Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

I will come to New Zealand first and then I will go to the UK. It is a contractual guarantee in New Zealand. It is implemented through a deed of guarantee entered into by Her Majesty the Queen in the right of New Zealand, acting by and through the Minister of Finance on 11 November. The appropriation for guarantees is already in public finance legislation in New Zealand. Section 65ZG of the Public Finance Act 1989 already provides appropriation for any guarantees entered into by the Minister of Finance.

In the UK, it is a contractual obligation. The guarantee was implemented through a deed of guarantee entered into by the Commissioners of Her Majesty’s Treasury on 13 October of this year. The appropriation is in banking legislation. An appropriation is available in legislation. The appropriate provision was put in place in the temporary legislation enacted to nationalise Northern Rock. Because of the circumstances around the probable collapse of the Northern Rock bank in the UK—I think that started in January—and the issues there, they actually had a broader remit, which they have used. So they have the appropriation authority.