2005 Funding Agreement

This agreement was ratified by Parliament on 23 June 2005.

Between the Minister of Finance and the Governor of the Reserve Bank of New Zealand.

1. This Agreement is between the Minister of Finance and the Governor of the Reserve Bank pursuant to section 159 of the Reserve Bank of New Zealand Act 1989 ("the Act") and supersedes the Agreement signed on 16 May 2000 and varied on 27 March 2004.
2. The Agreement takes effect from the date that it is ratified by Parliament.
   
   It is agreed that:
3. The amount of the Bank's income to be applied in meeting the operating expenses incurred in carrying out the functions and exercising the powers specified in section 159(1) of the Act is the sum of:
   1. $39,000,000 for the year commencing 1 July 2005
      $34,000,000 for the year commencing 1 July 2006
      $41,000,000 for the year commencing 1 July 2007
      $41,000,000 for the year commencing 1 July 2008
      $43,000,000 for the year commencing 1 July 2009 and
   2. the amount of income actually earned by the Bank in the applicable year in respect of the following activities:
      Provision of settlement account services (ESAS);
      1. Property management rental;
      2. Collectors' currency;
      3. Scrapping obsolete coins (including related hedging activities);
      4. Registry services;
      5. OIC secretariat;
      6. Hedging of operating expenses.
4. Pursuant to section 160(d) of the Act, the activities specified in paragraph 3(b) are included within the amounts specified in paragraph 3(a) on the basis of operating expenses less income.
5. Pursuant to section 159 (1)(f) of the Act, operating expenses incurred under this agreement shall include operating expenses incurred in providing settlement banking, government banking and securities registry services as defined in sections 32, 34 and 35 of the Act.
6. Pursuant to section 159(1)(g) of the Act, operating expenses included within this Agreement shall include operating expenses incurred in providing secretariat services to the Overseas Investment Commission.

Hon Dr Michael Cullen
Minister of Finance
18 April 2005

Dr Alan Bollard
Governor of the Reserve Bank
20 April 2005