TABLE OF CONTENTS
2.	Summary
4.	Selected Statistical and Financial Data
5.	New Zealand
5.	Area and Population
5.	Form of Government
6.	Social Framework
6.	The Treaty of Waitangi
7.	Foreign Relations
7.	Membership in International Economic Organisations
8.	The Economy of New Zealand
8.	Introduction
8.	Background
9.	The 1990s
10.	Recent Developments and Outlook
11.	Fiscal Policy
12.	Public Debt
13.	National Accounts
15.	Prices and Costs
17.	Labour Markets
18.	Industrial Structure and Principal Economic Sectors
27.	External Sector
27.	External Trade
33.	Foreign Investment Policy
34.	Balance of Payments
35.	Foreign-Exchange Rates and Overseas Reserves
36.	Supervision Of The Financial Sector
36.	The Reserve Bank of New Zealand
36.	Financial Sector Structural Developments
37.	Business Law Environment
39.	Monetary Policy
41.	Interest Rates and Money and Credit Aggregates
42.	Public Finance and Fiscal Policy
42.	Public Sector Financial System
42.	Public Sector Financial Management
45.	Current Fiscal Position
46.	Statement of Financial Position
47.	Taxation
48.	Government Enterprises
48.	State-Owned Enterprises
48.	Crown Entities
49.	Performance of Government Enterprises
51.	Public Debt
51.	Debt Management Objectives
51.	Debt Record
52.	Summary of Public Debt
56.	Tables and Supplementary Information


SUMMARY
New Zealand is a parliamentary democracy situated in the
South Pacific. It has a population of
3.8 million in a country similar in size to Japan.  New
Zealand has a market economy with
sizeable manufacturing and services sectors complementing
a highly efficient export-oriented
agricultural sector.  Energy-based industries, forestry,
mining, horticulture and tourism have
expanded rapidly over the past two decades.  Pastoral
agriculture and commodity exports remain
important to the country but the significance of the
service sector relative to primary production
and manufacturing continues to grow.

For New Zealand, much of the focus of the last 17 years
has been towards establishing an open,
modern and stable economy.  The economy has changed from
being one of the most regulated in the
OECD to one of the most deregulated.  The Labour-Alliance
Coalition Government elected in November
1999 aims to foster the transformation of New Zealand into
a leading knowledge-based economy with
high skills, high employment and high value-added
production.

In the area of macroeconomic policy, the Reserve Bank Act
(1989) and the Fiscal Responsibility
Act (1994) set the framework.

The focus of monetary policy is on maintaining price
stability.  A Policy Targets Agreement
between the Governor of the Reserve Bank and the Minister
of Finance sets out the specific
targets for maintaining price stability.  At the end of
1999, a new Agreement was signed at the
initiative of the new Government.  The key change was to
add a clause stating that, in implementing
monetary policy, the Reserve Bank should seek to avoid
unnecessary instability in output, interest
rates and the exchange rate.  The changes to the Agreement
do not, however, change the way monetary
policy is conducted but rather formalise the way monetary
policy has evolved in New Zealand.  The
target for annual inflation to be between 0% and 3%
remains unchanged.

An independent review of the operation of monetary policy,
commissioned by the Government and
released in February 2001, found that monetary policy in
New Zealand is currently entirely
consistent with the best international practice of
flexible inflation targeting.

The New Zealand economy grew strongly in the mid-1990s.
Over the first half of 1998, however,
the economy slipped into recession with the twin "shocks"
of the Asian economic downturn, and a
summer drought occurring at the same time the economy was
slowing.  The fall in activity was
short-lived with the economy recovering through the second
half of 1998 and 1999.  The economy
grew by 3.9% in calendar 1999 and 3.7% in 2000 despite a
pause in growth in the first half of the
year.

In the context of global developments, the economy
performed strongly in 2001, although quarterly
growth slowed in the September quarter after very strong
growth in June.  The external sector,
and agriculture in particular,  has played an important
role in growth over recent years.  Two good
growing seasons and relatively favourable world commodity
prices have combined with a low exchange
rate to produce strong growth in farm incomes.  The gains
in farm incomes and increased household
incomes on the back of employment and wage growth have
been feeding into a pick-up in the domestic
economy.

The uncertainty around the outlook for the international
economy has increased the risks to the New
Zealand economic outlook.  However, recent interest-rate
cuts and a competitive exchange rate,
together with household incomes and migration inflows,
will all provide some support to growth going
forward.

Inflation peaked at 4.0% in the year to 31 December 2000
with the rise in world oil prices and some
flow through from the lower exchange rate.  Annual
inflation declined through 2001 as these factors
unwound.  Throughout 2001, the Reserve Bank reduced the
Official Cash Rate as the deteriorating global
economy reduced the outlook for New Zealand growth and
inflation.

While New Zealand had been running current account
deficits of 5% to 7% of GDP during the latter half
of the 1990s, the trend has been improving over the last
year.  For the year ended 30 September 2001,
the current account deficit stood at 3.4% of GDP.
Continuation of this trend is expected in the short
run but weaker world demand could see some reversal over
2002/03.  Over the last decade, New Zealand's
current account deficit has predominantly been a story of
payments to non-residents, who have built up
substantial direct investment in New Zealand.  While the
trade balance has generally been in surplus,
the deficit on the investment income balance has been
equivalent to around 7% of GDP.

On the fiscal front, the 1990s have seen a consolidation
of the country's fiscal position with the Fiscal
Responsibility Act ensuring that fiscal policy is prudent
and transparent.  The Government remains
committed to maintaining a sound fiscal position.

In 2000/01 a surplus on the Government operating balance
of $1,409 million was achieved.  This compares
with a surplus of $1,449 million in 1999/2000 and $1,777
million in 1998/99.  The 2000/01 surplus, although
lower than the previous year, reflects an improvement to
operations when liability valuation movements
are excluded.  An operating surplus of $985 million is
forecast for 2001/02.

The Government's fiscal policy approach is based on an
assessment of the current state of government
finances, the emergence of future spending pressures,
particularly those associated with ageing, and
the potential impact of shorter-term influences.  The
approach involves:

o	running operating surpluses on average over the economic
cycle sufficient to meet the requirements
for contributions to pre-fund the future costs of publicly
provided retirement income (New Zealand
Superannuation) and ensure consistency with the debt
objective referred to in the next point;

o	keeping gross Government debt below 30% of GDP, on
average over the economic cycle;

o	accumulating financial assets to assist with the funding
of future New Zealand Superannuation costs;

o	keeping expenses around current levels of about 35% of
GDP.

At 30 June 2001, New Zealand's gross direct public debt
was $38.4 billion, or 34.1% of estimated GDP.
At the same date, public sector foreign-currency debt was
$6.0 billion, and interest charges
on foreign-currency debt were $405 million in 2000/01.
The Government has no net foreign-currency debt.



		SELECTED STATISTICAL AND FINANCIAL DATA

Statistical Data

								1997		1998		1999		2000		2001
										(dollar amounts in millions)
Gross Domestic Product at Current
Prices(1)(2)	$96,911	$100,007	$100,856	$105,705	$111,932
Annual % Increase (Decrease) in Real
GDP(1)(2)(3)	3.1%	1.9%		0.4%		4.6%		2.6%
Population (thousands)(1)				3,728.8	3,771.2	3,798.8	3,817.9	3,837.1
Unemployment Rate (4)					6.6%		7.6%		6.9%		6.1%		5.2%
Change in Consumer Price Index(5)			1.1%		1.7%		(0.4%)	2.0%		3.2%
Exchange Rate (6)						0.6876	0.5101	0.5327	0.4699	0.4148
90 day Bank Bill rate (7)				7.0%		9.2%		4.7%		6.9%		5.8%
5 Year Government Loan Stock Rate(7)		7.0%		6.9%		6.2%		6.9%		6.5%
Terms of Trade Index(2)(8)				1,076		1,076		1,072		1,064		1,167
Current Account Deficit as a % of
GDP(1)(2)	(6.2%)	(5.6%)	(4.3%)	(7.0%)	(4.8%)

Government Finance (9)
Year ended 30
June			1996/97	1997/98	1998/99	199/00	2000/01	2001/02(10)
Total Revenue				34,778	35,581	36,357	35,526	39,492	40,290
Total Expenses				32,953	34,211	35,825	36,171	38,186	39,603
Revenue less Expenses			1,825		1,370		532		355		1,306		687
SOE and CE surpluses/(deficits)	83		1,164		1,245		1,094		103		298
Operating Balance				1,908		2,534		1,777		1,449		1,409		985
As % of GDP					2.0%		2.6%		1.8%		1.4%		1.2%		0.8%

Net Direct Domestic Borrowing		(2,181)	(406)		(190)		(1,027)	961
Net Overseas Borrowing			(3,373)	420		(893)		(158)		(474)

Direct Public Debt

Internal Funded
Debt			24,769.0	22,665.4	25,644.7	25,318.0	26,204.5	-
Internal Floating
Debt			7,683.6	9,378.9	5,980.0	5,500.0	5,675.0	-
External Debt				4,916.8	6,704.6	5,810.1	6,575.8	6,518.5	-
Total Direct Public
Debt		37,369.4	38,748.9	37,434.8	37,393.8	38,398.0	-

(1)	Year ended 31 March
(2)	2000 data provisional.  Prior years' data revised.
(3)	Production based - chain volume series expressed in
1995/96 prices.  Base = 100.
(4)	June quarter, seasonally adjusted.  Prior years' data
revised.
(5)	Annual percentage change, June quarter.
(6)	US$ per NZ$ monthly average for June.
(7)	June monthly average.
(8)	Year ended 30 June.  Base:  Average of 10 years ended 30 June
1989 = 1000.
(9)	This table is prepared in accordance with New Zealand Generally
Accepted Accounting Practice (GAAP).
(10)	2001/02 Budget revisions announced 18 December 2001.

