policy. As the main fiscal rule, the Government is targeting the Operating Balance Position Before Gains and Losses (OBEGAL), and focusing on achieving a small operating surplus over time (averaging in the range of 0-2% of GDP). The Government has also implemented a net debt ceiling of 30% of GDP (based on the new net debt indicator) to complement the OBEGAL target. This new net debt ceiling will allow more fiscal space to fund high-quality capital investments that improve productivity and lift living standards.
Delivering He Tirohanga Mokopuna: the Long‑term Fiscal Statement
He Tirohanga Mokopuna, the Treasury's combined Statement on the Long-term Fiscal Position and Long-term Insights Briefing, was published in September 2021. The Statement is a requirement under the Public Finance Act, which requires the Treasury to use its best professional judgement about the risks and outlooks for New Zealand’s fiscal position over the next 40 years. The Long-term Insights Briefing, a new requirement under the Public Service Act, looks at the medium- to long-term trends, risks, and opportunities to New Zealand.
The Statement reaffirmed the Treasury's view that current debt levels are prudent. Though the fiscal response to the COVID-19 pandemic has caused net debt to increase significantly, there are high benefits for spending that offset on the worst aspects of the crisis and avoid long-term economic scarring. It is appropriate that debt should fund spending where, across generations, the benefits in wellbeing exceed the costs of that spending.
However, projections in the Statement show net debt is likely to be on an unsustainable trajectory if expenditure and revenue follow historical trends. As they have in the past, Governments will need to make important decisions and trade-offs to maintain fiscal sustainability so they can continue to pay for the services and transfers they provide, respond to shocks, and ensure future generations are not unfairly burdened through higher taxes or reduced Government services.
For the first time, the Statement also included projections of some of the fiscal impacts of climate change. Modelling suggests that more frequent and severe droughts and storms over the next 40 years could lead to net debt being around 4% of GDP higher, with larger effects possible.
Publishing He Puna Hao Pātiki: Investment Statement 2022
He Puna Hao Pātiki: 2022 Investment Statement - another stewardship document required under the Public Finance Act 1989 - assessed the state and composition of the Crown's major assets and liabilities:
- The strength of the Government's balance sheet prior to the COVID-19 pandemic provided the Government with options on how it responded to the pandemic, including the ability to provide significant support to businesses and households. The fiscal response has complemented the health response in conjunction with monetary policy and a broader economic and social response.
- The effects of COVID-19 have resulted in significant changes to the scale, composition and complexity of the Government's balance sheet, including a significant increase in net core Crown debt (net debt), changes to the composition of the balance sheet using monetary policy tools and new assets and liabilities on the balance sheet such as the Business Finance Guarantee Scheme.
- The Treasury's assessment is that the balance sheet remains resilient. Our assessment is also supported by the modelling and scenario analysis in the 2021 Long-term Fiscal Statement and by external assessments such as credit ratings.
The statement also discussed the increasing importance of efficient and effective balance sheet management. While the Crown balance sheet is relatively well managed, there are opportunities to improve performance. He Puna Hao Pātiki: Investment Statement 2022 highlighted potential benefits from improving the measurement of balance sheet risk, more consistent use of investment disciplines, active management of assets and liabilities and developing options to preserve balance sheet resilience.
Investment Management and Asset Performance
Measure | Standard | Result |
---|---|---|
The capability and performance of investment-intensive agencies is enhanced by The Treasury's stewardship of the investment management system. | Achieved | Achieved |
Owning the right assets, managing them well, funding them sustainably and managing risks to the Crown balance sheet are all critical to the ongoing provision of high-quality and cost-effective public services that New Zealanders value. This means that the quality of investment management is vital to maintaining New Zealanders’ living standards now and in the future. The Treasury leads the Government’s investment management system. This includes working with other public sector agencies to ensure that the stewardship of public funds is robust and transparent.
In 2021/22, we convened the Investment Panel, made up of investment management system leaders, to bring specialist lenses to supporting the assessment of significant investments in the Government's Budget 2022. We also began providing quarterly investment reporting to support the Government's decision making through providing visibility of medium and high-risk investments in planning and delivery.
The Treasury completed 55 Gateway Reviews in 2021/22. These are an investment assurance process for ensuring the Government's riskiest projects receive high-quality independent peer review at critical stages in the investment's lifecycle.
Export Credit
Measure | Standard | Result |
---|---|---|
The internationalisation of New Zealand exporters are promoted and supported through the provision of guarantees and insurances to support exporters when commercial markets cannot assist. | Achieved | Achieved |
Collaboration with stakeholders to educate and increase the capability of exporters in terms of their understanding of trade finance. | Achieved | Achieved |
The Treasury is responsible for providing Crown-backed trade credit insurance and financial guarantees for the purpose of supporting exports and the internationalisation of exporters. This support is provided where private sector banks and insurers are unwilling or unable to provide cover.
In 2021/22, supporting the Government's trade-led recovery, a total of $238 million risk exposure was underwritten by New Zealand Export Credit (NZEC). While no claims were received or paid during the year, our support provided confidence and enabled the financing for 59 exporters to deliver a historical high of $610 million of goods and services into 51 countries.
The Treasury also:
- obtained the Minister of Finance's approval to increase our level of ambition to support a wider range of exporters through adjustments to credit information requirements and processes
- streamlined our due diligence process for our trade credit insurance, with targeted support for SME exporters
- reached over $4 billion worth of exports supported and over 1,000 policies issued since inception.
Crown Lending and Bank Accounts
In 2021/22, the Treasury continued to provide consolidated management of agency bank accounts, enabling efficient liquidity management of the Crown's cash position.
Measure | Standard | Result |
---|---|---|
Crown departments are able to conduct banking transactions, with no Crown bank accounts opened outside of this policy and visibility of the total cash position of the Crown is maintained. | Achieved | Achieved |
Administration of Guarantees and Indemnities Given by the Crown PLA#
The Treasury budgeted $3.110m / The Treasury spent $0.731m
This appropriation is intended to achieve efficient and effective administration of the Crown's Guarantees and Indemnities, including the Wholesale and Retail Deposit Guarantee Schemes.
Measure | Standard | Result |
---|---|---|
Validated and approved payments of claims under the Business Finance Guarantee Scheme are made within agreed timeframes. | Achieved | Achieved |
A register of Crown guarantees and indemnities is maintained as an accurate record throughout the financial year. | Achieved | Achieved |
The Business Finance Guarantee Scheme
In 2019/20, as part of the COVID-19 response, the Government launched the Business Finance Guarantee Scheme (BFGS). The BFGS helped banks, non-bank deposit takers and non-deposit-taking lenders to provide loans to businesses for cash flow, capital assets and projects related to, responding to or recovering from the impact of COVID-19. The Treasury is responsible for the administration of the BFGS.
As at 30 June 2022, the total approved exposure (TAE) was $2.456 billion (down from $2.861 billion as at 30 June 2021), supporting the loans of 3,853 businesses. This reflects a 14% reduction in TAE since the scheme availability period concluded on 30 June 2021. Supported lending will continue to decrease gradually as supported loans are repaid.
The Treasury commissioned an interim review with Business and Economic Research Limited (BERL) on the effectiveness and ongoing operations of the BFGS. The report acknowledged that the BFGS achieved its objective of facilitating the provision of credit to cushion the impact of COVID-19 on otherwise viable SMEs facing temporary financial distress by providing lenders with additional confidence. It also noted how changes made to the scheme significantly contributed to an uptake in utilisation. Furthermore, the evaluation also identified areas in which the process to establish the BFGS could have been improved, including an earlier onboarding of Non Deposit Taking Lenders, the timing of the roll-out and communication with lenders and the public. These findings will help inform possible future schemes as appropriate.
Total claims paid
$0.3m
as at 30 June 2022
Administration of Crown Borrowing, Securities, Derivative Transactions, and Investment PLA#
The Treasury budgeted $12.625m / The Treasury spent $10.771m
This appropriation is intended to ensure the government has access to a sustainable and cost-effective source of debt funding for the provision of public services to New Zealanders.
Measure | Standard | Result |
---|---|---|
The Crown's debt funding needs are met through execution of the Minister of Finance approved annual NZGB programme and associated funding strategy. The financing task is met in a cost-effective manner with associated risks managed in accordance with the Portfolio Management Policy. | Achieved | Achieved |
Debt Management
Te Tai Ōhanga plays a key role in funding the Crown's borrowing requirements and maintaining well-functioning debt-funding markets. Our focus is to minimise the Crown's borrowing costs over the long term, with due consideration given to risk, and to ensure ongoing access to debt funding markets. We are also responsible for managing the Crown's liquidity position. All activities are guided by three core principles: to be transparent; to be consistent; and to be even-handed. The Treasury takes a strategic approach to debt funding and risk management to ensure debt is managed in a way that is consistent with the Government's fiscal strategy and the needs of the Crown's balance sheet. In parallel, the approach considers market demand and ensures that interactions with financial market participants are well considered and coordinated.
Issuance
Crown borrowing occurs through the regular issuance of New Zealand Government Securities throughout the year. Securities are generally issued via weekly tender – an online auction where registered primary market investors bid to buy government bonds.
In 2021/22, a total of $19.96 billion of New Zealand Government Bonds (NZGB) were issued, including nominal and inflation-indexed bonds (IIBs). The Treasury also:
- extended the maturity of the NZGB portfolio by issuing an inaugural 30-year NZGB
- issued $3 billion of new bonds (2051) via syndication
- implemented a new single-price IIB tender mechanism as well as a more flexible approach to IIB issuance
- received approval from the Minister of Finance for a new liquidity buffer of $15 billion
- supported all Crown cash flow requirements
- commenced work on a New Zealand Sovereign Green Bond Programme Framework and preparations for an inaugural issuance in late 2022
- conducted 41 one-on-one virtual investor engagements across 21 cities as well as speaking to investors at two industry conferences
- maintained ongoing engagement with our eight Registered Tender Counterparties who participate in our tenders and support the NZGB market.
Average bond tender yields for 2021/22 were below secondary mid-market yields by 0.79 basis points.
In May 2022, New Zealand Debt Management was awarded a Kanganews Award for the New Zealand Dollar Rates Bond Deal of the Year – 2021 for the issue of its NZGB 2051 maturity bond.
Credit ratings
Credit ratings are an important support for investor confidence. While it is important that ratings are provided by agencies with independence, the Treasury facilitates accurate two-way information sharing with relevant agencies. As well as timely information sharing throughout the year, we coordinated virtual credit rating agency visits with two of the three major global rating agencies. New Zealand continues to be among the world’s highest-rated sovereigns.
Domestic currency ratings
AAA: S&P Global Ratings
AAA: Moody’s Investors Service
AA+: Fitch Ratings
Liquidity Management
Sound liquidity management is critical to an effective debt management programme. The Crown must always have enough cash available to make payments and fund maturing bonds when due. Throughout 2021/22, we maintained compliance with all liquidity metrics. At the Half Year Economic and Fiscal Update in December, we communicated our updated approach to liquidity management, including our revised $15 billion liquidity safeguard. The Treasury also signalled that we would be managing down our relatively high levels of liquidity to this new updated level, given that most of the uncertainty relating to the impacts of the COVID-19 pandemic have abated.
Corporate Treasury Services
The Treasury provides risk-management services to government departments and other Crown agencies to help them manage and hedge financial market risks, as well as administering on lending activities for the Crown. The total transaction volumes administered by 2021/22 included:
Outright FX | Interest rate swaps | Crown lending | |
---|---|---|---|
Transactions | 1,230 | 48 | 51 |
$NZD | $1,448m | $3,460m | $1,346m |
Assurance and Oversight
The Capital Markets Advisory Committee provides independent perspectives and advice to Te Tai Ōhanga. The committee offers challenge and feedback on decisions and initiatives that affect debt management, export credit and Treasury services' outcomes.
This includes:
- strategy and prioritisation
- business performance
- strategic and business risk management
- control and compliance functions
- an assurance framework.
Current New Zealand Government Bond portfolio as at 30 June 2022
New Zealand Government Bonds
Crown Company Monitoring Advice#
The Treasury budgeted $7.192m / The Treasury spent $5.968m
The single overarching purpose of this appropriation is to provide advice to shareholding or responsible Ministers to improve performance of companies that the Crown has the shareholding in and some Crown entities in order to improve the wellbeing of New Zealanders.
Category | Measure | Standard | Result |
---|---|---|---|
Crown company monitoring advice to the Minister for State Owned Enterprises and other responsible Ministers. | Papers with a score of 3 or more | 80% | 86% |
Papers with a score of 4 or more | 20% | 24% | |
Average score of assessed papers | 3.5 | 3.4 | |
Crown company monitoring advice to the Minister of Research, Science and Innovation.[4] | Papers with a score of 3 or more | 80% | N/A |
Papers with a score of 4 or more | 20% | N/A | |
Average score of assessed papers | 3.5 | N/A |
Supporting and Advising on Crown-Owned Commercial Entities and Designated Crown Entities
Our Commercial and Institutional Performance teams are a centre of commercial and organisational expertise within the Treasury and a steward for best-practice monitoring across the central state sector. The Treasury provides ownership and investment advice to shareholding and responsible Ministers on 35 Crown-owned commercial entities. These entities have either principally commercial objectives or a mixture of policy and commercial objectives.
As a shareholder, the Crown can take a long-term perspective for these companies and entities, which are highly diverse and include interests in strategic and infrastructure assets in the transport, electricity and services sectors. As the wholly owned entities are not assessed by the market to the same extent as listed companies, the Treasury seeks to assess entities' performance with similar rigour. Our Performance Assessment Framework uses evidence-based analysis to support transparency and accountability in publicly owned entities and informs our advice to Ministers on entity performance. During the year, we continued to refine the evidence and analysis used through our Performance Assessment Framework.
Our focus on continually improving the quality of our commercial advice has included providing feedback to authors of our commercial advice papers. We propose to carry out sessions in the first half of 2022/23 providing refreshers on the quality of policy advice processes and the trends over time in our quality of advice results. These sessions will be delivered by an external expert in evaluating policy advice. Our monitoring activities relating to the portfolio of the Minister of Research, Science and Innovation generally occur through second opinion and review of advice prepared by the primary monitor (the Ministry of Business, Innovation and Employment). We did not prepare any direct advice to the Minister of Research, Science and Innovation in this reporting period.
In 2021/22, we worked with Air New Zealand and external advisors to consider and finalise the nature of the Crown’s involvement, as the majority shareholder, in Air New Zealand’s capital raise. This included the establishment of a $1,000 million redeemable shares facility prior to the launch of the capital raise, the Crown’s contribution of $602 million in equity to Air New Zealand as part of the capital raise to maintain the Crown’s majority shareholding and the full repayment by Air New Zealand, and subsequent cancellation, of a separate Crown standby loan facility, which had supported Air New Zealand since the onset of the COVID-19 pandemic in early 2020.
