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Disclaimer: The information on this web site is issued by the New Zealand Debt Management Office (NZDMO) for informational purposes. It does not contain and is not an invitation or offer to buy or sell securities. Each page on this web site must be read in conjunction with the disclaimer at http://www.nzdmo.govt.nz.

Legal Framework

Page updated 13 Dec 2007

This section outlines the authority under which transactions are entered into and the statutory and contractual basis of the management of NZDMO and the conduct of NZDMO personnel.

Legal Authority to Borrow and Service Debt

Nearly all the functions of NZDMO are fulfilled through the exercise of statutory powers contained in the Public Finance Act 1989.In general, those powers are vested in the Minister, but many of them have been delegated to the Secretary to the Treasury, with further sub-delegation to specified personnel within NZDMO.

The Public Finance Act establishes the legal framework for the use of public financial resources. That includes authorities and controls relating to:

  • the operation of bank accounts;
  • the investment of public money;
  • the raising, repayment, and conversion of loans and the issuing of securities;
  • the giving of guarantees and indemnities; and
  • the entering into of swaps and other financial arrangements.

The Public Finance Act gives the Minister the power to borrow in the name of the Crown.The power to borrow cannot be delegated.

The Public Finance Act contains a permanent appropriation for the payment of all principal and interest in respect of any loan to the Crown.It also contains a permanent appropriation for the payment of expenses associated with the raising and management of loans and the issuing and management of securities. The payment of principal and interest in respect of any debt that is assumed by the Crown, but is not in the Crown's name, must be authorised through the appropriation procedures contained in the Public Finance Act.

Delegation of Responsibility

The Minister may delegate to the Secretary to the Treasury, pursuant to the State Sector Act 1988, all the Minister’s functions or powers under any Act, except the power to raise a loan under the Public Finance Act 1989. Pursuant to the State Sector Act, those delegated powers may be sub-delegated, with the Minister’s consent, to specified personnel of Treasury and exercised in accordance with any policies approved by the Minister, the Secretary to the Treasury, the Deputy Secretary, Macro Economic Group, or the Treasurer, NZDMO.

Organisational Basis

The State Sector Act 1988 establishes the minimum standards and general obligations that apply to Treasury employees. Specific terms and conditions of employment are outlined in Treasury’s personnel policies and individual employment agreements. All Treasury employees are required to sign a declaration of confidentiality and avoidance of conflicts of interest.

The State Sector Act 1988, Treasury's corporate policies and NZDMO’s guidelines for ethical behaviour provide the framework for NZDMO's behaviour in the market place.

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