Note:	The above data is presented in a standardised format to
facilitate comparisons with previous years.  In some cases, later
data can be found in the relevant text or tables.


NEW ZEALAND
Area and Population
New Zealand is situated in the South Pacific Ocean, 6,500 kilometres
(4,000 miles) south-southwest of Hawaii and 1,900 kilometres (1,200
miles) to the east of Australia. With a land area of 268,000 square
kilometres (103,000 square miles), it is similar in size to Japan or
Britain.  It is comprised of two main adjacent islands, the North
Island and South Island, and a number of small outlying islands.
Because these islands are widely dispersed, New Zealand has a
relatively large exclusive maritime economic zone of 3.1 million
nautical square kilometres.

Over half of New Zealand's total land area is pasture and arable
land, and more than a quarter is under forest cover, including 1.7
million hectares of planted production forest.  It is predominantly
mountainous and hilly, with 13% of the total area consisting of
alpine terrain, including many peaks exceeding 3,000 metres (9,800
feet).  Lakes and rivers cover 1% of the land.  Most of the rivers
are swift and seldom navigable, but many are valuable sources of
hydro-electric power.  The climate is temperate and relatively mild.

New Zealand's resident population at 30 June 2001 is estimated at
3,837,000.  With an estimated population of 1,193,800 people, the
Greater Auckland Region is home to 31 out of every 100 New Zealanders
and is the fastest growing region in the country.

New Zealand has a highly urbanised population with around 77 percent
of the resident population living in urban entities with 10,000 or
more people.  Over half of all New Zealanders live in the four main
urban areas of Auckland (1,119,900), Hamilton (171,700), Wellington
(346,700) and Christchurch (343,700).

The population is heavily concentrated in the northern half of the
North Island (50.6%), with the remaining population fairly evenly
spread between the southern half of the North Island (24.1%) and the
South Island (24.2%).


Form of Government
New Zealand is a sovereign state with a democratic parliamentary
government based on the Westminster system. Its constitutional
history dates back to the signing of the Treaty of Waitangi in 1840,
when the indigenous Maori people ceded sovereignty over New Zealand
to the British Queen.  The New Zealand Constitution Act 1852 provided
for the establishment of a Parliament with an elected House of
Representatives.  Universal suffrage was introduced in 1893.  Like
Canada and Australia, New Zealand has the British monarch as titular
Head of State.  The Queen is represented in New Zealand by the
Governor-General, appointed by her on the advice of the New Zealand
Government.

As in the United Kingdom, constitutional practice in New Zealand is
an accumulation of convention, precedent and tradition, and there is
no single document that can be termed the New Zealand constitution.
The Constitution Act 1986 has, however, updated, clarified and
brought together in one piece of legislation the most important
constitutional provisions that had been enacted in various statutes.
It provides for a legislative body, an executive and administrative
structure and specific protection for the judiciary.

Legislative power is vested in Parliament, a unicameral body
designated the House of Representatives.  It currently has 120
members, who are elected for three-year terms through general
elections at which all residents over 18 years of age are entitled to
vote.  Authority for raising revenue by taxation and for expenditure
of public money must be granted by Parliament.  Parliament also
controls the Government by its power to pass a resolution of no
confidence or to reject a Government proposal made a matter of
confidence, in which event the Government would be expected to resign.

The executive Government of New Zealand is carried out by the
Executive Council.  This is a formal body made up of the Cabinet and
the Governor-General, who acts on the Cabinet's advice.  The Cabinet
itself consists of the Prime Minister and his/her Ministers, who must
be chosen from among elected Members of Parliament.  Each Minister
supervises and is responsible for particular areas of Government
administration.  Collectively, the Cabinet is responsible for all
decisions of the Government.

As a result of a referendum held in conjunction with the 1993
election, New Zealand has changed from a "First Past the Post" (FPP)
system of electing Members of Parliament to a "Mixed Member
Proportional" (MMP) system of proportional representation.  MMP is
similar to the German Federal system of election to the Lower House.
Under MMP, the total number of seats each party has in Parliament is
proportional to that party's share of the total list vote.  Around
half of all Members of Parliament are elected directly as electorate
representatives as under the FPP system. The remaining members are
chosen by the parties from party lists. This change was put in place
for the 1996 election. There is provision for the review of the MMP
system in 2002.

At the last six general elections, the distribution of seats in
Parliament among the principal parties was as follows:

			1984	1987	1990	1993	1996	1999
Labour Party	56	57	29	45	37	49
National Party	37	40	67	50	44	39
Alliance		-	-	-	2	13	10
ACT			-	-	-	-	8	9
Green Party		-	-	-	-	-	7
New Zealand First	-	-	-	2	17	5
United		-	-	-	-	1	1
Other			2	-	1	-	-	-
TOTAL			95	97	97	99	120	120

Following the general election in November 1999, seven political
parties were represented in Parliament; the Labour Party, the
National Party, the Alliance, ACT, the Green Party (previously a
member of the Alliance), New Zealand First and United.

The Labour Party and the Alliance formed a minority Coalition
Government in December 1999.  The Green Party has pledged to support
the Coalition on confidence and supply.  The Right Honourable Helen
Clark, the Leader of the Labour Party became Prime Minister and the
Honourable Jim Anderton, leader of the Alliance, became Deputy Prime
Minister.

The judicial system in New Zealand is based on the British model.
By convention and the Constitution Act 1986, the judiciary is
independent from the executive.


Social Framework
New Zealand has a high degree of social and political stability and
a modern social welfare system which includes universal entitlement
to primary and secondary education and  subsidised access to health
services for all residents.  The population is mainly European (72%),
with New Zealand Maori (15%), Pacific Islanders (6%), Asians (5%) and
other ethnic groups making up the remainder.  There is a high
incidence of intermarriage among these groups.  The majority of
Europeans are of British descent, while the New Zealand Maori are of
the same ethnic origin as the indigenous populations of Tahiti,
Hawaii and several other Pacific Islands.  In recent years there has
been an increasing level of immigration from Asian countries.

The principal social services financed by the Government are health
and education, income support for low and middle income families, and
a range of benefits and pensions, including New Zealand
Superannuation and the unemployment, single parent, sickness and
invalid benefits.  The publicly-funded social services are augmented
by privately-financed schools, health services, pension plans and
philanthropic services.


The Treaty of Waitangi
The Treaty of Waitangi is regarded as a founding document of New
Zealand.  First signed at Waitangi on 6 February 1840, the Treaty is
an agreement between Maori and the British Crown and affirms for
Maori their status as the indigenous people of New Zealand.

The Treaty comprises three articles.  The first grants to the Queen
of England the right to "govern" New Zealand while the second article
guarantees Maori possession of their lands, forests, fisheries and
other resources.  The third and final article gives Maori all the
citizenship rights of British subjects.  There are outstanding claims
by Maori that the Crown has breached the Treaty, particularly the
guarantees under the second article, which are for Maori and the
Crown to resolve.

Since 1992, the Government has developed processes and polices to
enable the Crown and Maori to settle any Treaty of Waitangi claim
relating to events before September 1992.  So far, 13 claims
totalling $596 million have been settled.  Negotiations are
continuing on other claims.




Foreign Relations
New Zealand foreign policy is one of constructive international
engagement.  At the heart of this engagement lies a strong sense of
national interest.

A central strategic foreign policy objective is to enhance New
Zealand's position as a successful, open and secure trading nation.
Exports of goods and services are equivalent to around 33% of New
Zealand's GDP.  Trade is essential if the nation is to prosper.  New
Zealand is therefore committed to a multi-track trade policy:
multilateral trade liberalisation through the World Trade
Organisation (WTO); regional co-operation and liberalisation through
active membership of such fora as the Asia Pacific Economic
Cooperation (APEC), and bilateral trade arrangements such as the
Closer Economic Relations (CER) agreement with Australia.  More
recently, New Zealand has signed a Closer Economic Partnership with
Singapore which came into effect on 1 January 2001.  Similar
arrangements with other economies are under negotiation or active
consideration.

New Zealand is also determined to meet its responsibilities and
advance its interests as a constructive member of the world
community.  International problems require international responses,
and the rule of international law and the maintenance of stability
are vital if states are to prosper.  New Zealand is therefore active
in international organisations such as the United Nations and its
agencies.  It is involved in issues such as sustainable development,
disarmament, peacekeeping and peacemaking, good government
initiatives, and overseas development assistance.  Two New
Zealanders, the Right Honourable Mike Moore and the Right Honourable
Don McKinnon, have been appointed to lead two key international
organisations, the World Trade Organisation and the Commonwealth
Secretariat, respectively.

Asia-Pacific regional linkages remain at the core of New Zealand's
political and economic interests.  The countries of APEC take more
than 70% of New Zealand's exports.  They provide 70% of New Zealand's
tourist visitors, and 80% of New Zealand's investment.  As well as
these economic connections, people-to-people links between New
Zealand and the wider Asia-Pacific region are extensive.  Both within
and outside the region, New Zealand's interests are well diversified.
Australia, the European Union, North America and East Asia each take
between 15% and 30% of New Zealand's exports.