We supported the Ministry for Culture and Heritage as it developed its Strong Public Media programme's business case to assess the viability of creating a new, fit-for-purpose, public media entity and the associated disestablishment of Radio New Zealand Limited (RNZ) and Television New Zealand Limited (TVNZ). The Treasury advised the shareholding Ministers of RNZ and TVNZ on ownership impacts, including entity form and funding options and implications.
In 2021/22, we worked to promote public understanding and accountability about Crown companies and our work with them. Each year, we proactively release Ministers' letters of expectations to Crown companies. This year, we also proactively released our advice and other information about significant matters, including KiwiRail's purchase of two new Cook Strait ferries, the Independent Review into Landcorp Farming Limited and the provision of Crown financial support to Airways Corporation of New Zealand in light of COVID-19 impacts.
Advising on Board Appointments
The Treasury provides advice to shareholding Ministers on director appointments for 43 Crown boards. This includes assessments of the specific skillsets required to procure directors that cater to the needs of each entity board while balancing the Government's objectives regarding Crown board diversity. In 2021/2022, we made 118 appointments across commercial and financial entities. These included 47 new appointments, 66 reappointments and five elevations to the boards of SOEs, Crown entity companies, Public Finance Act 1989 Schedule 4A companies and Crown entities. The Treasury supported the Government to promote greater diversity in board participation, particularly in relation to increasing the number of women in these roles. Of the 47 appointments, 25 were female (53%) and 22 were male (47%). This compares with 56 appointments made in 2020/2021 with 26 females (46.4%) and 30 males (53.6%).
We supported significant improvements in gender representation across SOEs, with women making up 47% of directors (up from 38.2% in 2015). The ethnicity identified across our boards for this financial year is 78% Pākehā, 14% Māori, 5% British Irish, 5% Other Ethnicity, 3% Pacifica, 2% Indian, 2% Chinese and 1% Australian.
Our appointments operating model was reviewed, our Board capability framework is being refreshed and other recommendations are being implemented. We will continue to work to close the gender gap and to increase ethnic diversity and board capability across entities in the coming years.
Gender diversity in board appointments
Southern Response Earthquake Services Independent Oversight Committee#
The Treasury budgeted $133,000 / The Treasury spent $108,000
This appropriation is intended to achieve independent oversight and advice on the implementation and delivery of a Southern Response proactive settlement package for former AMI policyholders who cash settled for earthquake damage before 1 October 2014.
Measure | Standard | Result |
---|---|---|
The Board's decisions on implementing the packages are informed by regular reports on progress and recommendations from the Oversight Committee. | Achieved | Achieved |
The Treasury played a key role in the establishment of an Independent Oversight Committee for a specific Crown initiative involving Southern Response. The committee comprises four members of high standing in their fields who together have the specific set of experience and skills sought by Ministers for overseeing Southern Response's implementation and delivery of the Crown's proactive earthquake settlement package. This package was announced by the Government in December 2020. It is to provide eligible Allied Mutual Insurance (AMI) policyholders who cash-settled their insurance claims for earthquake damage prior to October 2014 with an additional payment in order to address some specific issues that have been identified for those policyholders relative to those who cash-settled later. The package has taken longer than originally anticipated to be implemented due to ongoing litigation, including the Ross class action. Following the discontinuance of the Ross class action in December 2021, Southern Response has been delivering the package in line with the principles on which the package is based.
Shared Support Services#
The Treasury budgeted $12.000m / The Treasury spent $11.904m
This appropriation is intended to achieve quality, efficient support services for other agencies.
Measure | Standard | Result |
---|---|---|
Services meet the standards and timeframes agreed with other agencies. | Achieved | Achieved |
A range of our functions and teams have been purpose-built to meet the needs of the small agencies at the centre of government, solving problems and leveraging opportunities in corporate support services. We aim to provide services that are integrated, innovative and customer-centric and that optimise processes. Throughout the year, we:
- enabled access to, and the availability of, shared services at or above expected service levels
- delivered quality finance, payroll, information management and information technology services in a timely manner
- enhanced IT infrastructure, tools and business processes to continue to successfully support the flexible and remote working practices of our customers
- enabled the government departments to which we provide financial management information systems to be capable of receiving e-invoices
- implemented an asset management solution for Government House
- implemented a new learning management system, which is shared between the Treasury, DPMC and the National Emergency Management Agency
- migrated a range of IT services to cloud-based applications and enhanced IT security
- successfully migrated the first websites as part of a multi‑year project to implement a new version of the content management system
- advised and supported the National Emergency Management Agency with introducing 24 x 7 work practices
- supported the transition of people from DPMC to the new health agencies
- became a party to a new all-of-government contract with the provider of the software for our financial management and payroll services, which will provide the opportunity for further automation and business process efficiencies.
Agency Supported | Department of the Prime Minister And Cabinet |
Public Services Commission | Serious Fraud Office |
Ministry for Women |
Ministry of Culture and Heritage |
Creative New Zealand | Human Rights Commission | Climate Change Commission |
---|---|---|---|---|---|---|---|---|
Finance | ||||||||
Strategy & Advice* | ✔ | |||||||
Transaction Processing | ✔ | ✔ | ✔ | |||||
Finance System | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | ✔ | |
Human Resources | ||||||||
Strategy & Advice* | ✔ | |||||||
HR Services | ✔ | ✔ | ||||||
Payroll System | ✔ | ✔ | ✔ | |||||
Information and Technology | ||||||||
Strategy & Advice* | ✔ | |||||||
Systems & Infrastructure | ✔ | |||||||
Helpdesk & Support | ✔ | |||||||
Programme Management | ✔ | |||||||
Information Management | ✔ | |||||||
Information Services | ✔ | ✔ | ✔ |
* Strategy services includes the roles of Chief Financial Officer, Chief Information Officer and Chief People Officer.
Notes
- [2]Policy Advice and Financial Services is a multi-year, multi-category appropriation (MY MCA) that we introduced in 2019/20, covering the period 2019/2020 to 2023/2024.
- [3]Measures relating to the quality of policy advice papers have been assessed based on the first three quarters of 2021/22.
- [4]The Treasury provides second-opinion advice to the Minister of Research, Science and Innovation. The Ministry of Business, Innovation and Employment provides first‑opinion advice. It is not possible to assess this measure as the Treasury's Commercial and Institutional Performance teams did not provide any direct reports to the Minister of Research, Science and Innovation in 2021/22.
SECTION THREE - Wāhanga Tuatoru | He Pūrongo Pārongo Ahumoni | Reporting on Financial Information#
Appropriation Statements#
Statement of Budgeted and Actual Expenses and Capital Expenditure Incurred Against Appropriations
for the year ended 30 June 2022
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
Location of End-of-year Performance Information | |
---|---|---|---|---|---|
Vote Finance | |||||
Departmental Output Expenses | |||||
10,367 | Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA | 10,771 | 12,625 | 12,625 | Section Two |
1,507 | Administration of Guarantees and Indemnities Given by the Crown PLA | 731 | 3,110 | 3,110 | Section Two |
59 | Design and Establishment of the Christchurch Regeneration Acceleration Facility | 12 | - | 12 | Section Three |
49 | Infrastructure Funding and Financing | - | - | - | n/a |
9,626 | Shared Support Services | 11,904 | 10,460 | 12,000 | Section Two |
67 | Southern Response Earthquake Services Independent Oversight Committee | 108 | 200 | 133 | Section Two |
21,675 | Total Departmental Output Expenses | 23,526 | 26,395 | 27,880 | |
Departmental Other Expenses | |||||
- | Software as a Service intangible asset derecognition (write-off) | 913 | - | 970 | Section Three |
- | Total Departmental Other Expenses | 913 | - | 970 | |
Capital Injections | |||||
- | The Treasury - Capital Injection | 603 | - | 603 | n/a |
- | Total Capital Injections | 603 | - | 603 | |
Departmental Capital Expenditure | |||||
3,058 | The Treasury - Capital Expenditure PLA | 1,910 | 5,985 | 5,985 | Section Three |
3,058 | Total Departmental Capital Expenditure | 1,910 | 5,985 | 5,985 | |
Non-Departmental Output Expenses | |||||
13,488 | Independent Infrastructure Advice and Oversight | 14,875 | 14,875 | 14,875 | New Zealand Infrastructure Commission Annual Report |
5,030 | Inquiries and Research into Productivity-related Matters | 5,930 | 5,930 | 5,930 | New Zealand Productivity Commission Annual Report |
10,828 | Management of Anchor Projects by Ōtākaro Limited | 13,088 | 20,000 | 34,490 | Ōtākaro Limited Annual Report |
452 | Management of the New Zealand Superannuation Fund | 486 | 728 | 728 | Exempt |
29,798 | Total Non-Departmental Output Expenses | 34,379 | 41,533 | 56,023 | |
Non-Departmental Borrowing Expenses | |||||
3,147,611 | Debt Servicing PLA | 4,012,174 | 3,154,380 | 4,004,672 | Exempt |
3,147,611 | Total Non-Departmental Borrowing Expenses | 4,012,174 | 3,154,380 | 4,004,672 | |
Non-Departmental Other Expenses | |||||
2,749 | Carrying Value of Future Liabilities | 2,490 | 3,000 | 3,000 | Exempt |
8,180 | Christchurch Regeneration Acceleration Facility | 49,451 | 120,000 | 188,007 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
5 | Government Superannuation Appeals Board | 1 | 50 | 50 | Exempt |
67,060 | Government Superannuation Fund Authority: Crown's Share of Expenses PLA | 73,592 | 43,465 | 60,126 | Exempt |
450,413 | Government Superannuation Fund Unfunded Liability PLA | 566,804 | 387,981 | 458,848 | Exempt |
72,461 | Impairment of Investment in Southern Response Earthquake Services Limited | - | - | - | n/a |
2,000 | National Provident Fund Schemes - Liability Under Crown Guarantee PLA | 3,000 | 2,000 | 2,000 | Exempt |
3,788 | Payment in Respect of Export Credit Office Guarantees and Indemnities PLA | 416 | - | - | n/a |
3,157,279 | Payments and Expenses in Respect of Guarantees and Indemnities PLA | 5,702,107 | 93 | 2,032,859 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
35 | Stewardship of Residual Crown Obligations | 53 | 711 | 711 | Exempt |
36 | Unclaimed Money PLA | 145 | 30 | 30 | Exempt |
- | Unwind of Discount Rate Used in the Present Value Calculation of Payment for Shares in International Financial Institutions PLA | - | 73 | 73 | Exempt |
3,764,006 | Total Non-Departmental Other Expenses | 6,398,059 | 557,403 | 2,745,704 | |
Non-Departmental Capital Expenditure | |||||
- | COVID-19: Capital Injections to Airways New Zealand | 47,000 | 50,000 | 75,000 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
130,000 | Earthquake Commission Natural Disaster Fund Deficiency - Advances PLA | - | - | - | n/a |
30,199 | International Financial Institutions PLA | 2,497,089 | 27,900 | 27,900 | Exempt |
2,120,000 | New Zealand Superannuation Fund - Contributions | 2,420,000 | 2,420,000 | 2,420,000 | New Zealand Superannuation Fund Annual Report |
141,434 | Refinancing of Kāinga Ora - Homes and Communities and Housing New Zealand Limited Debt | 217,361 | 217,387 | 217,687 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
72,461 | Southern Response Earthquake Services Limited: Equity Investment | - | - | - | n/a |
60,000 | Tāmaki Regeneration Company Limited - Equity Injection | 50,000 | 25,000 | 96,000 | Exempt |
3,136 | Transfer of Anchor Projects to Ōtākaro Limited | 4,704 | - | 46,864 | Exempt |
2,557,230 | Total Non-Departmental Capital Expenditure | 5,236,154 | 2,740,287 | 2,883,451 | |
Multi-Category Expenses and Capital Expenditure | |||||
Crown Company Monitoring Advice MCA | |||||
Departmental Output Expenses | |||||
4,770 | Crown Company Monitoring Advice to the Minister for State Owned Enterprises and Other Responsible Ministers | 5,820 | 4,963 | 7,104 | Section Two |
131 | Crown Company Monitoring Advice to the Minister of Research, Science and Innovation | 148 | 88 | 88 | Section Two |
4,901 | Total Crown Company Monitoring Advice MCA | 5,968 | 5,051 | 7,192 | |
Greater Christchurch Anchor Projects MCA | |||||
Non-Departmental Other Expenses | |||||
- | Christchurch Bus Interchange and Associated Transport Infrastructure - Operating | - | 100 | - | Ōtākaro Limited Annual Report |
7,451 | Christchurch Convention Centre - Operating | 4,080 | 17,400 | 18,968 | Ōtākaro Limited Annual Report |
- | Christchurch Stadium - Operating | - | 165 | - | Ōtākaro Limited Annual Report |
- | Financial Impact of Valuations | - | 100 | - | Exempt |
- | Leasing Anchor Project Land | - | 100 | - | Exempt |
- | Metro Sports Facility - Operating | - | 120,000 | 163,000 | Ōtākaro Limited Annual Report |
1,424 | Pre-development Holding Costs - Operating | - | 4,000 | 4,118 | Ōtākaro Limited Annual Report |
4,052 | Procurement of Land and Assets - Operating | 2,320 | 12,000 | 13,516 | Ōtākaro Limited Annual Report |
1,052 | Public Space - Operating | 4,032 | 11,000 | 17,945 | Ōtākaro Limited Annual Report |
- | Sale of Land | - | 100 | - | Exempt |
Non-Departmental Capital Expenditure | |||||
- | Christchurch Bus Interchange and Associated Transport Infrastructure - Capital | - | 100 | - | Ōtākaro Limited Annual Report |
29,226 | Christchurch Convention Centre - Capital | 32,194 | 17,000 | 36,409 | Ōtākaro Limited Annual Report |
- | Land and Asset Acquisition - Capital | - | 100 | - | Ōtākaro Limited Annual Report |
21,828 | Metro Sports Facility - Capital | 26,650 | 60,000 | 62,185 | Ōtākaro Limited Annual Report |
1,052 | Public Space - Capital | 757 | 5,000 | 5,169 | Ōtākaro Limited Annual Report |
66,085 | Total Greater Christchurch Anchor Projects MCA | 70,033 | 247,165 | 321,310 | |
Management of Landcorp Protected Land Agreement MCA |
|||||
Non-Departmental Other Expenses | |||||
320 | Operating Costs | 17 | 1,658 | 1,658 | Section Three |
Non-Departmental Capital Expenditure | |||||
- | Capital Investments | 1,091 | 1,500 | 1,500 | Section Three |
320 | Total Management of Landcorp Protected Land Agreement MCA | 1,108 | 3,158 | 3,158 | |
Management of New Zealand House, London MCA | |||||
Non-Departmental Output Expenses | |||||
- | Property Management | - | 1,000 | 3,000 | Section Three |
Non-Departmental Other Expenses | |||||
8,130 | Operational Costs | 8,024 | 11,214 | 20,647 | Section Three |
