Our recommendations

At its peak, the value of deposits covered by the Crown Retail Deposit Guarantee Scheme was $133 billion. This is nearly twice the amount the Government spends in a year, or about two thirds of the value of New Zealand’s total annual production (gross domestic product).

An initiative of this size and complexity necessitated formal and comprehensive management disciplines, complete with detailed planning and appropriate governance, management, and reporting frameworks.

We make the following recommendations because other large and complex initiatives necessitating rapid implementation will eventuate:

1. We recommend that the Treasury prepare a project planning framework to help the Treasury to implement large and complex initiatives. The framework should include an approach to crisis management planning and strong internal governance processes to ensure that appropriate senior managers are actively involved in the strategic direction of important aspects of policy implementation. These processes should include clear accountabilities, roles, and responsibilities for deciding and implementing policy.
2. We recommend that, for large and complex initiatives managed by the Treasury, the Treasury put in place a monitoring, escalation, and reporting framework that is agreed with the Minister of Finance and refined over time. This framework should require clear documentation of important implementation decisions and processes and provide for suitable formal reporting of results and emerging risks within the Treasury as well as to the Minister of Finance and other stakeholders.
3. We recommend that the Treasury carry out a formal post-project review after it implements any significant policy initiative. The review should be timely, independent, and sponsored by a senior official or committee within the Treasury. The findings of the review should be discussed and implemented where appropriate.
4. We recommend that the Treasury and the Reserve Bank of New Zealand document the analysis and thinking by the Treasury during its consideration of how to deal with South Canterbury Finance Limited. This could take the form of a framework for dealing with distressed institutions. The distressed institutions framework could set out possible courses of action for dealing with an institution, including deterrent processes, actions to take in the event of failure, the roles and responsibilities of regulatory agencies, and the communications that need to occur between agencies.