Just as the New Zealand economy has been opened to the world, so new
relationships have been developed and more traditional relationships
have been deepened.  New Zealand's trade and foreign policy has
extended the boundaries of engagement, recognising the intersection
between global integration and the pursuit of national interest.


Membership in International Economic Organisations
New Zealand is a long-standing member of the Organisation for
Economic Cooperation and Development (OECD), the International
Monetary Fund (IMF), and the International Bank for Reconstruction
and Development (World Bank).

Other major international economic organisations of which New
Zealand is an active member include the International Finance
Corporation, the International Development Association, the Asian
Development Bank and the European Bank for Reconstruction and
Development.  New Zealand is also a contracting party to the World
Trade Organisation.


THE ECONOMY OF NEW ZEALAND:  OVERVIEW
Introduction
New Zealand has a mixed economy which operates on free market
principles.  It has sizable manufacturing and service sectors
complementing a highly efficient agricultural sector.  The economy is
strongly trade-oriented, with exports of goods and services
accounting for around 33% of total output.

New Zealand's economic performance has improved significantly over
the 1990s.  Far-reaching structural reforms commenced in the mid-
1980s aimed at improving the microeconomic efficiency of the economy
while simultaneously bringing greater stability to the macroeconomy.
Following a prolonged period of poor economic performance in the wake
of a long-term decline in New Zealand's terms of trade, coupled with
inadequate policy responses, the mid-1990s saw output recover
strongly.

However, as a small trading nation, New Zealand's economy is
inevitably linked to the fortunes of the world economy.  The slowdown
in key Asian trading partners during the latter part of 1997 and
through 1998 took a toll on economic activity.  In addition, a
drought affected large parts of the country over the 1997/98 and
1998/99 summers.  These shocks occurred when the economy was already
in a slowing phase.  The end result saw the New Zealand economy
contract over the first half of 1998.

Since then, the economy has seen a broad-based recovery.  The second
half of 1999 saw growth significantly above trend.  A reversal of
some of the factors leading to this growth led to the economy slowing
markedly in the first half of 2000, and actually contracting in the
second quarter.   However, looking to the medium term, the reforms of
the past 17 years mean that New Zealand should be on a growth track
that is more sustainable than in the past.  The Labour-Alliance
Coalition Government elected in November 1999 sees New Zealand's
future lying in the development of a knowledge-based economy.  It
sees its task as stimulating the innovation, infrastructure and
skills development needed to underpin this.

Background
New Zealand emerged from World War II with an expanding and
successful agriculture-based economy.  In the 1950s and 1960s, a
period of sustained full employment, GDP grew at an average annual
rate of 4%.  Agricultural prices remained high, due in part to a boom
in the wool industry during the Korean War.  However, even during
this period there were signs of weakness.  In 1962, the Economic and
Monetary Council advised the Government that between 1949 and 1960
New Zealand's productivity growth had been one of the lowest amongst
the world's highest earning economies.

In the late 1960s, faced with growing balance of payments problems,
successive Governments sought to maintain New Zealand's high standard
of living with increased levels of overseas borrowing and
increasingly protective economic policies.

Problems mounted for the New Zealand economy in the 1970s.  Access
into key world markets for agricultural commodities became
increasingly difficult.  The sharp rises in international oil prices
in 1973 and 1974 coincided with falls in prices received for exports.
As in many OECD countries, policies in New Zealand were principally
aimed at maintaining a high level of economic activity and employment
in the short term.  High levels of protection of domestic industry
had greatly undermined competitiveness and the economy's ability to
adapt to the changing world environment.  The combination of
expansionary macro policies and industrial assistance led to
macroeconomic imbalances, structural adjustment problems and a rapid
rise in government indebtedness.  After the next major shift in oil
and commodity prices in 1979 and 1980, New Zealand's position
deteriorated further.

From around 1984 onwards, the direction of economic policy in New
Zealand turned away from intervention toward the elimination of many
forms of government assistance.  On the macroeconomic level, policies
have aimed at achieving low inflation and a sound fiscal position
while microeconomic reforms have been intended to open the economy to
competitive pressures.

The reforms included the floating of the exchange rate; abolition of
controls on capital movements; the ending of industry assistance; the
removal of price controls; deregulation across a number of sectors of
the economy; corporatisation and privatisation of state-owned assets;
and labour market legislation aimed at facilitating more flexible
patterns of wage bargaining.

The adjustment to this new economic framework took time and is
ongoing.  During the mid-to late 1980s, the economy virtually
stagnated and then entered recession in the early 1990s as necessary
fiscal consolidation took place and a cyclical downturn occurred in
key trading partners .


The 1990s
From the end of 1992 until late 1997, the New Zealand economy
enjoyed continuous growth.  This growth was rapid by past standards
with annual growth reaching 5% to 7% in 1993-94.

The improvement in competitiveness associated with a substantial
depreciation of the New Zealand dollar, along with stronger trading
partner growth and a recovery from a period of structural reform,
provided a lot of the initial impetus.  Export activity helped
support investment growth and, in addition, economic restructuring in
the 1980s had made a large part of the existing capital stock
obsolete.  This made for a strong rebound in investment to meet the
demands of a growing economy.

Gathering momentum in the economy also saw household spending
strengthen, with annual growth in consumer spending peaking at 6% to
7% in late 1994/early 1995.  In part, buoyant consumer spending
reflected a replacement cycle for consumer durables following a
sustained period of weak or negative real income growth in the late
1980s and early 1990s.  Rapid employment growth and falling
unemployment, along with a strong housing market and the associated
wealth effects, also underpinned household spending.  The
unemployment rate fell from a peak of 10.9% in late 1991 to 6.0% at
the end of 1996.  A large net inflow of migrants, peaking at around
30,000 a year in 1996, also provided a boost to activity.

Against this background, pressures on the economy's capacity
developed.  In order to contain inflationary pressures, monetary
conditions were tightened over the period from 1994 to late 1996.
Associated with this was a rapid rise in the exchange rate.  Short-
term interest rates rose to around 10%.  Nevertheless, inflation
picked up and the then official target range for annual underlying
inflation of 0% to 2% was breached over 1995/96.

In the context of tighter monetary conditions and declining net
migration flows, the economy slowed markedly from the heights of
1994.  Overall economic growth on an annual average basis slowed to
around 2.5% to 3% over most of 1996 and 1997.

As the economy slowed over 1997 and 1998, it was adversely affected
by the Asian economic crisis, which reduced demand for exports, and
two consecutive droughts, which reduced agricultural and related
production.  Asia, including Japan, takes around 30% of New Zealand's
merchandise exports and is also an important market for tourism.
These events and tight monetary policy resulted in the economy
contracting by 1.3% over the first half of 1998.

The economy recovered quickly following the fall in activity seen in
the first half of 1998.  While quarterly growth rates were somewhat
volatile over 1999, the economy recorded growth of 3.9% in 1999 as a
whole, with quarterly rates well above trend in the second half of
the year.

Growth over 1999 and 2000 was broad-based.  Consumer spending,
particularly housing investment, was supported by lower interest
rates and an improving labour market.  Primary exports recovered from
the effects of two years of drought and the impact of the Asian
economic crisis.  Manufacturing exports posted solid growth while a
recovery in visitor numbers from Asia added impetus to tourism
activity.

In the 1991-1994 period, the current account deficit remained low by
historical New Zealand standards, remaining in the range of around 1%
to 2.5% of GDP.  From the mid-1990s, the current account position
deteriorated to a deficit of around 6.7% in the year to 31 December
1999.  This was caused by a turnaround in the merchandise trade
balance, which went from surplus into deficit, and a further increase
in the deficit on the international investment income balance to
around 7% of GDP.

This investment income deficit reflects the servicing of the
country's large net external liability position, which at 30
September 2001 stood at around 76% of GDP.  The country's
indebtedness is, in the main, a result of private sector decisions
reflecting both a demand for investment funds from the business
sector and a demand from households for funds to finance house
purchases.

New Zealand's strong banking system, sound fiscal position and
floating exchange rate, together with the role of foreign direct
investment in building up external liabilities, means that concerns
about the size of the current account deficit need to be kept in
perspective.  However, a large current account deficit does make any
economy vulnerable to changes in financial market sentiment.

Following a period of large and persistent fiscal deficits, New
Zealand's fiscal position improved over the first part of the 1990s,
assisted by fiscal consolidation and the economic recovery.  In
1990/91, the country was running a fiscal deficit equivalent to
nearly 3% of GDP.  With the surplus recorded in 2000/01, New
Zealand's fiscal position has now been in surplus for 8 years.


Recent Developments and Outlook
Growth slowed in the first half of 2000 with the unwinding of some
one-off factors that had boosted growth in the second half of 1999.
These factors included construction activity associated with the
Americas Cup regatta and spending in preparation for Y2K.  Business
and consumer confidence also fell sharply, weakening domestic demand.
Activity in the second half of 2000 picked up, although remaining
moderate overall.  However, employment growth was strong in the
second half of the year, and the unemployment rate fell to 5.6% in
December.

The first half of 2001 saw a recovery in business and consumer
confidence and growing momentum in the domestic economy.  A good
agricultural season, combined with relatively high commodity prices
and a competitive exchange rate, saw gains in farm incomes.  Together
with gains in household incomes on the back of the strong labour
market and stimulatory monetary conditions, this helped to boost
consumer spending and to provide support to the housing market.  A
rebound in business investment also contributed to average annual
growth of 2.5% in the year to 30 September 2001.