68 | Renegotiation of Lease Arrangements | 108 | - | 432 | Section Three |
Non-Departmental Capital Expenditure | |||||
- | Capital Expenditure | - | 750 | 1,500 | Section Three |
8,198 | Total Management of New Zealand House, London MCA | 8,132 | 12,964 | 25,579 | |
Management of the Crown's Agreement with Taitokerau Forests Limited MCA | |||||
Non-Departmental Other Expenses | |||||
192 | Impairment of Loans | - | - | - | n/a |
192 | Total Management of the Crown's Agreement with Taitokerau Forests Limited MCA | - | - | - | |
Greater Christchurch Regeneration MCA | |||||
Non-Departmental Other Expenses | |||||
- | Greater Christchurch Regeneration - Operating | - | - | 6,973 | Section Three |
Non-Departmental Capital Expenditure | |||||
- | Greater Christchurch Regeneration - Capital | - | - | 2,000 | Section Three |
- | Total Greater Christchurch Regeneration MCA | - | - | 8,973 | |
79,696 | Total Multi-Category Expenses and Capital Expenditure | 85,241 | 268,338 | 366,212 | |
9,603,074 | Total Annual Appropriations and Permanent Appropriations | 15,792,959 | 6,794,321 | 10,091,500 | |
1,034,892 | Shovel Ready Project Funding - Crown Infrastructure Partners (MYA) | - | 208,672 | 239,191 | Crown Infrastructure Partners Annual Report |
137,145 | Shovel Ready Project Funding - Ōtākaro Limited (MYA) | 66 | 17,705 | 67 | Ōtākaro Limited Annual Report |
350,000 | COVID-19: Loans to Air New Zealand (MYA) | 500,000 | 1,150,000 | 500,000 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
10,500 | Crown Infrastructure Partners Limited - Equity Injection (MYA) | 4,600 | 37,509 | 5,633 | Exempt |
40,000 | New Zealand Green Investment Finance Limited - Equity Injections for Capital Investments (MYA) | 150,000 | 200,000 | 220,000 | New Zealand Green Investment Finance Annual Report |
7,940 | New Zealand Green Investment Finance Limited - Equity Injections for Operating Expenditure (MYA) | 5,420 | 6,000 | 6,000 | New Zealand Green Investment Finance Annual Report |
8,867 | Participation in Dividend Reinvestment Plans by the Mixed Ownership Model Companies (MYA) | 48,589 | 12,347 | 71,346 | Exempt |
23,404 | Venture Capital Fund (MYA) | 57,147 | 40,080 | 57,106 | Reported in the Minister of Finance's Report on Non-Departmental Appropriations |
- | Subscription for Non-Voting Redeemable Shares in Air New Zealand | 600,000 | - | 1,000,000 | Exempt |
- | Subscription for Ordinary Shares in Air New Zealand | 601,583 | - | 602,000 | Exempt |
1,612,748 | Total Multi-Year Appropriations | 1,967,405 | 1,672,313 | 2,701,343 | |
11,215,822 | Total Annual Appropriations, Permanent Appropriations, and Multi-Year Appropriations | 17,760,364 | 8,466,634 | 12,792,843 | |
Earthquake Commission - On-sold Canterbury Properties MY MCA | |||||
Non-Departmental Output Expenses | |||||
20,552 | Claims Handling and Other Administrative Costs (MYA) | 14,175 | 9,060 | 8,295 | Earthquake Commission Annual Report |
Non-Departmental Other Expenses | |||||
62,077 | Repair of Canterbury Properties (MYA) | 147,723 | 44,000 | 105,110 | Earthquake Commission Annual Report |
82,629 | Total Earthquake Commission - On-sold Canterbury Properties MY MCA | 161,898 | 53,060 | 113,405 | |
Policy Advice and Financial Services MY MCA | |||||
Departmental Output Expenses | |||||
249 | Crown Lending and Bank Accounts (MYA) | 209 | 449 | 449 | Section Two |
2,345 | Export Credit (MYA) | 2,251 | 2,077 | 2,077 | Section Two |
6,536 | Fiscal Management and Reporting (MYA) | 5,748 | 9,920 | 9,920 | Section Two |
4,479 | Investment Management and Asset Performance (MYA) | 5,759 | 7,189 | 8,189 | Section Two |
68,349 | Policy Advice (MYA) | 65,342 | 58,746 | 69,696 | Section Two |
81,958 | Total Policy Advice and Financial Services MY MCA | 79,309 | 78,381 | 90,331 | |
11,380,409 | Total Annual Appropriations, Permanent Appropriations, Multi-Year, and Multi-Year Multi-Category Appropriations | 18,001,571 | 8,598,075 | 12,996,579 |
Statement of Expenses and Capital Expenditure Incurred Without, or in Excess of, Appropriation or Other Authority
for the year ended 30 June 2022
Expenses and capital expenditure incurred without appropriation or outside scope or period of appropriation
Nil. (2021: Nil)
Expenses and capital expenditure incurred in excess of appropriation
Participation in Dividend Reinvestment Plans by the Mixed Ownership Model Companies MYA
Meridian Energy Limited's dividend reinvestment plan resulted in the Crown receiving new shares worth $33 million on 15 October 2021. However, the appropriation authority available at the time was only $21.3 million, which meant that $11.7 million of the investment was unappropriated expenditure. The appropriation was subsequently increased at the March baseline update, refer to page 66, for further information. (2021: Nil)
Statement of Capital Injections
for the year ended 30 June 2022
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
|
---|---|---|---|---|
- | Capital contributions | 603 | - | 603 |
Financial and Performance Reporting Against Appropriations#
The Treasury is responsible for achieving measures relating to:
- five departmental annual output expense appropriations
- one departmental annual other expense appropriation
- one departmental annual capital expenditure appropriation
- one departmental MCA administered by the Treasury
- one departmental multi-year multi-category appropriation (MY MCA), and
- three non-departmental MCAs administered by the Treasury.
Performance information for the above appropriations is reported in either section two or three of the Treasury Annual Report with all financial information reported in section three.
Departmental Appropriations
Administration of Crown Borrowing, Securities, Derivative Transactions, and Investment PLA
What is intended to be achieved with this appropriation
This appropriation is intended to ensure the government has access to a sustainable and cost-effective source of debt funding for the provision of public services to New Zealanders.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
10,367 | Expenses | 10,771 | 12,625 | 12,625 | 12,625 |
Funded by: | |||||
12,620 | Revenue Crown | 12,620 | 12,620 | 12,620 | 12,620 |
151 | Revenue Department | - | - | - | - |
- | Other Revenue | - | 5 | 5 | 5 |
Administration of Guarantees and Indemnities Given by the Crown PLA
What is intended to be achieved with this appropriation
This appropriation is intended to achieve efficient and effective administration of the Crown's guarantees and indemnities, including the Wholesale and Retail Deposit Guarantee Schemes.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
1,507 | Expenses | 731 | 3,110 | 3,110 | 2,110 |
Funded by: | |||||
3,109 | Revenue Crown | 822 | 3,109 | 3,109 | 2,109 |
- | Revenue Department | - | - | - | - |
- | Other Revenue | - | 1 | 1 | 1 |
Design and Establishment of Christchurch Regeneration Acceleration Facility
What is intended to be achieved with this appropriation
This appropriation is intended to enable the establishment and operation of the Christchurch Regeneration Acceleration Facility, including the design and management of decision-making processes and associated arrangements for investments.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
59 | Expenses | 12 | - | 12 | - |
Funded by: | |||||
799 | Revenue Crown | 12 | - | 12 | - |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
The Christchurch Regeneration Acceleration Facility is established in a timely manner | Achieved | Achieved |
Shared Support Services
What is intended to be achieved with this appropriation
This appropriation is intended to achieve quality, efficient support services for other agencies.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
9,626 | Expenses | 11,904 | 10,460 | 12,000 | 10,462 |
Funded by: | |||||
9,247 | Revenue Department | 11,733 | 10,460 | 12,000 | 10,460 |
379 | Other Revenue | 266 | - | - | - |
Southern Response Earthquake Services Independent Oversight Committee
What is intended to be achieved with this appropriation
This appropriation is intended to achieve independent oversight and advice on the implementation and delivery of a Southern Response proactive settlement package for former AMI policyholders who cash-settled for earthquake damage before 1 October 2014.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
67 | Expenses | 108 | 200 | 133 | 400 |
Funded by: | |||||
400 | Revenue Crown | 133 | 200 | 133 | 400 |
The Treasury - Capital Expenditure PLA
What is intended to be achieved with this appropriation
This appropriation is intended to achieve the renewal and replacement of life-expired assets in support of the delivery of Treasury services.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
1,355 | Property, Plant and Equipment | 1,075 | 2,430 | 3,955 | 3,400 |
1,703 | Intangibles | 835 | 3,555 | 2,030 | 2,585 |
3,058 | Total Appropriation | 1,910 | 5,985 | 5,985 | 5,985 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
Expenditure is in accordance with the Treasury capital asset management plan | Achieved | Achieved |
Crown Company Monitoring Advice MCA
What is intended to be achieved with this appropriation
This appropriation is intended to provide advice to shareholding or responsible Ministers to help them ensure appropriate financial returns and long-term value, from improved performance of companies that the Crown has a shareholding in and some Crown entities, in order to improve the wellbeing of New Zealanders.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
4,901 | Total Appropriation | 5,968 | 5,051 | 7,192 | 5,051 |
Departmental Output Expenses | |||||
4,770 | Crown Company Monitoring Advice to the Minster for State Owned Enterprises and Other Responsible Ministers | 5,820 | 4,963 | 7,104 | 4,963 |
131 | Crown Company Monitoring Advice to the Minster of Research, Science and Innovation | 148 | 88 | 88 | 88 |
Funded by: | |||||
5,039 | Revenue Crown | 5,189 | 5,048 | 5,189 | 5,048 |
- | Other Revenue | 1,064 | 3 | 2,003 | 3 |
Policy Advice and Financial Services MY MCA
This appropriation is intended to provide the government with high quality policy and financial advice and to deliver financial services.
Performance information for this appropriation is reported in section 2 of the Treasury Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
Departmental Output Expenses | |||||
249 | Crown Lending and Bank Accounts | 209 | 449 | 449 | 449 |
2,345 | Export Credit | 2,251 | 2,077 | 2,077 | 2,076 |
6,536 | Fiscal Management and Reporting | 5,748 | 9,920 | 9,920 | 9,922 |
4,479 | Investment Management and Asset Performance | 5,759 | 7,189 | 8,189 | 7,188 |
68,349 | Policy Advice | 65,342 | 58,746 | 69,696 | 70,630 |
81,958 | Total | 79,309 | 78,381 | 90,331 | 90,265 |
Funded by: | |||||
76,011 | Revenue Crown | 73,668 | 74,708 | 83,890 | 86,594 |
4,229 | Revenue Department | 4,498 | 3,556 | 6,204 | 3,556 |
1,215 | Other Revenue | 1,101 | 117 | 237 | 117 |
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 1 July 2019 | ||
Expires: 30 June 2024 | ||
347,949 | Original Appropriation | 347,949 |
47,289 | Cumulative Adjustments | 89,540 |
395,238 | Total Adjusted Appropriation | 437,489 |
81,955 | Cumulative Actual Expenditure as at 1 July for All Categories | 163,913 |
Current-year Actual Expenditure for All Categories | ||
249 | Crown Lending and Bank Accounts | 209 |
2,345 | Export Credit | 2,251 |
6,536 | Fiscal Management and Reporting | 5,748 |
4,479 | Investment Management and Asset Performance | 5,759 |
68,349 | Policy Advice | 65,342 |
81,958 | Total Current Year Actual Expenditure | 79,309 |
163,913 | Cumulative Actual Expenditure as at 30 June for All Categories | 243,222 |
231,325 | Appropriation Remaining as at 30 June | 194,267 |
Software as a Service Intangible Asset Derecognition (Write-off)
What is intended to be achieved with this appropriation
This appropriation is intended to enable the derecognition (write-off) of previously capitalised intangible assets, due to the accounting policy change regarding Software as a Service. The change in the accounting treatment means certain implementation costs associated with Software as a Service arrangements that have been capitalised and previously reported as an intangible asset now need to be written-off as an operating expense.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
- | Expenses | 913 | - | 970 | - |
Funded by: | |||||
- | Revenue Crown | 913 | - | 970 | - |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
Intangible asset derecognition is quantified in accordance with the change to the accounting policy | Achieved | Achieved |
Non-Departmental Appropriations
Management of Landcorp Protected Land Agreement MCA
What is intended to be achieved with this appropriation
This appropriation is intended to support the maintenance and management of land to ensure it is fit for purpose when it is required for public policy requirements.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
320 | Total Appropriation | 1,108 | 3,158 | 3,158 | 3,500 |
Non-Departmental Other Expenses | |||||
320 | Operating Costs | 17 | 1,658 | 1,658 | 2,000 |
Non-Departmental Capital Expenditure | |||||
- | Capital Investment | 1,091 | 1,500 | 1,500 | 1,500 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
Land and infrastructure is managed to the standards as set out in the terms and conditions of the Protected Land Agreement | Achieved | Achieved |
Management of New Zealand House, London MCA
What is intended to be achieved with this appropriation
This appropriation is intended to ensure that New Zealand House, London is well managed.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
8,198 | Total Appropriation | 8,132 | 12,964 | 25,579 | 10,992 |
Non-Departmental Output Expenses | |||||
- | Property Management | - | 1,000 | 3,000 | 1,000 |
Non-Departmental Other Expenses | |||||
8,130 | Operational Costs | 8,024 | 11,214 | 20,647 | 9,242 |
68 | Renegotiation of Lease Arrangements | 108 | - | 432 | - |
Non-Departmental Capital Expenditure | |||||
- | Capital Expenditure | - | 750 | 1,500 | 750 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
New Zealand House, London is well managed | Achieved | Achieved |
Greater Christchurch Regeneration MCA
What is intended to be achieved with this appropriation
This appropriation is intended to achieve management of remaining risks and cost pressures relating to the regeneration of Greater Christchurch.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
- | Total Appropriation | - | - | 8,973 | 100 |
Non-Departmental Other Expenses | |||||
- | Greater Christchurch Regeneration - Operating | - | - | 6,973 | 10 |
Non-Departmental Capital Expenditure | |||||
- | Greater Christchurch Regeneration - Capital | - | - | 2,000 | 90 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
Payments are made in accordance with approved drawdown requests | Achieved | n/a |
Other Financial Information for Non-Departmental Appropriations
Below is the financial information for nine non-departmental MYAs and one MY MCA for expenditure incurred by the Crown. The Treasury is not responsible for the performance reporting for these measures.
Shovel Ready Project Funding - Crown Infrastructure Partners Limited MYA
This appropriation is intended to provide grant funding to Crown Infrastructure Partners Limited to fund or deliver Shovel Ready Infrastructure Projects.
Performance information for this appropriation will be reported by Crown Infrastructure Partners Limited in its 2021/22 Annual Report.