This increasingly broad-based growth has taken place despite the
backdrop of a slowing world economy.  The tragic events of 11
September 2001 have created greater uncertainty about the magnitude
and duration of the downturn in the United States, which had
previously been widely expected to be nearing the bottom of the
cycle.  While New Zealand appears to have been favourably "out of
sync" with the slowdown in the world economy in the first half of
2001, growth slowed in the September quarter.  Growth is expected to
be only moderate in the short term as export demand weakens and
increased uncertainty feeds through into domestic confidence and
activity.

However, compared with the last two periods of slower trading
partner growth (1990/91 and 1997/98), monetary conditions are at more
stimulatory levels, commodity prices in New Zealand dollar terms are
at high levels and the labour market is in a strong position with
solid real income growth through 2000 and the first half of 2001.
The fiscal position is also in healthy shape with continued operating
surpluses and low debt levels.

Monetary conditions have generally become easier since the start of
1997 as the exchange rate has trended down.  Following a period of
rising interest rates through the period 1998 to 2000, the Reserve
Bank has lowered its Official Cash Rate from 6.5% in late 2000 to
4.75% in November 2001.

Inflation peaked at 4.0% in the year to 31 December 2000, due mainly
to high world oil prices and the fall in the exchange rate.
Inflation declined throughout 2001, falling to 1.8% in the year to 31
December 2001, and is expected to continue to track back towards the
centre of the Reserve Bank's 0% to 3% target band.

The current account deficit peaked at 7.0% in the year to March 2000
before improving to 3.4% in the year to September 2001.  One-off
imports (including the import of a naval frigate) and rising oil
prices were part of the reason for the size of the deficit in 1999
and the first half of 2000.  On an annual basis, the deficit is
expected to decline further going into the first half of 2002 on the
back of a better trade performance before weakening in 2002/03 as
weaker world demand feeds through to the current account.  The
investment income deficit is expected to remain large.

A moderation in growth in the short term, followed by an upturn on
the back of a pick-up in global growth, is expected to be the most
likely economic outlook for New Zealand.  There are substantial risks
and uncertainties surrounding this outlook given the greater
uncertainty around the global economy.  A deeper and more protracted
global downturn will have a more pronounced impact on New Zealand,
impacting on exports and continuing to dampen business and consumer
confidence.  On the other hand, a stronger pick-up in the global
economy in 2002 could see the New Zealand economy follow a stronger
growth path.

Fiscal Policy
Prudent Fiscal Management:  The Fiscal Responsibility Act
In 1994, the Government enacted the Fiscal Responsibility Act.  The
Act is intended to assist in achieving consistent good quality fiscal
management over time.  Good quality fiscal management should enable
the Government to make a major contribution to the economic health of
the country and be better positioned to provide a range of services
on a sustained basis.

The Act requires the Crown's financial reporting to be in accordance
with New Zealand Generally Accepted Accounting Practice.  The primary
fiscal indicators are the operating balance, debt and net worth.

The Fiscal Responsibility Act requires the Government to pursue its
policy objectives in accordance with the principles of responsible
fiscal management set out in the Act.  These include:

	reducing debt to prudent levels to provide a buffer against future
adverse events

	maintaining, on average, operating balance once prudent debt
levels are reached i.e., the Government is to live within its means
over time, with some scope for flexibility through the business cycle

	achieving and maintaining levels of net worth to provide a buffer
against adverse events

	managing the risks facing the Crown

	pursuing policies that are consistent with a reasonable degree of
predictability about the level and stability of future tax rates.

Key Fiscal Indicators
Operating Balance:  Following a prolonged period of fiscal deficits,
New Zealand achieved surpluses in 1993/94.  The initial improvement
in the operating balance from 1993/94 onwards reflected a growing
economy, increasing tax revenues and firm expense control.
Subsequent reductions in the operating balance reflect two rounds of
tax reductions, lower nominal economic growth, which reduced tax
revenue growth, and changes in accounting policy.

Government operating expenses have been reduced as a percentage of
GDP from 41.6% in 1992/93 to 34.5% in 2000/01.  Expenses have been
controlled with output budgeting, accrual reporting and decentralised
cost management.

In 2000/01, the operating balance was $1.4 billion.  Operating
surpluses are expected to continue over the forecast period.
Forecasts for 2001/02, 2002/03, 2003/04, 2004/05 and 2005/06 are $1.0
billion, $1.8 billion, $2.9 billion, $3.7 billion and $3.9 billion
respectively.  Expenses as a percentage of GDP are expected to fall
to around 32.4% by 2005/06.

The operating balance result of $1.4 billion for 2000/01 includes
liability valuation movements.  If such valuation movements are
excluded, the operating balance is $2.1 billion, reflecting a steady
increase over the last three years.

Net debt:  Net debt has fallen from 49% of GDP in 1992/93 to 18.1%
in 2000/01.  Debt repayments have been financed from operating
surpluses and asset sales proceeds.  Looking forward, net debt is
projected to remain steady at around 18% of GDP.  From 2001/02
onwards, it is assumed that surpluses will contribute to building up
financial assets to begin pre-funding future superannuation costs
rather than solely paying down debt.  These assets do not form part
of net debt.  The cumulative contributions toward pre-funding
(excluding ongoing revenue earned on the contributions) reach around
3% of GDP in 2003/04.  These assumptions are indicative only because
the mechanism and extent of pre-funding have not been finalised.

Net worth:  New worth increased from -$7.7 billion in 1992/93 to
$9.9 billion in 1997/98.  In 1998/99, net worth fell to around $6
billion.  The fall reflected the recognition of the net future costs
of already accepted Accident Compensation Corporation claims ($6.1
billion) partly offset by the $1.8 billion operating surplus.  Net
worth then increased again to $11.5 billion in 2000/01.  This
improvement reflects the ongoing operating surplus plus revaluations
of physical assets.  With forecast operating surpluses, net worth is
projected to reach $24.7 billion in 2005/06.


Public Debt
Prior to March 1985, successive Governments had borrowed under a
fixed exchange-rate regime to finance the balance of payments
deficit.  Since the adoption of a freely floating exchange-rate
regime, Governments have undertaken new external borrowing only to
rebuild the nation's external reserves and to meet refinancing needs.

Direct public debt increased by a net amount of $1,004 million
including swaps between 1 July 2000 and 30 June 2001.  This increase
consisted of a net increase in internal debt of $1,061 million and a
net decrease in external debt of $57 million.

The Government achieved its objective of zero net foreign-currency
debt in September 1996 following the sale of Forestry Corporation of
New Zealand for $1.6 billion.

Government gross direct debt amounted to 34.1% of GDP in the year
ended June 2001, down from 35.5% the previous year.

The proceeds from the domestic bond programme will be used to
finance maturing domestic term debt and to finance the forecast cash
deficit during 2001/02 and to partially prefund the 2002/03 borrowing
requirement.




National Accounts
In the year to 30 September 2001, the New Zealand economy recorded
average annual growth of 2.5%.  Growth was very strong in the June
2001 quarter following two quarters of below trend growth but slowed
again in the September 2001 quarter.

The following table shows Gross Domestic Product and Gross National
Expenditure in nominal terms for the last five March years.

Gross Domestic Product and Gross National Expenditure

Year ended 31 March		1997		1998		1999		2000		2001(1)
					(dollar amounts in millions)
Compensation of Employees	41,786	42,815	43,183	44,462	46,756
Net Operating Surplus		29,427	30,259	30,617	33,117	35,934
Consumption of Fixed Capital	12,865	13,441	13,928	14,262	15,205
Indirect Taxes			13,153	13,491	13,466	14,129	14,775
Less Subsidies			320		316		298		330		353
Gross Domestic Product		96,911	100,007	100,856	105,705	111,932

Final Consumption Expenditure
	General Government	17,041	18,566	18,924	20,109	20,248
	Private			57,488	59,567	61,775	64,470	67,253
Physical Increase in stocks	779		855		(143)		1,404		1,098
Gross Fixed Capital Formation	21,110	20,678	20,066	21,019	21,477
Gross National Expenditure	96,418	99,666	100,622	107,002	110,076

Exports of Goods and Services	27,511	28,534	30,378	33,151	41,065
Less Imports of Goods and
  Services				27,018	28,193	30,144	34,448	39,209
Expenditure on Gross Domestic
Product				96,911	100,007	100,856	105,705	111,932

Real GDP(2)				103.1		105.0		105.5		110.3		113.2
Annual % increase in real GDP	3.1%		1.9%		0.4%		4.6%		2.6%

(1)	Provisional.  Prior years' data revised.
(2)	Production based - Chain-volume series expressed in 1995/96
prices.  Base = 100



The following table shows Gross Domestic Product by major industries
at constant 1995/96 prices.

Gross Domestic Product by Production Group (1)

Year ended 31 March			1997		1998		1999		2000		2001		2001% of Total
(dollar amounts in millions)
Finance, Insurance and Business
Services					23,665	24,444	25,133	25,357	25,881	24.7
Manufacturing				16,232	16,443	15,642	16,329	16,731	15.9
Personal and Community
Services					10,791	11,131	11,477	12,002	12,553	12.0
Transport and Communication		7,902		8,251		8,767		9,696		10,476	10.0
Wholesale Trade				7,247		7,388		7,519		8,310		8,531		8.1
Retail, Accommodation,
Restaurants	6,953		7,044		7,085		7,461		7,621		7.3
Agriculture					5,547		5,526		5,479		5,766		6,018		5.7
Government Administration and
Defence					4,263		4,224		4,201		4,137		4,174		4.0
Construction				4,030		4,059		3,702		4,159		3,777		3.6
Fishing, Forestry, Mining		2,841		2,892		2,787		2,845		2,878		2.7
Electricity, Gas and Water		2,163		2,119		2,152		2,084		2,193		2.1

Gross Domestic Product			95,516	97,284	97,682	102,251	104,982	100.0

Primary Industries			8,390		8,419		8,264		8,610		8,893		8.5
Goods Producing Industries		22,425	22,609	21,509	22,557	22,698	21.6
Services Industries			60,823	62,480	64,164	66,842	69,069	65.8

(1)	2001 data provisional.  Prior year's data revised.


Prices and Costs
New Zealand experienced a substantial improvement in inflation
performance during the 1990s relative to previous decades.  Annual
inflation as measured by the Consumers Price Index (CPI) remained
below 2% from the December 1991 quarter through to the September 1994
quarter before rising to around 4% in mid-1995 as the economy
experienced rapid growth and monetary policy was tightened.
Inflation subsequently fell to -0.5% in the year to September 1999.

The main reason for the sharp increase in CPI inflation during the
period from September 1994 to June 1995 was a significant lift in
home mortgage interest rates.  Up until recently, New Zealand
included home mortgage interest rates in the CPI, unlike most other
industrialised countries.  Over this period, interest rates made up
around 6.5% of the CPI, with home mortgage interest comprising around
5.2% of the CPI.

In December 1997, CPI ex Credit Services (CPIX) replaced the Reserve
Bank's measure of underlying inflation as the target for monetary
policy.  CPIX, which was constructed by the official statistical
agency, excludes interest rates.  The September 1999 quarter saw the
introduction of a new definition for the way in which the CPI is
measured.  The main feature of this is that interest rates and land
prices have been excluded from the CPI.  This definition of the CPI
is more in line with that used in most industrialised countries.  The
newly defined CPI has now become the Reserve Bank's inflation target.

Annual CPI inflation increased to 4.0% in the December 2000 quarter,
recording quarterly increases of 0.7% in the March and June quarters,
1.4% in the September quarter and 1.2% in December.  Inflation
outturns over 2000 were heavily influenced by higher oil prices, the
decline in the exchange rate and price increases in tobacco and
cigarettes related to an increase in excise duty.  Over 2001,
inflation has declined, with quarterly outturns of -0.2% in the March
quarter, 0.9% in the June quarter, and 0.6% in each of the September
and December quarters.  The 0.2% decline in the March 2001 quarter
was largely related to a decline in income-related rents for Housing
New Zealand tenants.  Collectively, these outturns have lowered
inflation to 1.8% in the year ended December 2001.

Exchange-rate and world commodity price developments have also been
the main factors behind sharp increases in producer prices.  The
annual increase in output prices from the September 2000 quarter to
the September 2001 quarter was 4.7%.  However, the annual increase in
input prices over the same period was 6.2%.

The following table shows on a quarterly basis the Terms of Trade
Index, the Producers Price Index, the Consumers Price Index and the
Ordinary Time Wage Rate Index and, in each case, the percentage
change over the same quarter for the previous year.



Prices and Costs

			Terms of Trade		Producers Price		Consumers Price	Labour Cost
				Index(1)		Index (2) (3)		Index (4)		Index (5)
1997	March			1083	(1.7)		  992	0.4		  986	1.8		1070	2.2
	June			1076	(0.9)		  990	0.1		  987	1.1		1076	2.5
	September		1066	(3.8)		  995	0.5		  992	1.0		1082	2.5
	December		1085	0.4		1000	0.9		  997	0.8		1086	2.2

1998	March			1103	1.8		  996	0.4		  999	1.3		1090	1.9
	June			1076	0.0		1003	1.3		1004	1.7		1097	2.0
	September		1090	2.3		1003	0.8		1009	1.7		1102	1.8
	December		1080	(0.5)		1001	0.1		1001	0.4		1105	1.7

1999	March			1062	(3.7)		  994	(0.2)		  998	(0.1)		1110	1.8
	June			1072	(0.4)		1001	(0.2)		1000	(0.4)		1113	1.5
	September		1106	1.5		1016	1.3		1004	(0.5)		1118	1.5
	December		1078	(0.2)		1032	3.1		1006	0.5		1122	1.5

2000	March			1048	(1.3)		1046	5.2		1013	1.5		1126	1.4
	June			1064	(0.7)		1060	5.9		1020	2.0		1132	1.7
	September		1111	0.5		1101	8.4		1034	3.0		1135	1.5
	December		1113	3.2		1142	10.7		1046	4.0		1140	1.6

2001	March			1171	11.7		1130	8.0		1044	3.1		1146	1.8
	June 			1167	9.7		1146	8.1		1053	3.2		1152	1.8
	September		1179	6.1		1169	6.2		1059	2.4		1158	2.0
	December		NA	NA		NA	NA		1065	1.8		NA	NA

(1)	Base: Average of 10 years ended June 1989 = 1000.
(2)	Base: December quarter 1997 = 1000
(3)	All industry inputs.
(4)	Base: June quarter 1999 = 1000.
(5)	Base: March quarter 1993 = 1000.



Labour Markets

New Zealand's labour market has been substantially deregulated in
recent years.  In 1987 and 1988, the Labour Relations Act and the
State Sector Act introduced greater flexibility in the private and
state-sector labour markets.  More comprehensive deregulation took
place with the passage of the Employment Contracts Act in May 1991.
This legislation allowed employers and employees considerable freedom
to determine the terms of their employment relationship.  Employees
were not required to join a union, and were able to choose whether to
bargain individually or collectively.  Similarly, employers were free
to decide how they would bargain e.g., at the workplace level, at the
firm level or in conjunction with other employers.

The present Government has replaced the Employment Contracts Act
with the Employment Relations Act 2000.  It aims to promote
collective bargaining and to recognise the role of unions.  It also
requires the parties to employment relationships - unions, individual
employees and employers - to deal with each other in good faith.
However, union membership continues to be voluntary, and employees
continue to be able to negotiate on an individual basis with
employers.  Collective bargaining is promoted in various ways, such
as providing that only unions and employers can be parties to
collective agreements, allowing unions access to workplaces to
recruit, and giving them the right to strike in pursuit of multi-
employer contracts.  The legislation also promotes mediation to
assist the early resolution of workplace disputes.

Employment growth was very strong in the 1994 to mid-1996 period
with annual growth running at between 4% and 5.5%, leading to the
unemployment rate falling from a peak of nearly 11% in 1991 to around
6% in 1996.  Employment growth then fluctuated in line with the
moderation in output growth and the recession in 1998.  However,
despite this, the unemployment rate remained around the 6% to 8%
range, peaking at 7.7% in December 1998.  Since then, employment has
grown steadily and the unemployment rate fell to 5.2% in the
September 2001 quarter.  This is the lowest rate since June 1988.
The period of employment growth has also seen the participation rate
steadily rise.


INDUSTRIAL STRUCTURE AND PRINCIPAL ECONOMIC SECTORS
Primary Industries

The agricultural, horticultural, forestry, mining, energy and
fishing industries play a fundamentally important role in New
Zealand's economy, particularly the export sector.

Agriculture and Horticulture

The agricultural sector, comprising the land, labour, capital and
services involved in getting agricultural and horticultural products
to the farm gate, constitutes around 7% of GDP.  The manufacture of
primary foods accounts for a further 3% of GDP.  However, downstream
activities, including transportation, rural financing and retailing,
that are related to agricultural production mean that it plays an
even greater part in the New Zealand economy.

This importance was highlighted during the 1997/98 and 1998/99
summers, when drought conditions adversely affected agricultural
production, dragging down export and GDP growth.  Since then,
climatic conditions have been generally more favourable resulting in
record milk-solids production and record average lamb carcass
weights.

Pastoral Based Production

The changing makeup of pastoral based production over the past 10
years, reflecting the relative returns of different farming types,
has been mirrored by the changes in stock numbers:

o	Dairy cattle numbers have increased from 3.4 million in June 1990
to an estimated 4.7 million in June 2001, reflecting the good returns
for dairy products over this time.

o	Deer numbers remained stable at around 1.4 million through the mid
1990s, and have climbed to an estimated 2.6 million in June 2001.

o	Beef cattle numbers peaked at around 5.2 million in June 1995, but
the two years of drought precipitated some reduction in numbers.
There were an estimated 5.0 million beef cattle in June 2001.

o	Sheep numbers have reduced from around 65 million during the late
1980s to an estimated 44 million in June 2001.

The Ministry of Agriculture & Forestry's Outlook for 2001 to 2005
forecasts that over this period the value of meat and dairy exports
is expected to increase while wool exports will decline marginally.

Horticultural Production

Horticultural crops have become increasingly important, with the
principal crops being apples and kiwifruit.  Other significant export
crops include wheat, barley, peas, maize, oats, nashi pears,
berryfruit, flowers, squash, onions and other fresh fruit and
vegetables.  The value of horticultural exports is estimated to be
$2.0 billion for the year ended March 2001.

The Ministry of Agriculture & Forestry's Outlook for 2001 to 2005
forecasts that over this period the value of kiwifruit exports should
remain steady while the value of pipfruit and other horticultural
exports will increase.

Producer Board Reform

Exports of three major agricultural products (dairy, apples and
pears, and kiwifruit) have until recently been exclusively controlled
through statutory producer boards.