Financial information
2021 Actual $000 |
|
2022 Actual $000 |
---|---|---|
Commenced: 1 August 2020 | ||
Expires: 30 June 2025 | ||
1,264,595 | Original Appropriation | 1,264,595 |
- | Cumulative Adjustments | 54,538 |
1,264,595 | Total Adjusted Appropriation | 1,319,133 |
- | Cumulative Actual Expenditure as at 1 July | 1,034,892 |
1,034,892 | Current-year Actual Expenditure | - |
1,034,892 | Cumulative Actual Expenditure as at 30 June | 1,034,892 |
229,703 | Appropriation Remaining as at 30 June | 284,241 |
Shovel Ready Project Funding - Ōtākaro Limited MYA
This appropriation is intended to provide grant funding to Ōtākaro Limited to fund or deliver Shovel Ready Infrastructure Projects.
Performance information for this appropriation will be reported by Ōtākaro Limited in its 2021/22 Annual Report.
Financial information
2021 Actual $000 |
|
2022 Actual $000 |
---|---|---|
Commenced: 1 August 2020 | ||
Expires: 30 June 2025 | ||
139,350 | Original Appropriation | 139,350 |
- | Cumulative Adjustments | (2,138) |
139,350 | Total Adjusted Appropriation | 137,212 |
- | Cumulative Actual Expenditure as at 1 July | 137,145 |
137,145 | Current-year Actual Expenditure | 66 |
137,145 | Cumulative Actual Expenditure as at 30 June | 137,211 |
2,205 | Appropriation Remaining as at 30 June | 1 |
COVID-19: Loans to Air New Zealand MYA
This appropriation is intended to fund the Crown's contribution to Air New Zealand Limited in response to the impacts of COVID-19.
Performance information for this appropriation is reported in the Minister of Finance's Report on Non-Departmental Appropriations.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 23 March 2020 | ||
Expires: 30 June 2024 | ||
900,000 | Original Appropriation | 900,000 |
600,000 | Cumulative Adjustments | 100,000 |
1,500,000 | Total Adjusted Appropriation | 1,000,000 |
- | Cumulative Actual Expenditure as at 1 July | 350,000 |
350,000 | Current-year Actual Expenditure | 500,000 |
350,000 | Cumulative Actual Expenditure as at 30 June | 850,000 |
1,150,000 | Appropriation Remaining as at 30 June | 150,000 |
Crown Infrastructure Partners Limited - Equity Injection MYA
This appropriation is intended to enable Crown Infrastructure Partners Limited to invest in water and roading infrastructure to support the timely increase of housing supply.
Performance information for this appropriation is exempt.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 9 April 2018 | ||
Expires: 30 June 2022 | ||
600,000 | Original Appropriation | 600,000 |
(308,000) | Cumulative Adjustments | (566,867) |
292,000 | Total Adjusted Appropriation | 33,133 |
17,000 | Cumulative Actual Expenditure as at 1 July | 27,500 |
10,500 | Current-year Actual Expenditure | 4,600 |
27,500 | Cumulative Actual Expenditure as at 30 June | 32,100 |
264,500 | Appropriation Remaining as at 30 June | 1,033 |
New Zealand Green Investment Finance Limited - Equity Injections for Capital Investments MYA
This appropriation is intended to fund the Crown's contribution to New Zealand Green Investment Finance Limited for its capital investments.
Performance information for this appropriation will be reported by New Zealand Green Investment Finance Limited in its Annual Report for 2021/22.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 12 April 2019 | ||
Expires: 30 June 2023 | ||
100,000 | Original Appropriation | 100,000 |
200,000 | Cumulative Adjustments | 200,000 |
300,000 | Total Adjusted Appropriation | 300,000 |
40,000 | Cumulative Actual Expenditure as at 1 July | 80,000 |
40,000 | Current-year Actual Expenditure | 150,000 |
80,000 | Cumulative Actual Expenditure as at 30 June | 230,000 |
220,000 | Appropriation Remaining as at 30 June | 70,000 |
New Zealand Green Investment Finance Limited - Equity Injections for Operating Expenditure MYA
This appropriation is intended to provide capital to New Zealand Green Investment Finance Limited to fund its operating costs and enable it to facilitate and accelerate low-emissions investment.
Performance information for this appropriation will be reported on by New Zealand Green Investment Finance Limited in its Annual Report for 2021/22.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 12 April 2019 | ||
Expires: 30 June 2023 | ||
30,000 | Original Appropriation | 30,000 |
- | Cumulative Adjustments | - |
30,000 | Total Adjusted Appropriation | 30,000 |
6,000 | Cumulative Actual Expenditure as at 1 July | 13,940 |
7,940 | Current-year Actual Expenditure | 5,420 |
13,940 | Cumulative Actual Expenditure as at 30 June | 19,360 |
16,060 | Appropriation Remaining as at 30 June | 10,640 |
Participation in Dividend Reinvestment Plans by the Mixed Ownership Model Companies MYA
This appropriation is intended to achieve participation in any dividend reinvestment plans by the four mixed ownership companies: Genesis Energy Limited, Mercury NZ Limited, Meridian Energy Limited and Air New Zealand Limited.
Performance information for this appropriation is exempt.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 14 February 2018 | ||
Expires: 30 June 2022 | ||
80,000 | Original Appropriation | 80,000 |
- | Cumulative Adjustments | 50,000 |
80,000 | Total Adjusted Appropriation | 130,000 |
49,787 | Cumulative Actual Expenditure as at 1 July | 58,654 |
8,867 | Current-year Actual Expenditure | 48,589 |
58,654 | Cumulative Actual Expenditure as at 30 June | 107,243 |
21,346 | Appropriation Remaining as at 30 June | 22,757 |
Crown Standby Loan Facility for Air New Zealand MYA
This appropriation is intended to facilitate the financing of a credit facility to Air New Zealand.
Performance information for this appropriation is exempt.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 1 March 2022 | ||
Expires: 30 June 2026 | ||
- | Original Appropriation | 400,000 |
- | Cumulative Adjustments | - |
- | Total Adjusted Appropriation | 400,000 |
- | Cumulative Actual Expenditure as at 1 July | - |
- | Current-year Actual Expenditure | - |
- | Cumulative Actual Expenditure as at 30 June | - |
- | Appropriation Remaining as at 30 June | 400,000 |
Local Government Funding Agency Liquidity Facility MYA
This appropriation is intended to give effect to section 15(1) of the Local Government Borrowing Act 2011 by enabling the Crown to provide the LGFA with funding as required for the standby liquidity facility.
Performance information for this appropriation is exempt.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 14 April 2022 | ||
Expires: 30 June 2024 | ||
- | Original Appropriation | 1,500,000 |
- | Cumulative Adjustments | - |
- | Total Adjusted Appropriation | 1,500,000 |
- | Cumulative Actual Expenditure as at 1 July | - |
- | Current-year Actual Expenditure | - |
- | Cumulative Actual Expenditure as at 30 June | - |
- | Appropriation Remaining as at 30 June | 1,500,000 |
Earthquake Commission - On-sold Canterbury Properties MY MCA
This appropriation is intended to achieve the repair of eligible Canterbury homes to address social issues arising from unrepaired homes with inadequate EQC commissioned repaired and/or damage missed from EQC insurance assessments.
Performance information for this appropriation will be reported by the Earthquake Commission in its 2021/22 Annual Report.
Financial information
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 1 September 2019 | ||
Expires: 30 June 2024 | ||
300,000 | Original Appropriation | 300,000 |
100,000 | Cumulative Adjustments | 280,000 |
400,000 | Total Adjusted Appropriation | 580,000 |
287,938 | Cumulative Actual Expenditure as at 1 July for All Categories | 370,567 |
Current-Year Actual Expenditure for All Categories | ||
20,552 | Claim Handling and Other Administrative Costs | 14,175 |
62,077 | Repair of Canterbury Properties | 147,723 |
82,629 | Total Current-Year Actual Expenditure | 161,898 |
370,567 | Cumulative Actual Expenditure as at 30 June for All Categories | 532,465 |
29,433 | Appropriation Remaining as at 30 June | 47,535 |
Financial Statements#
Departmental Financial Statements
Statement of Comprehensive Revenue and Expenses
for the year ended 30 June 2022
The Statement of Comprehensive Revenue and Expenses details the revenue and expenses relating to all outputs (goods and services) produced by the Treasury during the financial year ended 30 June 2022.
Total expenses are equal to total amounts incurred against departmental output expense appropriations and departmental output expense categories in the Statement of Budgeted and Actual Expenses and Capital Expenditure Incurred Against Appropriations.
2021 Actual $000 (Restated) |
Note | 2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
Income | |||||
98,027 | Revenue Crown | 2 | 92,444 | 95,685 | 106,771 |
15,221 | Other revenue | 3 | 18,662 | 14,142 | 14,142 |
113,248 | Total income | 111,106 | 109,827 | 120,913 | |
Expenditure | |||||
80,778 | Personnel costs | 4 | 77,830 | 78,630 | 79,246 |
4,385 | Depreciation and amortisation expense | 5/6 | 4,237 | 5,163 | 5,209 |
1,217 | Capital charge | 7 | 1,217 | 1,217 | 1,247 |
22,059 | Other operating expenses | 8 | 25,519 | 24,817 | 35,211 |
108,439 | Total expenditure | 108,803 | 109,827 | 120,913 | |
4,809 | Total comprehensive revenue and expenses | 2,303 | - | - |
Statement of Changes in Equity
for the year ended 30 June 2022
2021 Actual $000 (Restated) |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|
24,345 | Balance as at 30 June 2020 as previously reported | |||
(986) | Prior period adjustment* | |||
23,359 | Balance as at 1 July | 23,359 | 24,345 | 23,978 |
4,809 | Total comprehensive revenue and expenses | 2,303 | - | - |
(4,809) | Return of operating surplus to the Crown | (2,303) | - | - |
- | Capital contributions | 603 | - | - |
- | Capital withdrawals | - | - | - |
23,359 | Balance as at 30 June | 23,962 | 24,345 | 23,978 |
* See Statement of Accounting Policies note for an explanation of this matter.
The accompanying accounting policies and notes form part of these Financial Statements.
Statement of Financial Position
as at 30 June 2022
The Statement of Financial Position reports the total assets and liabilities of the Treasury as at 30 June 2022. Taxpayers' funds are represented by the difference between the assets and liabilities.
2021 Actual $000 (Restated) |
Note | 2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|---|
Assets | |||||
Current assets | |||||
10,834 | Cash and cash equivalents | 3,544 | 5,719 | 3,925 | |
3,309 | Debtors and other receivables | 4,102 | 2,603 | 2,603 | |
941 | Prepayments | 1,186 | 400 | 400 | |
10,113 | Debtor Crown | 17,995 | 4,937 | 4,937 | |
25,197 | Total current assets | 26,827 | 13,659 | 11,865 | |
Non-current assets | |||||
11,344 | Property, plant and equipment | 5 | 9,432 | 9,859 | 8,767 |
3,845 | Intangible assets | 6 | 3,854 | 11,210 | 11,210 |
15,189 | Total non-current assets | 13,286 | 21,069 | 19,977 | |
40,386 | Total assets | 40,113 | 34,728 | 31,842 | |
Liabilities | |||||
Current liabilities | |||||
4,924 | Creditors and other payables | 9 | 6,107 | 5,410 | 2,891 |
4,809 | Repayment of surplus | 2,376 | - | - | |
6,633 | Employee entitlements | 10 | 7,143 | 4,276 | 4,276 |
16,366 | Total current liabilities | 15,626 | 9,686 | 7,167 | |
Non-current liabilities | |||||
661 | Employee entitlements | 10 | 525 | 697 | 697 |
661 | Total non-current liabilities | 525 | 697 | 697 | |
17,027 | Total liabilities | 16,151 | 10,383 | 7,864 | |
23,359 | Net assets | 23,962 | 24,345 | 23,978 | |
Equity | |||||
23,359 | Taxpayers' funds | 23,962 | 24,345 | 23,978 | |
23,359 | Total equity | 23,962 | 24,345 | 23,978 |
The accompanying accounting policies and notes form part of these Financial Statements.
Statement of Cash Flows
for the year ended 30 June 2022
The Statement of Cash Flows summarises the cash movements in and out of the Treasury during the financial year. It takes into account money owed to the Treasury or owing by the Treasury and therefore differs from the Statement of Comprehensive Revenue and Expenses.
2021 Actual $000 (Restated) |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|
Cash flows from operating activities | ||||
95,055 | Receipts from Crown | 84,562 | 95,685 | 106,771 |
14,221 | Receipts from other revenue | 19,053 | 14,142 | 14,142 |
(23,989) | Payments to suppliers | (23,486) | (30,115) | (40,573) |
(80,861) | Payments to employees | (78,093) | (78,495) | (79,093) |
(1,217) | Payments for capital charge | (1,217) | (1,217) | (1,247) |
(468) | Goods and services tax net | (2,067) | 1,485 | 1,485 |
2,741 | Net cash flows from operating activities | (1,248) | 1,485 | 1,485 |
Cash flows from investing activities | ||||
(1,355) | Purchases of property, plant and equipment | (1,075) | (1,700) | (1,700) |
(1,006) | Purchases of intangible assets | (835) | (1,000) | (1,000) |
(2,361) | Net cash flows from investing activities | (1,910) | (2,700) | (2,700) |
Cash flows from financing activities | ||||
- | Capital contributions | 603 | - | - |
(2,777) | Repayment of surplus to the Crown | (4,735) | - | - |
(2,777) | Net cash flows from financing activities | (4,132) | - | - |
(2,397) | Net (decrease)/increase in cash | (7,290) | (1,215) | (1,215) |
13,231 | Cash at the beginning of the year | 10,834 | 6,934 | 5,140 |
10,834 | Cash at the end of the year | 3,544 | 5,719 | 3,925 |
The accompanying accounting policies and notes form part of these Financial Statements.
Reconciliation of Net Surplus to Net Cash Flows from Operating Activities
2021 Actual $000 (Restated) |
2022 Actual $000 |
|
---|---|---|
4,809 | Net surplus/(deficit) | 2,303 |
Non-cash items | ||
4,385 | Depreciation, amortisation and impairment expenses | 4,237 |
4,385 | Total non-cash items | 4,237 |
Add/(less) movements in Statement of Financial Position items | ||
(2,972) | (Increase)/decrease in debtor Crown | (7,882) |
(1,000) | (Increase)/decrease in debtors and other receivables | 392 |
(54) | (Increase)/decrease in prepayments | (670) |
(1,876) | Increase/(decrease) in creditors and other payables | 2,127 |
(468) | Increase/(decrease) in GST | (2,129) |
(83) | Increase/(decrease) in employee entitlements | 374 |
(6,453) | Net movement in working capital items | (7,788) |
2,741 | Net cash flow from operating activities | (1,248) |
Statement of Commitments
Commitments are future expenses and liabilities to be incurred on contracts that have been entered into at balance date.