Developments in Apple and Pear and Kiwifruit

In the case of apples and pears and kiwifruit, this situation
changed early in 2000 when the two boards became companies (ENZA and
ZESPRI) with shares held by growers.  The two companies still enjoyed
exclusive export rights.  Separate regulatory boards were established
to oversee the companies and license alternative exporters in limited
circumstances.

In May 2001, following extensive consultation, the Minister of
Agriculture announced the deregulation of the New Zealand pipfruit
industry effective from 1 October 2001.  Legislation to effect these
changes was enacted in September 2001.  This means that ENZA has lost
its single desk export powers and will have to compete with other
exporters for pipfruit supply.

The kiwifruit industry is currently prospering and there is little
pressure for further regulatory reform.

Developments in Dairy

Over the last few years, the dairy industry has been characterised
by mergers of a number of processing co-operatives, which has served
to accelerate the momentum for regulatory reform.  In December 2000,
the Kiwi and Dairy Group co-operatives, which together processed
approximately 97% of New Zealand's dairy exports, announced their
agreement to merge and integrate the operations of the Dairy Board
into a new co-operative company structure.

The Dairy Industry Restructuring Act was passed into law in late
September 2001 and the merger of the Fonterra Co-operative Group took
place in October 2001.  As a consequence of the merger, Fonterra is
New Zealand's largest company with approximately 20,000 employees and
assets of $11 billion.

The new regulatory environment has removed many of the constraints
on dairy industry performance created by the previous statutory
environment.  In particular, the removal of the export monopoly of
the Dairy Board is expected to facilitate the emergence of new
competition and new strategies in the dairy industry.


Non-Trading Boards

There are also producer boards for deer products, pork, meat and
wool, but these do not trade products, focusing instead on promotion.
These boards are funded by compulsory levies.




The following table shows sales of the principal categories of
agricultural products for the years indicated, and as a percentage of
total sales for 2001.

Gross Agricultural Production(1)

Year ended 31 March
					1997		1998		1999		2000		2001		2001
															% of
															Total)
dollar amounts in millions)
Dairy products			3,323		3,210		3,204		3,625		5,028		32.9
Cattle				951		1,260		1,274		1,537		1,834		12.0
Sheep and lambs			1,293		1,364		1,185		1,318		1,759		11.5
Agricultural services		1,129		1,120		1,114		1,294		1,364		8.9
Sales of live animals		710		1,145		920		835		1,149		7.5
Fruit and nuts			731		685		907		910		1,091		7.1
Wool					652		696		605		619		693		4.5
Vegetables				543		579		682		621		648		4.2
Crops and seeds			413		340		355		332		335		2.2
Value of livestock change	121		(31)		38		152		290		1.9
Other horticultural products	219		231		275		279		281		1.8
Non-farm income			187		190		186		161		197		1.3
Deer					156		133		145		147		206		1.3
Other products n.e.s		142		173		178		169		187		1.2
Pigs					133		138		131		129		147		1.0
Poultry and eggs			97		94		95		93		95		0.6
Total output			10,800	11,327	11,294	12,221	15,304	100.0
Less intermediate consumption	(5,571)	(6,166)	(5,934)	(6,139)	(7,311)
Agricultural contribution to
GDP					5,229		5,161		5,361		5,950		8,007
					5.4%		5.2%		5.3%		5.7%		7.2%

(1)	1999, 2000 and 2001 data provisional.


Forestry

The contribution of the forestry sector to New Zealand's GDP is
estimated at 3.5% for the year ended 31 March 2001.  Forestry is the
basis of an important export industry with more than 67% of wood from
the planted production forests eventually being exported in a variety
of forms, including logs, wood chips, sawn timber, panel products,
pulp and paper and further manufactured wooden products including
wooden furniture.  For the year ended June 2001, the value of exports
of forestry products was $3,309 million (f.o.b.), 10.4% of New
Zealand's total merchandise exports.  The largest markets for
forestry exports are Japan (25% by value) and Australia (22%).  The
Republic of Korea (14%), the United States (13%), China (6%) and
Taiwan (3%) and a range of Asian countries are important developing
markets for New Zealand's forestry exports.

New Zealand's dependence on the growing Asian region was highlighted
by recent events in Asia.  As the 1997-1998 Asian economic crisis
took hold, New Zealand's forestry exports declined and, by the end of
1998, total forestry exports had fallen in volume by 4% compared to
the previous year.  However, as many Asian countries began to emerge
from the turmoil caused by the crisis, so too did New Zealand's
forestry exports, which were 16% higher in volume for the year to
June 2000.  More recently, weak construction activity in Australia
and the slowing world economy has seen forestry export volumes fall
slightly for the year ended June 2001.

New Zealand's climate and soils are well-suited to the growth of
planted production forests.  Planted production forests cover an area
of 1.7 million hectares and produce 99% of the country's wood.
Radiata pine, which makes up to 90% of the plantation estate, matures
in 25 to 30 years, more than twice as fast as in its natural habitat
of California.  This species has had considerable research investment
since it was introduced last century and has demonstrated its
versatility for a wide range of uses.

About 35% of New Zealand's planted production forests are owned or
managed by two major private sector forestry companies (Carter Holt
Harvey Limited and Fletcher Challenge Forests Limited).  Nine medium-
sized forestry companies own a further 22% of forests.  Six percent
of the forest area remains in central Government ownership, being
managed primarily by the Ministry of Agriculture and Forestry and two
State-Owned Enterprises.  Local authorities own a further 3% of the
area while the balance (34%) is owned by a large number of private
owners including Maori Trusts.  The mix of forest ownership, however,
is changing.  Most of the recent new planting has been carried out by
investment syndicates and other small private owners.

New Zealand's total plantation forest growing stock at 1 April 1999
was estimated as 353 million cubic metres.  For the year ended 31
March 2001, a provisional estimate of 18.5 million cubic metres of
wood were removed from New Zealand production forests with 13 million
cubic metres exported.  This produced a range of products, including
sawn timber (3.7 million cubic metres); wood panels (843,000 cubic
metres); wood pulp (1.6 million tonnes); and paper and paperboard
(869,000 tonnes).  Some 5.9 million cubic metres of unprocessed logs
were exported during the same period.

Wood supply forecasts show that the potential sustainable wood
supply could increase from the current annual harvest of 18.5 million
cubic metres, to 28.5 million cubic metres by 2003, and to more than
30 million cubic metres by 2006.  This additional 12 million cubic
metres of wood supply will double the volume of wood available for
export.

Fishing

Fishing has developed into a major New Zealand industry and is now
the fourth largest merchandise export earner.  Fish and other seafood
accounted for $1,345 million in export revenues in the year ended 30
June 2001, about 4.2% of total merchandise exports.

Approximately half of production is exported, with the most
important species being orange roughy, rock lobster, squid, snapper
and hoki.  The main export markets are the United States, Japan and
Australia, although Europe is becoming increasingly more important.
New Zealand's unpolluted coastal waters are also well-suited to
aquaculture.  The main species farmed are Pacific oyster, green-
lipped mussels and quinnat salmon.

New Zealand has an Exclusive Economic Zone (EEZ) of 3.1 million
nautical square kilometres supporting a wide variety of inshore fish,
some large deep-water fin fish, squid and tuna.  The New Zealand
domestic fishing fleet has grown substantially in recent years and
investment in processing capacity has increased accordingly.  Foreign
vessels under charter to New Zealand companies are used extensively.

The conservation and management of the fisheries is based on a
proportional quota management system designed to protect the future
sustainability of the fisheries while facilitating their optimum
economic use.  The system uses market forces, together with
scientific assessments of fish stocks, to allocate fishing rights
without arbitrarily restricting fishing methods.  Within the quota
management system, certain administrative functions, such as
registration of quota sales and fishing vessels, have been devolved
to the fishing industry.  This allows for a greater level of
partnership between the government and the fishing industry and
enables the commercial sector to deliver administrative services
according to their needs.

The maximum levels of catch are controlled by the Government, which
assigns access rights to resources by issuing tradeable quotas up to
a maximum allowable catch for each species.

Energy and Minerals

New Zealand has significant natural energy resources, with good
reserves of coal, natural gas and oil/condensate, extensive
geothermal fields, and a geography and climate which has supported
substantial hydroelectric development.  The main minerals mined, in
addition to coal, are gold, silver, ironsands, various industrial
minerals and gravel for construction.

Programmes for the exploitation of New Zealand's energy resources
were accelerated after the first oil shock in 1973.  Oil and gas
exploration was increased and energy conservation programmes were
developed and promoted.  As a result, New Zealand is able to supply a
significant proportion of its energy requirements.

Since 1984, the Government has separated its commercial activities
from its policy and regulatory functions in the energy sector and has
deregulated the previously controlled oil, gas and electricity
markets.  Notably, franchise area restrictions have been removed,
operations of electric supply authorities corporatised and
information disclosure regimes introduced for the electricity and gas
industries.

Natural Gas:  Natural gas is currently produced in the Taranaki
region of the North Island from the large offshore Maui field, and
smaller onshore fields.  There are three main groups of users of gas
in New Zealand; electricity generation, petrochemical production and
reticulation.  In recent years, an increasing proportion of gas, (44%
in year ended 31 March 2001) has been used for electricity
generation.  Another 42% is used for petrochemicals, mostly by
Methanex New Zealand Limited for the production of chemical methanol
and for ammonia/urea production.  The remaining 14% is reticulated in
the North Island as a premium fuel.  Gross natural gas production has
averaged over 240 PJ per annum over the past few years and is likely
to continue until the Maui field draws down around 2005.