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Non-cancellable operating lease commitments | ||
3,726 | Not later than 1 year | 3,782 |
15,471 | Later than 1 year and not later than 5 years | 15,703 |
19,246 | Later than 5 years | 15,232 |
38,443 | Total non-cancellable operating lease commitments | 34,717 |
The Treasury has a lease agreement for Levels 1-4 of 1 The Terrace, Wellington. The commencement date of the lease was 23 February 2019 for a term of 12 years, with an additional three rights of renewal for six years each.
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Other commitments | ||
562 | Not later than 1 year | 796 |
461 | Later than 1 year and not later than 5 years | 2,509 |
1,023 | Total capital commitments | 3,305 |
The Treasury entered into a five-year commitment in 2017, and another five-year commitment in 2022 with a software provider.
Statement of Contingent Liabilities and Contingent Assets
Contingent liabilities and contingent assets are reported at the point at which the contingency is evident or when a present liability is unable to be measured with sufficient reliability to be recorded in the Financial Statements.
Unquantifiable contingent liabilities
The Treasury has unquantifiable contingent liabilities for carpark licences and a deed of lease against certain damages or losses caused by our use of those carparks and premises.
The Treasury has also granted indemnities to Reuters with respect to breaches of licence agreements and contracts.
Quantifiable contingent liabilities and assets
As at 30 June 2022, the Treasury had no quantifiable contingent assets or liabilities (30 June 2021: Nil).
Notes to the Departmental Financial Statements and Non-Departmental Financial Schedules
for the year ended 30 June 2022
1 Statement of Accounting Policies
The Treasury is a New Zealand government department as defined by section 5 of the Public Service Act 2020 and is domiciled and operates in New Zealand. The relevant legislation governing the Treasury's operations includes the Public Finance Act 1989 and the Public Service Act 2020. The Treasury's ultimate parent is the New Zealand Crown.
In addition, the Treasury has reported separately on the Non-Departmental Financial Schedules which present financial information on public funds managed by the Treasury on behalf of the Crown, and Trust monies that it administers on behalf of the Crown.
The primary objective of the Treasury is to provide services to the public rather than make a financial return. It operates as the Government's lead economic and financial advisor. Accordingly, the Treasury has designated itself as a public benefit entity (PBE) for the purposes of complying with generally accepted accounting practice (GAAP).
The Financial Statements of the Treasury for the year ended 30 June 2022 were approved for issue by the Secretary to the Treasury on 30 September 2022.
The Treasury Financial Statements and the financial information reported in the Non-Departmental Financial Schedules are consolidated into the Financial Statements of the Government and readers of these schedules should also refer to the Financial Statements of the Government for the year ended 30 June 2022.
Statement of compliance
The Financial Statements and unaudited Forecast Financial Statements of the Treasury, and the Non-Departmental Financial Schedules, have been prepared in accordance with the requirements of the Public Finance Act, which include a requirement to comply with New Zealand Generally Accepted Accounting Practices (NZ GAAP), Treasury Instructions, Treasury Circulars and Tier 1 NZ PBE accounting standards.
Measurement and recognition rules applied in the preparation of the Non-Departmental Supplementary Financial Schedules are consistent with NZ GAAP and Crown accounting policies and are detailed in the Financial Statements of the Government.
Basis of preparation
The Financial Statements have been prepared on a going-concern basis, and the accounting policies have been applied consistently throughout the year.
Functional and presentation currency
The Treasury Financial Statements and Non-Departmental Financial Schedules are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000). The functional currency of the Treasury is New Zealand dollars.
Changes in accounting policies
The following amendments or accounting policy changes occurred during 2022:
Software as a Service - new interpretation
In April 2021, the IFRS Interpretations Committee published additional guidance regarding the accounting treatment of configuration and customisation costs incurred in implementing software as a service (‘SaaS') arrangements. The Committee referenced the applicable accounting standards that set criteria for the recognition of intangible assets. These criteria include the identifiability and control of the asset, and the expectation of future economic benefits or service potential arising from the asset. The Committee concluded that configuration and customisation costs should only be capitalised if the specific criteria outlined in the applicable accounting standards for recognising a separate asset are met. As a result, the Treasury has changed its accounting policy in relation to configuration and customisation costs incurred in implementing SaaS arrangements.
Fees to access the supplier's application software in a SaaS arrangement
Where the SaaS contract only gives the Treasury a right to receive access to the supplier's application software, that access in the SaaS arrangement would usually not result in the recognition of an intangible asset due to lack of control over an identified asset. This is because the SaaS provider usually holds, manages, and updates the SaaS application software over the period of the arrangement.
However, where the Treasury receives rights beyond a right of access, this could indicate there is an intangible asset under PBE IPSAS 31 Intangible Assets or the arrangement contains a finance lease under PBE IPSAS 13 Leases. If the fees associated with the access to the software of a SaaS arrangement give rise to an intangible asset, then these are recorded against the intangible asset as part of its cost. If fees associated with the access to the software of a SaaS arrangement do not give rise to an intangible asset or finance lease, they are viewed as payments for services and are expensed as incurred (generally over the term of arrangement).
Configuration and customisation costs related to SaaS
If the Treasury controls the software in the SaaS arrangement and is recognising an intangible asset for the SaaS, then the configuration and customisation costs of that software are capitalised as an intangible asset.
If the SaaS has been assessed as not an intangible asset of the Treasury and the configuration and customisation to the SaaS provider's application software are performed by the Treasury or its contractors, those costs are expensed as they are incurred. However, if the configuration and customisation work is performed by the SaaS provider, or their subcontractor, further analysis of the costs is required to determine if they should be expensed as the configuration and customisation services are incurred (usually upfront) and recognising a liability if the costs are paid over the term of the arrangement or spread over the term of the SaaS arrangement (recognising a prepayment if paid upfront).
For configuration and customisation related costs that are paid upfront (as opposed to payments throughout the service term), if the configuration and customisation services delivered to the Treasury are distinct from the delivery of the SaaS access services, then they are expensed as incurred. Otherwise, if configuration and customisation services delivered are not distinct from the delivery of the SaaS access services, they are recognised as a prepayment and are expensed over the expected service term of the SaaS arrangement.
Impact of the change in accounting policy
The Treasury reviewed the Intangible Assets that had been capitalised and identified several that related to SaaS and needed to be derecognised to be consistent with the amended policy. Some of the impacted assets were reclassified within the balance sheet to be recorded as Prepayments as they related to prepaid SaaS license fees.
This change in accounting policy has been accounted for retrospectively, and the comparative statements for 2021 have been restated. The effect of the change on the previously published 2021 results is tabulated below.
$000 | |
---|---|
2021 Comprehensive Revenue and Expense Impact from the policy change | |
Increase in other Operating Expenses | (292) |
Decrease in Depreciation and Amortisation Expense | 365 |
Increase in Comprehensive Revenue and Expense | 73 |
2021 Balance Sheet impact from the policy change | |
Increase in Prepayments | 577 |
Decrease in Intangible Assets | (1,490) |
Increase in Repayment of Surplus | (73) |
Decrease in Net Assets | (986) |
2021 overall Total Equity impact from the policy change | (913) |
Standards issued and not yet effective and not early adopted
Standards and amendments issued but not yet effective and that have not been early adopted, and that are relevant to the Treasury are:
PBE FRS 48 Service Performance Reporting
PBE FRS 48 replaces the service performance reporting requirements of PBE IPSAS 1 Presentation of Financial Statements and is effective for the year ending 30 June 2023, with earlier adoption permitted. The Treasury has not yet determined how the application of PBE FRS 48 will affect its statement of service performance. The Treasury has not early adopted the amendment.
Critical accounting estimates and assumptions
In preparing these Financial Statements, estimates and assumptions have been made concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of the non-departmental liabilities relate to the following provisions:
- Business Finance Guarantee Scheme
- Large Scale Asset Purchases Indemnity
- Southern Response Earthquake Services Limited Investment
- Earthquake Commission On-sold Canterbury Properties
- Stockton Acid Mine Drainage Remediation.
For departmental liabilities, the most significant estimates relate to the measurement of long service and retirement leave.
The amounts calculated are based on available information and will be reviewed at each future balance date.
Summary of significant accounting policies
Significant accounting policies are included in the notes to which they relate.
Significant accounting policies that do not relate to a specific note are outlined below.
Financial assets
Cash and cash equivalents include cash on hand, deposits held at call with banks, and other short-term, highly liquid investments with original maturities of three months or less. The Treasury is permitted to expend its cash and cash equivalents only within the scope and limits of its appropriations.
Short-term receivables are recorded at the amounts due, less an allowance for expected credit losses (if any). When relevant, the Treasury applies the simplified expected-credit-loss model of recognising lifetime expected credit losses for receivables.
In measuring expected credit losses, short-term receivables are assessed on a collective basis as they possess shared credit-risk characteristics.
Short-term receivables are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include the debtor being in liquidation or the receivable being more than one year overdue.
Goods and services tax
Items in the financial statements are stated exclusive of goods and services tax (GST), except for receivables and payables, which are stated on a GST-inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense.
The net amount of GST recoverable from, or payable to, Inland Revenue is included as part of receivables or payables in the Statement of Financial Position.
The net GST paid to or received from Inland Revenue, including the GST relating to investing and financing activities, is classified as an operating cash flow in the Statement of Cash Flows. Commitments and contingencies are disclosed exclusive of GST.
Income tax
The Treasury is a public authority and consequently is exempt from income tax. Accordingly, no provision has been made for income tax.
Financial liabilities
All financial liabilities are initially recognised at fair value and then measured at amortised cost, unless the non-current amount is significant enough to warrant designation at amortised value using the effective interest rate method.
Commitments
Future expenses and liabilities to be incurred on non-cancellable contracts at balance date.
Main Estimates and forecast figures
The 2022 Main Estimates figures are consistent with the Treasury's best estimate financial forecast information submitted to the Treasury for the 2021 Budget Economic and Fiscal Update (BEFU) for the year ending 30 June 2022.
The 2023 forecast figures are for the year ending 30 June 2023, and are consistent with the best estimate financial forecast information submitted to the Treasury for the 2022 BEFU for the year ending 30 June 2023.
The Forecast Financial Statements have been prepared as required by the Public Finance Act to communicate forecast financial information for accountability purposes.
The budget and forecast figures are unaudited and have been prepared using the accounting policies adopted in preparing these financial statements.
The 30 June 2023 forecast figures have been prepared in accordance with and comply with PBE FRS 42 Prospective Financial Statements. The Forecast Financial Statements were approved for issue by the Secretary to the Treasury on 20 April 2022.
The Secretary to the Treasury is responsible for the Forecast Financial Statements, including the appropriateness of the assumptions underlying them and all other required disclosures.
Although the Treasury regularly updates its forecasts, updated Forecast Financial Statements for the year ending 30 June 2023 will not be published.
Significant assumptions are used in preparing the forecast financial information
The forecast figures contained in these financial statements reflect the Treasury's purpose and activities and are based on a number of assumptions on what might occur during the 2022/23 year. The forecast figures have been compiled on the basis of existing government policies and ministerial expectations at the time the Main Estimates were finalised.
The main assumptions that were adopted as at 20 April 2022 were as follows:
- The Treasury's activities and output expectations will remain substantially the same as the previous year focusing on the Government's priorities.
- Personnel costs were based on current wage and salary costs, adjusted for anticipated remuneration changes.
- Operating costs were based on historical experience and other factors that are believed to be reasonable in the circumstances and are the Treasury's best estimate of future costs that will be incurred.
The actual financial results achieved for the year ending 30 June 2023 are likely to vary from the forecast information presented, and the variations might be material. Additional factors that could lead to material differences between the Forecast Financial Statements and the results in the 2022/23 Financial Statements include changes to the baseline funding through new initiatives, transfers of funding across financial years or technical adjustments.
Comparatives
When the presentation or classification of items in the Treasury Financial Statements is amended or accounting policies are changed voluntarily, comparative figures are restated to ensure consistency with the current period unless it is impracticable to do so.
Statement of cost allocation policies
The Treasury has determined the cost of outputs using the following cost allocation system:
- Direct costs are expenses incurred from activities in producing outputs. These costs are charged directly to the related output classes.
- Indirect costs are expenses incurred by Corporate Services and by the Office of the Chief Executive that cannot be identified with a specific output. Indirect costs are allocated to each output class based on cost drivers, related activity and usage information.
There have been no changes in the Treasury's general cost accounting policies since the date of the last audited Financial Statements.
2 Revenue Crown
Revenue from the Crown is measured based on the Treasury's funding entitlement for the reporting period. The funding entitlement is established by Parliament when it passes the Appropriation Acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year and certain other unconditional funding adjustments formally approved prior to balance date.
There are no conditions attached to the funding from the Crown. However, the Treasury can incur expenses only within the scope and limits of its appropriations.
The fair value of Revenue Crown has been determined to be equivalent to the funding entitlement.
3 Other Revenue
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
9,626 | Cost recoveries from Government agencies for shared services | 11,999 |
1,848 | Cost recoveries from secondments | - |
2,457 | Cost recoveries from Gateway projects | 3,825 |
1,290 | Other | 2,838 |
15,221 | Total other revenue | 18,662 |
4 Personnel Costs
Salaries and wages
Salaries and wages are recognised as an expense as employees provide services.
Superannuation
Employee contributions to the State Sector Retirement Savings Scheme, KiwiSaver and the Government Superannuation Fund (GSF) are accounted for as defined contribution superannuation schemes and are expensed in the surplus or deficit as incurred.
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
76,553 | Salaries and wages | 72,257 |
2,315 | Superannuation contributions to defined contribution plans | 2,316 |
(83) | Increase/(decrease) in employee entitlements | 374 |
931 | Training and development | 742 |
1,062 | Other | 2,141 |
80,778 | Total personnel costs | 77,830 |
5 Property, Plant and Equipment
Leasehold Improvements $000 |
Furniture, Fittings and Office Equipment $000 |
Computer Hardware $000 |
Total $000 |
|
---|---|---|---|---|
Cost | ||||
Balance at 30 June 2020 | 9,717 | 2,527 | 12,009 | 24,253 |
Additions | - | - | 1,355 | 1,355 |
Disposal | - | (398) | (3,567) | (3,965) |
Balance at 30 June 2021 | 9,717 | 2,129 | 9,797 | 21,643 |
Additions | - | - | 1,075 | 1,075 |
Disposal | - | (394) | (1,978) | (2,372) |
Other Asset Movement | (265) | 421 | (609) | (453) |
Balance at 30 June 2022 | 9,452 | 2,156 | 8,285 | 19,893 |
Accumulated depreciation and impairment losses | ||||
Balance at 30 June 2020 | 1,306 | 1,883 | 8,622 | 11,811 |
Depreciation expense | 788 | 400 | 1,265 | 2,453 |
Elimination on disposal | - | (398) | (3,567) | (3,965) |
Balance at 30 June 2021 | 2,094 | 1,885 | 6,320 | 10,299 |
Depreciation expense | 788 | 364 | 1,381 | 2,533 |
Elimination on disposal | - | (394) | (1,977) | (2,371) |
Balance at 30 June 2022 | 2,882 | 1,855 | 5,724 | 10,461 |
Carrying amounts | ||||
Balance at 30 June 2020 | 8,411 | 644 | 3,387 | 12,442 |
Balance at 30 June 2021 | 7,623 | 244 | 3,477 | 11,344 |
Balance at 30 June 2022 | 6,570 | 301 | 2,561 | 9,432 |
Asset | Useful Life | Depreciation/ Amortisation Rate |
---|---|---|
Furniture and fittings and office equipment | 3-10 years | 10%-33% |
Leasehold improvements | 12 years | 8.33% |
Computer equipment | 3-5 years | 20%-33.3% |
Computer software - intangibles | 3-5 years | 20%-33.3% |
6 Intangible Assets
Acquired Software $000 |
Internally Generated Software $000 |
Total $000 |
|
---|---|---|---|
Cost | |||
Balance at 30 June 2020 (Restated) | 5,947 | 11,031 | 16,978 |
Additions | 276 | 1,428 | 1,704 |
Disposal | (116) | - | (116) |
Balance at 30 June 2021 (Restated) | 6,107 | 12,459 | 18,566 |
Additions | (4) | 839 | 835 |
Disposal | (1,203) | (39) | (1,242) |
Transfers | 1,079 | (1,079) | - |
Other Asset Movement | 706 | 173 | 879 |
Balance at 30 June 2022 | 6,685 | 12,353 | 19,038 |
Accumulated amortisation and impairment losses | |||
Balance at 30 June 2020 (Restated) | 5,127 | 7,778 | 12,905 |
Amortisation expense | 569 | 1,363 | 1,932 |
Elimination on disposal | (116) | - | (116) |
Balance at 30 June 2021 (Restated) | 5,580 | 9,141 | 14,721 |
Amortisation expense | 469 | 1,235 | 1,704 |
Elimination on disposal | (1,203) | (38) | (1,241) |
Balance at 30 June 2022 | 4,846 | 10,338 | 15,184 |
Carrying amounts | |||
Balance at 30 June 2020 (Restated) | 820 | 3,253 | 4,073 |
Balance at 30 June 2021 (Restated) | 527 | 3,318 | 3,845 |
Balance at 30 June 2022 | 1,839 | 2,015 | 3,854 |
7 Capital Charge
The capital charge is recognised as an expense in the financial year to which the charge relates. The Treasury pays a capital charge to the Crown based on its equity as at 30 June and 31 December each year.
The capital charge rate for the year ended 30 June 2022 was 5% (2021: 5%).
8 Other Operating Expenses
2021 Actual $000 (Restated) |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2023 Forecast Unaudited $000 |
|
---|---|---|---|---|
4,539 | Rental of premises | 4.595 | 4,389 | 3,911 |
625 | Commissions, service charges and bank fees | 263 | 857 | 350 |
Fees to auditor: | ||||
652 |
|
561 | 400 | 989 |
470 |
|
413 | 300 | 185 |
- |
|
196 | - | - |
4,982 | Consultants | 7,592 | 8,200 | 12,000 |
654 | Legal fees | 1,431 | 968 | 1,850 |
337 | Process management services | 272 | 557 | 576 |
276 | Transport and travel | 217 | 816 | 1,387 |
8,189 | Information and communication costs | 9,056 | 7,460 | 9,989 |
322 | Office administration costs | 353 | 346 | 476 |
1,013 | Other operating costs | 570 | 524 | 3,498 |
22,059 | Total operating expenses | 25,519 | 24,817 | 35,211 |
9 Creditors and Other Payables
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
1,775 | Payables | 2,512 |
2,205 | Accrued expenses | 3,595 |
944 | GST payable to Inland Revenue | - |
4,924 | Total creditors and other payables | 6,107 |
10 Employment Entitlement Provisions
Accrued salaries, annual leave, retirement leave, and other employee entitlements expected to be settled within 12 months of balance date are classified as current liabilities. All other employee entitlements are classified as non-current liabilities.
The present value of the retirement and long service leave obligations depends on a number of factors. Two key factors are the discount rate and the salary-inflation factor. Any changes in these assumptions will change the carrying amount of the liability.
In determining the appropriate discount rate, the Treasury has adopted the central table of risk-free discount rates and consumers price index assumptions provided by the Treasury to all departments.
The Treasury is no longer required to recognise a sick leave provision as its staff members are now entitled to a managed sick leave arrangement. The cost of sick leave is recognised when the absences occur.
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Current employment entitlement provisions | ||
1,390 | Accrued salaries | 1,584 |
4,890 | Annual leave | 5,221 |
353 | Retirement, resigning and long service leave | 338 |
6,633 | Total current employment entitlement provisions | 7,143 |
Non-current employment entitlement provisions | ||
661 | Retirement, resigning and long service leave | 525 |
661 | Total non-current employment entitlement provisions | 525 |
7,294 | Total employee entitlements | 7,668 |
11 Related Party Transactions
All related party transactions have been entered into on an arm's-length basis and are therefore exempt from the need for disclosure.
The Treasury is a wholly owned entity of the Crown and received funding from the Crown of $92.444 million to provide services to the public in the year ended 30 June 2022 (2021: $98.027 million). The Government significantly influences the roles of the Treasury as well as being its major source of revenue.
In conducting its activities, the Treasury is required to pay various taxes and levies to the Crown and entities related to the Crown. The payment of these taxes and levies, other than income tax, is based on the standard terms and conditions that apply to all tax and levy payers. The Treasury is exempt from income tax.
The Treasury also purchases and sells goods and services from entities controlled, significantly influenced or jointly controlled by the Crown. Transactions with other government agencies (ie, government departments and Crown entities) are not disclosed as related party transactions when they are consistent with the normal operating arrangements between government agencies and undertaken on normal terms and conditions.
Key management personnel compensation
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
2,243 | Salaries and other short-term employee benefits | 2,766 |
74 | Post-employment benefits | 75 |
2,317 | Total key management personnel compensation | 2,841 |
Key management personnel of the Treasury as at 30 June 2022 comprised the Secretary and the members of the Executive Leadership Team.
The key management personnel compensation disclosure excludes the remuneration and other benefits for the Ministers of the Crown for which the Treasury undertakes activities. The Ministers' remuneration and other benefits are set by the Remuneration Authority under the Members of Parliament (Remuneration and Services) Act 2013. They are paid under Permanent Legislative Authority (PLA), and are not paid by the Treasury.
Related party transactions involving key management personnel (or their close family members)
There were no related party transactions involving key management personnel or their close family members. No provision has been required, nor any expense recognised, for impairment of receivables from related parties (2021: Nil).
12 Events After Balance Date
There were no events subsequent to balance date that required adjustment to the Financial Statements or disclosure (2021: Nil).
13 Explanation of Major Variances Between Actual 2021/22 and Budget
The Treasury had a higher net surplus than estimated, mainly as a result of delays in one off projects. These projects mainly fall under the Policy Advice and Financial Services multi-year multi-category appropriation and the Crown Company Monitoring multi-category appropriation and any unspent funding on these projects in 2021/22 will transfer to 2022/23 as these projects continue. The underspends in the Debt Management Permanent Legislative Authority are due to resourcing for new initiatives not being fully achieved.
Some variances in the Statement of Financial Position and Statement of Cash Flows are timing differences only, resulting from the timing and receipt of cash payments to suppliers and receipts from the Crown.
Non-Departmental Financial Schedules
for the year ended 30 June 2022
This section reports on the Non-Departmental Financial Schedules in the form of revenue and capital receipts, expenses, assets and liabilities, commitments, contingent liabilities and trust accounts that the Treasury manages on behalf of the Crown.
These schedules do not, and are not intended to, constitute a full set of financial statements and therefore do not include elements that would be expected to be found in financial statements, such as details of the surplus/(deficit) or financial position.
What are Non-Departmental Expenses?
A category (class) of outputs can be supplied either by a department (in which case it is labelled a departmental output expense) or to, or on behalf of, the Crown (in which case it is labelled a non-departmental output expense). Definitions of ‘departmental' and ‘non-departmental' are in section 2 of the Public Finance Act 1989.
Non-Departmental expense appropriations are where Ministers have decided to use a supplier other than a department to provide an output. Most commonly these appropriations fund Crown entities.
Examples of the Treasury's non-departmental activities are:
Entities | Activities |
---|---|
New Zealand Debt Management (NZDM) | NZDM is a unit within the Treasury that manages core Crown borrowing requirements with the objective of managing debt in a way that minimises borrowing costs over the long term while keeping risk at an appropriate level. The Treasury also oversees an investment programme, to help manage Crown cash and liquidity requirements. |
Ōtākaro Limited | Ōtākaro Limited is delivering Crown-led Anchor Projects in central Christchurch and divesting the balance of Crown land. The company will accelerate work on the Anchor Projects by working in a commercial and transparent manner, enabled through its structure as a Crown Company. |
Government Superannuation Fund Authority | The Government Superannuation Fund Authority is an autonomous Crown entity, established in October 2001. Its functions are to manage and administer the GSF and the GSF Schemes in accordance with the Government Superannuation Fund Act 1956 and subsequent amendments. |
Southern Response Earthquake Services Limited | Southern Response Earthquake Services Limited is the government-owned company responsible for settling claims by AMI policyholders for Canterbury earthquake damage that occurred before 5 April 2012 (the date AMI was sold to IAG). |
New Zealand Export Credit | New Zealand Export Credit is a unit within the Treasury that provides a range of trade credit insurance and financial guarantees that promote and support New Zealand exports and the internationalisation of New Zealand businesses. |
Schedule of Revenue and Capital Receipts
for the year ended 30 June 2022
2021 Actual $000 |
Note | 2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
|
---|---|---|---|---|
Vote Finance | ||||
Non-Departmental Revenue | ||||
1,817,376 | Capital charge | 2,160,841 | 1,925,942 | |
- | Change in other Crown assets and liabilities | 49,492 | - | |
603,341 | Dividends from State-Owned Enterprises and Crown Entities | 599,563 | 557,290 | |
114,227 | Interest revenue - NZDM | 355,264 | 131,548 | |
(446,133) | Other income, fair value and foreign exchange gains/(loss) - NZDM | 1(b) | (762,559) | 29,004 |
243,922 | Other revenue | 2 | 257,141 | 600,099 |
6,680 | Other income from associates | 10,603 | - | |
2,339,413 | Total Non-Departmental Revenue and Receipts | 2,670,345 | 3,243,883 | |
Non-Departmental Capital Receipts | ||||
(85,450) | Return of advances by International Monetary Fund members | 10,752 | - | |
162,913 | Loan and other repayments | 20,745 | 493,000 | |
142,015 | Kāinga Ora - Homes and Communities and Housing New Zealand Limited loan repayments |
218,593 | 217,663 | |
219,478 | Total Non-Departmental Capital Receipts | 250,090 | 710,663 | |
2,558,891 | Total Non-Departmental Revenue and Capital Receipts | 2,920,435 | 3,954,546 |
The accompanying notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the result of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2022.
Schedule of Expenses
for the year ended 30 June 2022
2021 Actual $000 |
Note | 2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
|
---|---|---|---|---|
Vote Finance | ||||
50,350 | Non-departmental output expenses | 48,554 | 50,593 | |
- | Non-departmental multi-category output expenses | - | 1,000 | |
3,147,611 | Debt servicing - NZDM | 1(a) | 4,012,174 | 3,154,380 |
4,998,120 | Non-departmental other expenses* | 6,545,848 | 827,780 | |
22,689 | Non-departmental multi-category other expenses | 18,581 | 177,837 | |
Re-measurements:** | ||||
(2,325,447) | Government Superannuation Fund revaluation: actuarial loss/(gain) | (1,615,028) | (215,663) | |
(28,100) | Change in National Provident Fund Defined Benefit Plan (A) Scheme provision under Crown guarantee | (29,839) | - | |
32,281 | International Financial Institution foreign exchange losses | - | - | |
1,655 | Other re-measurements | 1,334 | - | |
5,899,159 | Total Non-Departmental Expenses | 8,981,624 | 3,995,927 |
* 2022 includes $5,607 million (2021: $3,126 million) for a revaluation of the Large Scale Asset Purchases indemnity to the Reserve Bank of New Zealand. The Main Estimates process does not include estimations of future movements in financial asset and liability values.
** 2022 includes the impacts from actuarial gains on liabilities, reducing the net balance sheet obligation. The Main Estimates process does not include estimations of future movements in financial asset and liability values.
The accompanying notes form part of these financial schedules.
For a full understanding of the Crown's financial position and the result of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2022.
Schedule of Assets and Liabilities
as at 30 June 2022
2021 Actual $000 |
Note | 2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
|
---|---|---|---|---|
Current Assets | ||||
39,801,493 | Cash and cash equivalents | 33,969,353 | 31,640,952 | |
44,758 | Accounts receivable and prepayments | 198,926 | 8,383 | |
409,083 | Advances | 1,971,365 | 446,903 | |
8,912,076 | Marketable securities, deposits, and derivatives in gain - NZDM | 15,143,971 | 10,547,670 | |
49,167,410 | Total Current Assets | 51,283,615 | 42,643,908 | |
Non-Current Assets | ||||
4,592,278 | Advances | 2,870,814 | 4,419,752 | |
1,451,623 | Marketable securities, deposits, and derivatives in gain - NZDM | 342,434 | 320,000 | |
447,638 | Other share investments | 3 | 534,098 | 496,087 |
324,254 | Other equity-accounted investments | 352,322 | 310,739 | |
42,088 | Property, plant and equipment | 40,998 | 41,508 | |
6,857,881 | Total Non-Current Assets | 4,140,666 | 5,588,086 | |
56,025,291 | Total Non-Departmental Assets | 55,424,281 | 48,231,994 | |
Current Liabilities | ||||
7,610,570 | Crown balances with Westpac | 8,325,168 | 6,256,397 | |
40,292 | Payables and accrued expenses | 108,551 | 47,258 | |
11,346,100 | Borrowings - NZDM | 1(c) | 24,714,676 | 23,656,828 |
904,000 | GSF unfunded liability | 469,000 | 863,000 | |
3,533,938 | Provisions | 4,5,6,7,8,9 | 9,192,417 | 1,254,638 |
23,434,900 | Total Current Liabilities | 42,809,812 | 32,078,121 | |
Non-Current Liabilities | ||||
141,986,459 | Borrowings - NZDM | 1(c) | 147,462,560 | 157,031,976 |
10,134,695 | GSF unfunded liability | 8,296,083 | 10,982,860 | |
762,000 | National Provident Fund Defined Benefit Plan (A) Scheme unfunded provision | 660,000 | 709,100 | |
298,782 | Provisions | 4,5,6,7,9 | 282,181 | 98,986 |
153,181,936 | Total Non-Current Liabilities | 156,700,824 | 168,822,922 | |
176,616,836 | Total Non-Departmental Liabilities | 199,510,636 | 200,901,043 |
The accompanying notes form part of these financial schedules.