Oil:  New Zealand's crude oil and condensate production was 1.58
million tonnes in the year ended 31 March 2001, of which 1.2 million
tonnes were exported.  Total crude petroleum imports were 4.6 million
tonnes.  In the same year, domestic gasoline production was 1.5
million tonnes, of which about 25% was premium unleaded petrol and
75% regular unleaded petrol.  Domestic consumption of gasoline was
2.2 million tonnes.  Total domestic consumption of gasoline, diesel,
fuel oils and other fuel products was around 5 million tonnes.

Coal:  Coal is New Zealand's most abundant energy resource with 8.6
billion tonnes potentially recoverable from 42 coalfields.  Of this
amount, 80% is lignite, located mainly in Southland, 15% is sub-
bituminous, located mainly in the Waikato region south of Auckland,
and 5% is bituminous, located mainly on the West Coast of the South
Island.  Lignite is used mainly for industrial fuel and sub-
bituminous coal for industrial fuel, steel manufacture, electricity
generation and domestic heating.  Bituminous coal, which is typically
very low ash, low sulphur coking coal, is mainly exported for
metallurgical applications.

Coal "reserves" refer to that portion of the coal resource that is
known to be recoverable under current technological and economic
conditions.  Total measured coal reserves are approximately 15
billion tonnes.  In 2001, total coal production was 3.8 million
tonnes, of which approximately 1.7 million tonnes of coking coal were
exported.

Electricity:  In 1994, the transmission functions of the Electricity
Corporation of New Zealand (ECNZ) became a separate State-Owned
Enterprise, Transpower.  In 1996, about a third of ECNZ's generation
assets were transferred to a new State-Owned Enterprise, Contact
Energy, which competed directly with ECNZ and private sector
companies in New Zealand's newly-formed wholesale electricity market.

In 1998, the Government introduced a further round of reforms to
promote greater economic efficiency in the electricity generation,
distribution and retail industries.  This involved the further split
of ECNZ and required local power companies to separate the ownership
and control of line businesses from their energy retailing and
generation activity by 1 April 1999.

In March 1999, the Government sold a 40 percent "cornerstone"
shareholding in Contact Energy to US-based Edison Mission Energy.
The remainder was sold by public share float.

On 1 April 1999, ECNZ was further split into three competing State-
Owned Enterprises so that, in total, there were four competing
generators formed from the initial ECNZ.  The new companies are
Meridian Energy, Genesis Power and Mighty River Power.

In February 2000, the Government announced a Ministerial Inquiry
into the Electricity Industry.  The Inquiry reported on 13 June and
its recommendations covered a wide range of wholesale market,
transmission, distribution and retail issues, including industry
governance and regulatory arrangements, and measures to improve
demand-side participation.  The Government announced its decision on
the recommendations made by the Inquiry in December 2000.

The reforms are designed to strengthen self-regulation of the
electricity industry through the creation of a single industry
governance board, which will set industry rules consistent with the
outcomes specified by the Government, and to devolve price control
decisions and responsibilities for setting asset valuation
methodologies for lines businesses to the Commerce Commission.  This
approach builds on the recommendations of the Ministerial Inquiry and
existing self-regulatory arrangements in the industry.  The functions
and constitution of the governance board is guided by a Government
Policy Statement, which sets out government expectations for industry
action, but leaves the details to be determined by industry.

The Government passed legislation in August 2001 that enables the
Commerce Commission to fulfil its roles, and provides the government
with backstop regulatory powers to establish the governance board and
undertake other measures should the industry fail to deliver on
Government expectations.  The industry will be required to have its
final set of rules authorised by the Commerce Commission to ensure
consistency with competition law and policy in New Zealand.  The
industry is reporting to the Minister of Energy regularly so that the
Government can gauge industry progress.

The three new electricity generation companies and Contact Energy
had a combined total net capacity of about 7,050 MW as at 31 March
2001, and together generated about 81% of the nation's power.
Private companies operating stand-alone power and cogeneration plants
produced the rest of the nation's power.  In the year ended 31 March
2000, hydro-electric power produced 65% of the total national
electricity supply of 37,000 Gigawatt hours (including cogeneration),
thermal power (mostly gas with some minimal coal use) generated 22%,
and geothermal 5.9% and the rest, including cogeneration, about 7%.
There is a small (0.4%) but increasing amount of windpower generation.

Manufacturing

New Zealand's manufacturing industries make an important
contribution to the national economy.  In the year ended March 2001,
manufacturing sector output accounted for around 16% of real GDP.
The proportion of the labour force employed in manufacturing was also
around 16% in the year to June 2001.

Manufacturing contributed significantly to growth in the 1990s.
From the trough of the previous economic cycle in June 1991 through
to June 2000, manufacturing output grew by 31%.  Output grew
particularly strongly in the 1992-1995 period but since then growth
has slowed.  In part this is explained by the appreciation of the
exchange rate over the 1994-1997 period but also the adverse impact
of the Asian economic crisis, two consecutive droughts and, more
recently, slower domestic demand.  Primary sector processing (food
and forestry) make up a significant proportion of the sector.

Exports have been a primary driver of growth in the manufacturing
sector over recent years.  The performance of non-commodity
manufactured exports has been especially impressive, averaging over
9% annually since 1990.  An international focus by New Zealand
manufacturers, and attention to marketing, design, reliability,
customer responsiveness, and cost, have been key factors in this
success.

The following table sets forth the sales of goods and services in
the manufacturing sector for the five years ended 31 March 2001.  It
also shows the development of the manufacturing index for the same
period.

Sales of the Manufacturing Sector by Industry Group

Year ended 31 March		1997		1998		1999		2000		2001		2001 %
															of total
dollar amounts in millions)
Food
	Meat and Dairy		10,986	11,116	10,682	11,237	13,829	23.2
	Other				7,030		7,487		7,689		7,955		8,610		14.4
Machinery and equipment
manufacturing			7,307		7,430		6,780		7,036		7,896		13.2
Petroleum, coal, chemicals and
associated products		6,051		5,941		5,749		6,124		7,570		12.7
Wood and paper products		5,585		5,508		5,420		6,511		7,007		11.7
Metal products			5,576		5,965		5,513		6,042		6,365		10.7
Textile, clothing, footwear
and leather				2,836		2,542		2,470		2,594		2,761		4.6
Printing, publishing and recorded
media					2,571		2,570		2,568		2,500		2,632		4.4
Non metallic mineral products	1,478		1,585		1,581		1,588		1,509		2.5
Other manufacturing		1,614		1,703		1,615		1,746		1,528		2.6
Total					51,033	51,846	50,068	53,332	59,706	100.0
Manufacturing index (1)		101.8		103.1		98.1		102.4		105.0

(1)	Base:  March quarter 1996 = 100


Service Industries

Service industries make up a large proportion of the economy.  The
sector enjoyed strong growth in 1994/1995 with annual growth rates of
about 5%.  The sector slowed through 1997 and 1998 but still recorded
growth of over 2% at a time when the economy as a whole slipped into
recession.  Growth subsequently rebounded to over 5% in the year to
June 2000 and 4.6% in the year to September 2001, exceeding growth of
the economy as a whole.

Within the service sector, retail and wholesale trade, restaurants
and hotels comprise a major subcomponent, accounting for around 30%
of service sector activity.  Export-related activities such as
primary sector producer boards and tourism play an important part in
trends in this sector.  Thus growth was adversely affected through
1997 and 1998 as consecutive droughts caused a decline in primary
production.  In turn, the return to "normal" seasonal conditions
helped contribute to the rebound in growth over 1999 and 2000.  From
the end of 1998, the sector has also been buoyed by a strengthening
tourism industry.  After three years of double-digit growth, the
tourism industry is expected to be adversely affected by the events
of 11 September 2001 in the short term, with growth resuming after 3
to 6 months.

The transport and communications industries have been particularly
strong performers over recent times and appeared to be somewhat
immune to the 1997/98 economic slowdown.  Double-digit annual growth
was recorded over much of 1999 and 2000.  In part this reflects
growth in the areas of cellular communications and internet services.
Annual growth slowed over 2001.

Growth in the financial and business services sector has been much
more moderate than in most other service industries   However, recent
data shows annual growth rates picking up to just over 3% after
falling to 1% in 1999 and early 2000.


Financial Services

In the mid-1980s most direct controls on the financial services
sector were lifted.  The result has been rapid growth in money market
activity, the development of a sizeable secondary market in
government securities, the introduction of a range of new financial
instruments, including forward contracts, options, and interest and
exchange-rate futures, and the growing use of such devices to hedge
interest-rate and exchange-rate risk.

As a result of the removal of entry barriers and restrictions, the
financial services sector has grown rapidly, and many financial
institutions now offer a wide range of competitive services.  The
most notable development has been the Reserve Bank Act 1989.  The Act
provides a system of registration for banks and a policy of
prudential supervision for such registered banks.  The major concern
of the prudential supervision policy is maintaining and promoting the
stability of the financial system.  The Act identifies price
stability as the primary objective of monetary policy and gives the
Reserve Bank greater autonomy in pursuit of that objective.

All inter-bank settlement and cheque-clearing is performed using
modern and well-integrated computerised systems.  Several banks offer
banking services on the Internet.  Most of the registered banks and a
number of merchant banks operate in the wholesale banking area, while
a number of registered banks provide mainly retail banking services.