In addition, the Treasury monitors 14 State-Owned Enterprises, three mixed-ownership-model entities, 25 Crown entities, three Local Government Act companies and two other entities. The investment in these entities is consolidated in the Financial Statements of the Government on a line-by-line basis. The investment in these entities is not included in this Schedule.
For a full understanding of the Crown's financial position and the result of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2022.
Schedule of Commitments and Contingent Liabilities
as at 30 June 2022
The Treasury, on behalf of the Crown, has entered into non-cancellable contracts in relation to New Zealand House in London at a value of $0.804 million for the year ended 30 June 2022 (2021: $0.841 million).
A disclosure of the contingent liabilities incurred by the Crown is detailed in the Financial Statements of the Government for the year ended 30 June 2022.
Statement of Trust Monies
as at 30 June 2022
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
20,849 | Unclaimed money | 26,683 |
1 | Genesis Initial Public Offer Trust Account | - |
1 | Mercury (formerly Mighty River Power) Initial Public Offer Trust Account | - |
20,851 | Total Trust Account monies closing balance | 26,683 |
(a) Unclaimed money
The Trust Account was established pursuant to section 67 of the Public Finance Act, for the purposes of depositing money paid to the Crown under section 77 of the Trustee Act 1956.
The source of funds is principally estates of deceased persons where the beneficiaries cannot be traced. Funds are retained in the Trust Account for six years and are then transferred to the Crown as unclaimed money.
Details of funds held in the Trust Account are gazetted annually.
During the year, $6.109 million (2021: $2.223 million) of contributions were made to, and $0.307 million (2021: $0.443 million) of distributions were made from the Trust Account. Interest earned on the Trust Account for the year was $0.072 million (2021: $0.048 million), with expenditure incurred by the Trust Account of $0.041 million (2021: $0.040 million).
(b) Government share offer trust accounts
The Public Offer Trust Accounts created in 2013 to facilitate the partial sale of Meridian, Genesis and Mercury were closed during 2021/22.
Explanatory Notes to Non-Departmental Financial Schedules
Explanatory notes provide details of significant Treasury non-departmental expenditure and revenue variances in actual results in 2020/21 and 2021/22. All non-departmental balances are also included in the Financial Statements of the Government, with the exception of impairment of investments.
1 New Zealand Debt Management
The following sections cover explanations of NZDM's interest expense, revaluations and borrowing profile.
(a) Interest expense
2021 Actual $000 |
Interest expense | 2022 Actual $000 |
---|---|---|
2,312,050 | New Zealand Government Nominal Bonds | 2,173,415 |
782,056 | New Zealand Government Inflation-indexed Bonds | 1,758,789 |
24,289 | New Zealand Government Treasury Bills | 39,508 |
29,216 | Other | 40,462 |
3,147,611 | Total Interest Expense | 4,012,174 |
The debt servicing interest cost has increased from the prior year due to increasing weighted average yield cost and the increased average volume of Nominal Bonds and Inflation-indexed Bonds. The average interest rate paid was 2.54% (2021:2.28%).
(b) Other income, fair value and foreign exchange gains
Within this total, the net unrealised valuations on financial instruments moved from a net loss of $437.801 million to a net loss of $828.425 million. This is mainly driven by rising interest rates over the 2021/22 fiscal year, which has reduced the value of fixed rate investments and intra-entity loans and swaps.
(c) Borrowings
The outstanding borrowings increased significantly from the previous year due to the level of required debt issuance and there being no bond maturity in the current 2021/22 financial year. The maturing April 2023 nominal bond is now also classified as current, maturing within 12 months. The May 2051 nominal bond has been launched and issuance has increased steadily. The increase in Inflation-indexed Bonds outstanding is primarily driven by inflation indexation associated with higher CPI inflation. The increase in Other non-current liabilities includes the August 2021 International Monetary Fund (IMF) Special Drawing Rights Allocation which increased both Official Reserve Assets and Other Non-Current Liabilities by $2,500.000 million. The allocation was recognised as an Event after Balance Date in the previous year.
2021 Actual $000 |
Borrowings at amortised cost | 2022 Actual $000 |
---|---|---|
Current Liabilities | ||
- | New Zealand Government Nominal Bonds | 16,790,308 |
8,404,182 | New Zealand Government Treasury Bills | 3,881,388 |
121,203 | KiwiBonds | 124,739 |
1,331,358 | European Commercial Paper | 1,386,800 |
1,489,357 | Other | 2,531,441 |
11,346,100 | Total Borrowing - Current Liabilities | 24,714,676 |
Non-Current Liabilities | ||
117,856,140 | New Zealand Government Nominal Bonds | 119,053,674 |
22,213,221 | New Zealand Government Inflation-indexed Bonds | 23,913,758 |
60,759 | KiwiBonds | 27,735 |
1,856,339 | Other | 4,467,393 |
141,986,459 | Total Borrowing - Non-Current Liabilities | 147,462,560 |
The following table shows the movement of the total New Zealand Government Bonds (including both Nominal and Inflation-indexed Bonds).
2021 Actual $000 |
Movement in New Zealand Government Bonds | 2022 Actual $000 |
---|---|---|
103,001,156 | New Zealand Government Bonds opening balance | 140,069,361 |
24,850,000 | New Zealand Government Nominal Bonds - issued via tender | 16,600,000 |
1,050,000 | New Zealand Government Inflation-indexed Bonds - issued via tender | 360,000 |
18,250,000 | New Zealand Government Nominal Bonds - issued via syndication | 3,000,000 |
350,000 | Net - Non-market Bonds | 150,000 |
(11,059,000) | New Zealand Government Nominal Bonds matured | - |
3,627,205 | Net premium/discount and accrued interest | (421,620) |
37,068,205 | Net movement for the period | 19,688,380 |
140,069,361 | New Zealand Government Bonds closing balance | 159,757,741 |
2 Other Current Revenue
Reserve Bank of New Zealand return of surplus of $140.000 million (2021: nil) and net receipts on the Large Scale Asset Purchases indemnity of $63.021 million (2021: $195.084 million) are the main items in this total. For more information on the Large Scale Asset Purchase programme, refer to note 8.
3 International Financial Institutions (IFIs)
The Crown has share investments in the following International Financial Institutions: The Asian Development Bank; the International Bank for Reconstruction and Development; the International Finance Corporation; the Multilateral Investment Guarantee Agency; and the Asian Infrastructure Investment Bank. Included in the Schedule of Assets and Liabilities - other share investments, Treasury Crown has a total share investment balance of $534.098 million in International Financial Institutions (2021: $447.638 million).
A gain of $47.837 million on the revaluation of the International Financial Institutions' investment was recorded as a result of a New Zealand dollar foreign exchange rate movement (2021: a loss of $32.281 million). This revaluation gain is included in the Schedule of Revenue.
In addition, the investment in the International Bank for Reconstruction and Development increased by $10.134 million and the investment in the International Finance Corporation increased by $28.848 million as a result of the Crown's additional share subscription in the International Financial Institutions.
4 Ōtākaro Limited and Greater Christchurch Anchor Projects
The responsibilities for continuing the key Anchor Projects Programme and precincts in Christchurch, along with managing the Crown's property assets in the central city, are carried out by Ōtākaro Limited, a Schedule 4A entity of the Public Finance Act 1989.
In 2021/22 the Crown incurred $13.088 million in Ōtākaro Limited operating grant and financing expenses (2021: $10.828 million). The Crown also incurred $70.033 million relating to the Greater Christchurch Anchor Projects MCA (2021: $66.085 million).
There were no new transfers of assets to Ōtākaro Limited in the current and previous financial periods. Interest on existing vendor finance is charged on a base risk-free rate plus an interest margin. The interest margin represents a concessionary component of the loan and is funded via operating funding to Ōtākaro Limited.
Some of the land transferred to Ōtākaro Limited for the Anchor Projects, rather than being built on, will become new public spaces for the people of greater Christchurch and visitors to enjoy. Under a cost-sharing agreement signed by the Crown and Christchurch City Council, any land (or associated assets) for Anchor Projects that forms part of the ‘public realm' will vest in the Council, which will be responsible for its ongoing maintenance. The vesting dates vary, and some have yet to be determined. The Crown has recognised a write-down for the ‘public realm' land/assets that will be transferred to the Council at a future date. The vesting write-down balance at 30 June 2022 was $86.083 million (2021: $85.030 million). This included a vesting provision during the 2021/22 financial year of $1.053 million (2021: $1.052 million), which was recognised in the total Anchor Projects MCA expenses.
5 Southern Response Earthquake Services Limited (SRESL)
The Crown's commitment of financial support to SRESL for the ongoing settlement of its Canterbury earthquake claims is embodied in a Crown Support Deed. The Deed provides two key capital instruments: $500 million of convertible preference shares; and a $980 million Uncalled Ordinary Share facility. Under the terms of the second deed of amendment and restatement to the Crown support deed in January 2013, the Crown subscribed for 500 million uncalled ordinary shares, which had an issue price of $1 per share. In June 2016 the facility was increased by another 250 million uncalled ordinary shares, and by a further 230 million shares in 2017 to reflect the additional support necessary to enable the company to settle all its outstanding claims.
A Deed of Indemnity (DOI) was provided by the Crown to SRESL on 26 September 2018 in relation to certain litigation. The DOI was amended on 28 June 2019 to include any present or future proceeding or claim relating to a housing claim against SRESL that is agreed as covered by both SRESL and the Crown.
An addendum to the DOI in December 2020 further included and clarified that the indemnity covered, among other things, the company's financial exposure under both the Crown Package (the Package) and the Ross Representative Action. On 7 December 2020, Cabinet approved the Package to be offered to eligible policyholders who cash settled with SRESL prior to 1 October 2014. The Package is designed to offer payments to customers in similar situations to that of Mr and Mrs Dodd's, in whose favour the Court of Appeal upheld a High Court decision against SRESL in September 2020. The Package payments relate to certain professional fees, contingency and an allowance for interest.
A representative action was filed against SRESL on 25 May 2018, seeking to represent policyholders who had entered into full and final settlement agreements and cash settled with SRESL prior to 1 October 2014 (the ‘Ross Representative Action'). The Ross Representative Action was based on similar arguments and circumstances to the Dodds'. On 16 December 2021, the High Court granted Ross leave to discontinue their class action against SRESL. The subsequent settlement with SRESL enables eligible members of the Ross Representative Action to participate in the Package. The Crown's financial support to SRESL includes the liability for the Crown package.
For accounting and reporting purposes, the liability represented by the Package is regarded as an outstanding claims liability in respect of insurance contracts (NZ IFRS 4) and is reported in a manner consistent with an outstanding earthquake claims liability. The outstanding claims liability for Package payments is measured as the central estimate of the present value of expected future Package payments.
As at 30 June 2022, the Crown has recognised a liability for the total balance of the Uncalled Ordinary Share facility of which Southern Response had called 896 million shares (2021: 846 million). A non-current provision of $153.408 million represents financial obligations to SRESL under the Uncalled Ordinary Share facility and DOI (2021: $167.198 million). This provision has been calculated based on the negative shareholders' equity of SRESL, adjusted to exclude an insurance risk premium that is not relevant to the reporting of the Crown obligation. The liability provision involves a number of key assumptions, including the estimate of the direct costs to be incurred to settle claims, the inflation rate, the discount rate, and claims handling expenses. There is considerable uncertainty surrounding the projection and valuation of SRESL's outstanding claims liability and therefore considerable uncertainty in the provision recognised by the Crown to assist SRESL in settling these outstanding claims.
6 Stockton Acid Mine Drainage
The Crown agreed to assume liability for the acid mine drainage (AMD) remediation obligations arising from past coal mining at Stockton Mine, through a Deed of Commitment with Solid Energy New Zealand Limited and relevant councils in 2016/17. In 2017/18, a new mine owner became party to the Deed of Commitment through a Deed of Accession and Assumption. The new mine owner is carrying out AMD treatment and being reimbursed by the Crown.
A current provision of $3.058 million (2021: $7.850 million) and a non-current provision of $74.160 million (2021: $71.760 million) represents the discounted present value of the forecast cost of meeting the Crown's obligations for AMD remediation. This represents a long-term obligation under current treatment methods. The Treasury is exploring alternative treatment options to manage the Crown's future liability.
7 Business Finance Guarantee Scheme
In a response to the financial challenges brought about by COVID-19 restrictions on business activity the Minister of Finance announced in March 2020 that the Crown would provide an indemnity to qualifying financial institutions for 80% of the credit loss experienced from lending made under the terms of the Business Finance Guarantee Scheme. The initial Scheme was extended from a closing date of 30 September 2020 to 30 June 2021, and some other features were changed to broaden the reach of the Scheme. Businesses with turnover of up to $200 million per annum could apply for loans of up to $5.0 million for a maximum term of five years. The Crown accepted the credit risk share in order to encourage banks to provide new loans or refinance facilities to existing business customers.
The obligations under the Crown Deed of Indemnity are treated as a financial guarantee in accordance with PBE IFRS 9 Financial Instruments. The product offers financial certainty to banks and modifies their lending risk management metrics and capital requirements. The provision of $63.161 million (2021: $79.361 million) represents an assessment of the fair value of the guarantee. This was determined by applying the expected loss methodology prescribed within PBE IFRS 9. At 30 June 2021, when the Scheme availability closed, lending facilities totalling $2.861 billion had been established. At 30 June 2022, lending facilities total $2.456 billion.
The provision relied on key inputs for the probability of default, exposure at default, loss given default and loan credit staging. Movements in these factors led to a range of outcomes, with the selected provision level assessed as a balanced view.
8 Large Scale Asset Purchases Indemnity
The Reserve Bank of New Zealand (RBNZ) has responsibility for managing monetary policy. It commenced extensive purchasing of issued government bonds and Local Government Funding Agency bonds from the secondary market, as a mechanism in response to the economic impacts of COVID-19. On 22 March 2020 the Minister of Finance used his authority within the Public Finance Act to issue an indemnity that reimbursed the RBNZ for any losses incurred from the use of the Large Scale Asset Purchase programme. An initial holdings cap of $30 billion of assets was set. Revisions on 12 May 2020 and 9 August 2020 resulted in an indemnity covering RBNZ purchases of up to 60% of the Government Bonds on issue, 30% of the Government Inflation-indexed Bonds on issue and 30% of the Local Government Funding Agency bonds on issue. The indemnity is in place for assets purchased until 31 August 2022, with an ability for the Minister of Finance to give one day's notice of expiry after that date. The indemnity will apply through to the maturity dates of the bonds held at the time that the indemnity qualification period ceases. In July 2021 the RBNZ stopped purchasing further bonds for inclusion in the LSAP. In March 2022, the RBNZ announced that it would commence a programme of selling a portion of the portfolio back to Treasury, at the rate of $5 billion a year. Bond maturities during coming years will also contribute to the reduction of the portfolio.
The indemnity is a financial derivative within the definitions of PBE IFRS 9 and is required to be reported at fair value. At any point in time the value of the obligation is the difference between the market value of the assets held and the book value of the portfolio held by the RBNZ. A market value loss for the RBNZ is offset by an equal gain arising from the indemnity provided by the Crown. For the Crown, the indemnity value is the same as the net market value loss of the portfolio. At 30 June 2022, the RBNZ had purchased bonds with a book value of $60.0 billion (2021: $60.6 billion) and a market value of $51.3 billion (2021: $57.5 billion). The market value loss of $8.7 billion (2021: $3.1 billion) is recognised as the indemnity liability provision by the Crown.
9 Earthquake Commission - On-sold Canterbury Properties
On 15 August 2019 the Government announced a policy that allowed homeowners of on-sold, over-cap properties in Canterbury to apply for an ex-gratia payment to enable them to complete agreed earthquake repairs. Subject to certain criteria, the Crown will contribute to the over-cap costs of repairs to those homes. The application period closed on 14 October 2020. Assessment and payment experience has led to a revised forecast that the programme will continue until 2025. There is considerable uncertainty in evaluating the future cost of the policy as it depends on many situations, and as a result a number of significant judgements have been made to address this uncertainty. These significant judgements include the expected cost per claim and conversion from applications to settled claim assumptions. The final costs will not be known until the programme closes.
Within a range of $490 million to $605 million, the best estimate of the cost of the total on-sold programme is $532 million (inclusive of service fees of $36 million payable to EQC). After deducting payments made up to 30 June 2022 (inclusive of the $24.8 million invoiced for the three months ended 30 June 2022), the best estimate of the provision, inclusive of service fees, at 30 June 2022 is $357.5 million (2021: $316.3 million).
10 Events After Balance Date
There were no events subsequent to balance date that required adjustment to the Financial Statements or disclosure.
Independent Auditor's Report#
To the readers of the Treasury's Annual Report for the year ended 30 June 2022
The Auditor-General is the auditor of the Treasury (the Department). The Auditor-General has appointed me, David Gates, using the staff and resources of KPMG, to carry out, on his behalf, the audit of:
- the financial statements of the Department on pages 70 to 82, that comprise the statement of financial position, statement of commitments, statement of contingent liabilities and contingent assets as at 30 June 2022, the statement of comprehensive revenue and expense, statement of changes in equity, and statement of cash flows for the year ended on that date and the notes to the financial statements that include accounting policies and other explanatory information;
- the performance information prepared by the Department for the year ended 30 June 2022 on pages 15, 36, 38, 40 to 42, 44, 46 to 47, 57 to 58 and 60 to 62;
- the statements of expenses and capital expenditure of the Department for the year ended 30 June 2022 on pages 50 to 54; and
- the schedules of non-departmental activities which are managed by the Department on behalf of the Crown on pages 84 to 91 that comprise:
- the schedules of assets; liabilities; commitments; and contingent liabilities and assets as at 30 June 2022;
- the schedules of expenses; and revenue for the year ended 30 June 2022;
- the statement of trust monies for the year ended 30 June 2022; and
- the notes to the schedules that include accounting policies and other explanatory information
Opinion
In our opinion:
- the financial statements of the Department on pages 70 to 82:
- present fairly, in all material respects:
- its financial position as at 30 June 2022; and
- its financial performance and cash flows for the year ended on that date; and
- comply with generally accepted accounting practice in New Zealand in accordance with Public Benefit Entity Reporting Standards.
- present fairly, in all material respects:
- the performance information of the Department on pages 15, 36, 38, 40 to 42, 44, 46 to 47, 57 to 58 and 60 to 62:
- presents fairly, in all material respects, for the year ended 30 June 2022:
- what has been achieved with the appropriation; and
- the actual expenses or capital expenditure incurred compared with the appropriated or forecast expenses or capital expenditure; and
- complies with generally accepted accounting practice in New Zealand.
- presents fairly, in all material respects, for the year ended 30 June 2022:
- the statements of expenses and capital expenditure of the Department on pages 50 to 54 are presented fairly, in all material respects, in accordance with the requirements of section 45A of the Public Finance Act 1989
- the schedules of non-departmental activities which are managed by the Department on behalf of the Crown on pages 84 to 91 present fairly, in all material respects, in accordance with the Treasury Instructions:
- the assets; liabilities; commitments; and contingent liabilities and assets as at 30 June 2022; and
- expenses; and revenue for the year ended 30 June 2022; and
- the statement of trust monies for the year ended 30 June 2022.
Our audit was completed on 30 September 2022. This is the date at which our opinion is expressed.
The basis for our opinion is explained below. In addition, we outline the responsibilities of the Secretary to the Treasury and our responsibilities relating to the information to be audited, we comment on other information, and we explain our independence.
Emphasis of Matters
Without modifying our opinion, we draw attention to the following explanatory notes to the non-departmental financial schedules.
Uncertainties associated with the Earthquake Commission (EQC) on-sold over-cap provision
Note 9 outlines the high uncertainty surrounding the number and value of valid applications for on-sold over-cap repairs to Canterbury properties, and therefore, the high uncertainty in the EQC on-sold over-cap provision recognised by the Crown due to its policy to contribute to the cost of repairs of these properties.
Uncertainties associated with the provision for the Crown to assist in Southern Response Earthquake Services Limited (SRESL) in settling outstanding claims
Note 5 outlines the considerable uncertainty surrounding the projection and valuation of SRESL's outstanding claims liability, and therefore, the considerable uncertainty in the provision recognised by the Crown due to its commitment to provide financial support to SRESL in settling these outstanding claims. Note 5 also outlines that SRESL's possible obligation from legal claims and disputes, filed against them in respect of policyholders' claim settlements.
Basis for our opinion
We carried out our audit in accordance with the Auditor-General's Auditing Standards, which incorporate the Professional and Ethical Standards and the International Standards on Auditing (New Zealand) issued by the New Zealand Auditing and Assurance Standards Board. Our responsibilities under those standards are further described in the Responsibilities of the auditor section of our report.
We have fulfilled our responsibilities in accordance with the Auditor-General's Auditing Standards.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Responsibilities of the Secretary to the Treasury for the information to be audited
The Secretary to the Treasury is responsible on behalf of the Department for preparing:
- financial statements that present fairly the Department's financial position, financial performance, and its cash flows, and that comply with generally accepted accounting practice in New Zealand.
- performance information that presents fairly what has been achieved with each appropriation, the expenditure incurred as compared with expenditure expected to be incurred, and that complies with generally accepted accounting practice in New Zealand.
- statements of expenses and capital expenditure of the Department, that are presented fairly, in accordance with the requirements of the Public Finance Act 1989.
- schedules of non-departmental activities, in accordance with the Treasury Instructions, that present fairly those activities managed by the Department on behalf of the Crown.
The Secretary to the Treasury is responsible for such internal control as is determined is necessary to enable the preparation of the information to be audited that is free from material misstatement, whether due to fraud or error.
In preparing the information to be audited, the Secretary to the Treasury is responsible on behalf of the Department for assessing the Department's ability to continue as a going concern. The Secretary to the Treasury is also responsible for disclosing, as applicable, matters related to going concern and using the going concern basis of accounting, unless there is an intention to merge or to terminate the activities of the Department, or there is no realistic alternative but to do so.
The Secretary to the Treasury's responsibilities arise from the Public Finance Act 1989.
Responsibilities of the auditor for the information to be audited
Our objectives are to obtain reasonable assurance about whether the information we audited, as a whole, is free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit carried out in accordance with the Auditor-General's Auditing Standards will always detect a material misstatement when it exists. Misstatements are differences or omissions of amounts or disclosures, and can arise from fraud or error. Misstatements are considered material if, individually or in the aggregate, they could reasonably be expected to influence the decisions of readers, taken on the basis of the information we audited.
For the budget information reported in the information we audited, our procedures were limited to checking that the information agreed to the Department's information on strategic intentions/statement of intent.
We did not evaluate the security and controls over the electronic publication of the information we audited.
As part of an audit in accordance with the Auditor-General's Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. Also:
- We identify and assess the risks of material misstatement of the information we audited, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- We obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Department's internal control.
- We evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Secretary to the Treasury.
- We evaluate the appropriateness of the reported performance information within the Department's framework for reporting its performance.
- We conclude on the appropriateness of the use of the going concern basis of accounting by the Secretary to the Treasury and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Department's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the information we audited or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Department to cease to continue as a going concern.
- We evaluate the overall presentation, structure and content of the information we audited, including the disclosures, and whether the information we audited represents the underlying transactions and events in a manner that achieves fair presentation.
We communicate with the Secretary to the Treasury regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Our responsibilities arise from the Public Audit Act 2001.
Other information
The Secretary to the Treasury is responsible for the other information. The other information comprises the information included on pages 3 to 14, 16 to 35, 37, 39, 43, 45, 48 to 49, 55 to 56, 59, 63 to 69, 83 and 95 to 98, but does not include the information we audited, and our auditor's report thereon.
Our opinion on the information we audited does not cover the other information and we do not express any form of audit opinion or assurance conclusion thereon.
Our responsibility is to read the other information. In doing so, we consider whether the other information is materially inconsistent with the information we audited or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on our work, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Independence
We are independent of the Department in accordance with the independence requirements of the Auditor-General's Auditing Standards, which incorporate the independence requirements of Professional and Ethical Standard 1: International Code of Ethics for Assurance Practitioners issued by the New Zealand Auditing and Assurance Standards Board.
For the year ended 30 June 2022 and subsequently, a Member of the Department's Risk and Audit Committee is a member of the Auditor-General's Audit and Risk Committee. The Auditor-General's Audit and Risk Committee is regulated by a Charter that specifies that it should not assume any management functions. There are appropriate safeguards to reduce any threat to auditor independence, as the member of the Auditor-General's Audit and Risk Committee has no involvement in, or influence over, the audit of the Department.
Other than in our capacity as auditor, we have no relationship with, or interests, in the Department.
David Gates
KPMG
On behalf of the Auditor-General
Wellington, New Zealand
Minister of Finance's Report on Non-Departmental Appropriations
What has Been Achieved with Non-Departmental Appropriations#
Although the following information is presented in the same document as the Treasury's Annual Report, it does not form part of the Treasury's Annual Report for the year ended 30 June 2022 (including reporting by the Treasury on appropriations for that year).
Six appropriations in this report meet the requirement, set out in the supporting information to the 2021/22 Estimates or 2021/22 Supplementary Estimates, for information on certain non-departmental appropriations to be reported by the Minister of Finance:
- Refinancing of Kāinga Ora - Homes and Communities and Housing New Zealand Limited Debt
- Christchurch Regeneration Acceleration Facility
- Payments and Expenses in Respect of Guarantees and Indemnities PLA
- COVID-19: Capital Injections to Airways New Zealand
- COVID-19: Loans to Air New Zealand
- Venture Capital Fund
Refinancing of Kāinga Ora - Homes and Communities and Housing New Zealand Limited Debt#
What is intended to be achieved with this appropriation
This appropriation is intended to enable Kāinga Ora - Homes and Communities and Housing New Zealand Limited to refinance their loans.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates $000 |
2022 Supp. Estimates $000 |
|
---|---|---|---|---|
141,434 | Capital expenditure | 217,361 | 217,387 | 217,687 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 | Performance for 2021/22 |
---|---|---|
Refinancing will be undertaken in accordance with the agreed appropriation limits | Achieved | Achieved |
Christchurch Regeneration Acceleration Facility#
What is intended to be achieved with this appropriation
This appropriation is intended to achieve the timely delivery of Crown funding to the Christchurch City Council, to allow it to deliver capital works for Christchurch's regeneration.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates $000 |
2022 Supp. Estimates $000 |
|
---|---|---|---|---|
8,180 | Expenditure | 49,451 | 120,000 | 188,007 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 |
Performance for 2021/22 |
---|---|---|
Crown funding is transferred in a timely way | Achieved | Achieved |
Crown funding for the Canterbury Multi-Use Arena is transferred as called for by the Council in its quarterly funding requests | Achieved | Achieved |
Payments and Expenses in Respect of Guarantees and Indemnities PLA#
What is intended to be achieved with this appropriation
This appropriation is intended to achieve the recognition of expenses associated with Crown guarantees and indemnities.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates $000 |
2022 Supp. Estimates $000 |
|
---|---|---|---|---|
3,157,279 | Expenditure | 5,706,383 | 93 | 2,032,859 |
Actual 2021/22 expenditure is significantly higher than the Supplementary Estimates due to the impact that rapidly rising interest rates during 2022 had on the value of the indemnity in place with the Reserve Bank of New Zealand, relating to the Large Scale Asset Purchases programme.
What was achieved in this appropriation
Performance measure | Standard for 2021/22 | Performance for 2021/22 |
---|---|---|
Payments are made in accordance with the terms of the agreement for notified claims | Achieved | Achieved |
COVID-19: Capital Injections to Airways New Zealand#
What is intended to be achieved with this appropriation
This appropriation is intended to fund the Crown's contribution to Airways New Zealand in response to the impacts of COVID-19.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates $000 |
2022 Supp. Estimates $000 |
|
---|---|---|---|---|
- | Expenditure | 47,000 | 50,000 | 75,000 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 | Performance for 2021/22 |
---|---|---|
Payments are made in accordance with the terms of the agreement for notified claims | Achieved | Achieved |
COVID-19: Loans to Air New Zealand#
What is intended to be achieved with this appropriation
This appropriation is intended to fund the Crown's contribution to Air New Zealand Limited in response to the impacts of COVID-19.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates $000 |
2022 Supp. Estimates $000 |
|
---|---|---|---|---|
350,000 | Expenditure | 500,000 | 1,150,000 | 500,000 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 | Performance for 2021/22 |
---|---|---|
Payments are made in accordance with the terms of the agreement for notified claims | Achieved | Achieved |
Venture Capital Fund MYA#
What is intended to be achieved with this appropriation
This appropriation is intended to deepen early-stage capital markets and enable New Zealand's venture capital market to become more self-sustaining.
Financial information
2021 Actual $000 |
2022 Actual $000 |
2022 Main Estimates Unaudited $000 |
2022 Supp. Estimates Unaudited $000 |
|
---|---|---|---|---|
23,404 | Total Appropriation | 57,147 | 40,080 | 57,106 |
Non-Departmental Capital Expenditure | ||||
23,404 | Expenditure | 57,147 | 40,080 | 57,106 |
2021 Actual $000 |
2022 Actual $000 |
|
---|---|---|
Commenced: 1 May 2020 | ||
Expires: 30 April 2024 | ||
259,500 | Original Appropriation | 259,500 |
- | Cumulative Adjustments | - |
259,500 | Total Adjusted Appropriation | 259,500 |
- | Cumulative Actual Expenditure as at 1 July | 23,404 |
23,404 | Current-year Actual Expenditure | 57,147 |
23,404 | Cumulative Actual Expenditure as at 30 June | 80,551 |
236,096 | Appropriation Remaining as at 30 June | 178,949 |
What was achieved in this appropriation
Performance measure | Standard for 2021/22 | Performance for 2021/22 |
---|---|---|
Venture Capital Fund capital is committed to venture capital funds, which are further supported by matching private capital | Achieved | Achieved |