The banking system is currently in good shape despite a lack of
growth in the economy over the last year or so.  Profitability is
good, capital is comfortably above minimum requirements and non-
performing loans are at historically low levels.  Nevertheless, the
banking sector is very competitive with a few banks operating in
narrowly focused niche markets putting pressure on the larger banks
through fine pricing and low cost structures.


Transport

Transport is a major component of economic activity in New Zealand.
The country's transport system owes its characteristics, not only to
New Zealand's dependence on external trade and remoteness from many
of its trading partners, but also to its rugged terrain and scattered
population and the division of the country into two main islands
spanning 2,011 kilometres in length.  As a result, the establishment
of a comprehensive network of roads (around 93,000 kilometres) and
railways (4,200 kilometres) linked to ports and airports has involved
capital costs that are high in relation to the size of the
population.  However, the efficiency of the country's internal
transport system has played a critical role in New Zealand's economic
growth.

Much of this transport infrastructure was developed and operated by
government-owned monopolies.  Over the past 17 years, however, the
transport sector has been systematically deregulated and legislative
barriers to competition have been removed.  Previously government-
owned operations were corporatised and many have been sold.

Since 1983, domestic air services have been effectively deregulated.
In 1986, the overseas investment restrictions on foreign ownership of
New Zealand airlines were lifted.  New Zealand's three major
international airports and a number of provincial airports have been
progressively restructured as limited liability companies.  In 1998,
the Government's shares in Auckland and Wellington International
Airports and a number of provincial airports were sold.

Efficient international air services are vitally important to New
Zealand.  Accordingly, New Zealand seeks to conclude with other
countries the most liberal and flexible air services arrangements
possible.  Since 1985, New Zealand's policy has been to encourage its
negotiating partners in bilateral air services negotiations towards
mutual liberalisation, thereby increasing the opportunity for
competition in existing and potential markets.  New Zealand's air
services agreements are regarded as being the most liberal in the
world and include more open skies agreements than any other country
in the world apart from the United States.

New Zealand has progressively moved to a safety audit and monitoring
approach in regard to the regulation of the transport sector.  The
general effect of this move has been to shift more responsibility for
safety on to transport operators and other participants in the
transport sector.

Railways:  New Zealand's railway system connects all major
population centres and includes three inter-island rail ferries.
Until October 1990, the system was maintained and operated by the
government-owned New Zealand Railways Corporation, which also
operated a network of road passenger services and a nationwide parcel
service in competition with private firms.  In September 1993, the
core business was sold to a consortium of New Zealand and overseas
interests now operating as Tranz Rail.  The government has recently
completed the purchase of the Auckland urban railway corridor to
support regional initiatives to reduce traffic congestion.

Shipping:  Around 90% of New Zealand's total international trade is
carried by sea.  The vast majority of this is carried by about 30
foreign companies.

Benefits from the reform of New Zealand's port industry have been
realised through corporatisation and privatisation of the ports and
in lower stevedoring costs stemming from receptiveness to new
technology, changes in conditions of employment and reduced manning
levels.  The number of waterside workers is estimated to have reduced
by almost 60% following the implementation of reform legislation in
May 1988.  Ship turnaround times have halved and New Zealand
exporters have been able to negotiate lower freight rates as a result
of the savings derived from port reforms.

In November 1994, the Government passed legislation to permit
foreign vessels to compete in New Zealand's coastal trade from
February 1995.  This has provided further benefits for the economy,
particularly through reducing transport costs and increasing the
choice of coastal transport services for the manufacturing and
agricultural sectors.

Civil Aviation:  New Zealand has a large number of registered
aircraft and licensed pilots per capita.  Large aircraft are used for
international and domestic freight and passenger transport.  Light
aircraft, including helicopters, are used extensively in agriculture,
tourism and for scheduled services on provincial routes.

A total of 29 international airlines, including Air New Zealand,
link New Zealand with the rest of the world with both freight and
passenger services.  International flights operate from a number of
international airports, of which Auckland, Wellington and
Christchurch are the most significant.  Hamilton, Palmerston North,
Queenstown and Dunedin are secondary airports used for some
international flights, mainly trans-Tasman.

A large number of domestic airlines operate from 31 airports and
aerodromes.  Air New Zealand and Qantas New Zealand (previously
Ansett New Zealand) are the largest domestic operators of scheduled
services while a number of smaller operators compete on predominantly
provincial routes.

In September 2001, Air New Zealand placed its subsidiary, the Ansett
Group, into voluntary administration.  This, together with the events
of 11 September 2001, took Air New Zealand to the brink of financial
distress.  The New Zealand Government has provided a rescue package
for Air New Zealand.  The Government has subscribed for new equity in
Air New Zealand valued at $885 million, giving it an 82% stake in the
airline.  Air New Zealand will continue to be a publicly listed
company on the New Zealand Stock Exchange.  The Government has
committed to provide further funding of $150 million before June 2003
if required.  It has also indicated that it might consider bringing
in a strategic partner in the future.

Tourism

Tourism is one of the largest single sources of foreign-exchange
revenue and a major growth industry in New Zealand.  In the year to
30 September 2001, foreign-exchange earnings of $5.3 billion were
generated from international visitors (excluding New Zealand's share
of international airfare payments).  This was an increase of 12% on
earnings in the same period the previous year.  The country's
beautiful scenery, natural environment and a range of outdoor
activities make New Zealand a popular tourist destination.

Australia is New Zealand's closest market and by far the largest
source of visitor arrivals at 630,000 (33% of the total) in the year
ending 31 December 2001.  The next largest markets are the United
Kingdom (212,000, or 11% of the total), the United States (187,000;
10%) and Japan (149,000; 8%).

While total Asia arrivals are still down on the levels that existed
before the region's 1997/1998 economic crisis, some countries,
notably China, the Republic of Korea, Singapore and Thailand, have
shown a resurgence of strong growth.  China (53,000) and Singapore
(33,000) have already surpassed their 1997 arrival numbers.  The
Republic of Korea (87,000) has continued to recover rapidly over the
last two years, but has some way to go to return to pre-crisis levels
of 125,000 visitors.

The prospects for the tourism industry in the immediate future are
uncertain in the wake of the terrorist attacks in the United States.
However, New Zealand's competitive exchange rate and reputation as a
safe holiday destination should mean that New Zealand remains an
attractive option for international tourists.  Visitor arrivals for
the year ended 31 December 2001 were 1,910,000, an increase of 6.7%
over the previous year.



Communications
New Zealand was the first country to open its entire
telecommunications market to competitive entry in 1989.  Telecom New
Zealand was privatised in August 1990, and today all major
competitors are privately owned.  Local business services are
provided by Telecom New Zealand, TelstraClear, Walker Wireless, Ihug
and others.  In competition with Telecom New Zealand, TelstraClear
has a residential hybrid fibre-coaxial network in Wellington, and is
in the process of installing similar networks in Christchurch and
Auckland.  Other residential telecommunications options are emerging.
Latest figures show there are at least sixteen national and
international call service providers.  Telecom New Zealand and
Vodafone currently provide cellular services, and there are
indications that a third firm may enter the market.

Third generation and further second generation spectrum was recently
auctioned.  Successful bidders include TelstraClear, Telecom New
Zealand, Vodafone and Econet.

New Zealand's internet access prices tend to be lower than the OECD
average.  These low costs have encouraged a high uptake of internet
access among New Zealand residential users.  New Zealand is ranked
very highly among OECD countries in terms of Internet hosts per
thousand inhabitants and secure servers per one million inhabitants.

An independent Ministerial Inquiry into Telecommunications reported
to the Minister of Communications with its recommended changes to the
telecommunications regulatory regime in September 2000.  In December
2000, the Government announced its decisions on reforms including the
establishment of a Telecommunications Commissioner within the
Commerce Commission to resolve disputes over access to certain
regulated services provided by Telecom New Zealand.  Further
decisions were taken in October 2001, following Select Committee
consideration of the draft Telecommunications Bill.  The regulatory
regime, which was enacted in December 2001, includes specification
(low level regulation of access) of mobile roaming and cell-site co-
location, an extension of the services that Telecom is required to
wholesale to competitors, and a tightening of timeframes for
decisions of the Telecommunications Commissioner.

Until recently, most postal services were provided by New Zealand
Post Limited, a commercially-run State-Owned Enterprise.  In 1998,
the Government enacted the Postal Services Act removing New Zealand
Post's statutory monopoly for the delivery of standard letters from 1
April 1998.  As a result, there are now a number of registered postal
operators in the standard letters market offering a range of new
postal services and prices.  It is expected that there will be
continued growing competition as a result of the deregulation and on-
going substitution to electronic forms of communication.  However,
New Zealand Post still expects to earn profits and maintain high
service delivery standards while matching their competitors across a
wide range of services.

In addition, New Zealand Post is using its existing retail network
to expand into retail banking commencing in 2002.  New Zealand Post
does not have the resources to fund the establishment of the bank
itself, so the Government is making a one-off investment of up to
$78.2 million in New Zealand Post to fund the establishment expenses
and capital expenditure involved, and to ensure there is sufficient
capital to meet Reserve Bank requirements.  However, the Government
is neither guaranteeing the bank nor subsidising its on-going
operations.  Registration of the new bank, known as Kiwibank, was
completed on 4 February 2002.

Two national radio networks are provided by Radio New Zealand
Limited, a Crown entity.  There are numerous private radio stations.
Television New Zealand Limited, a State-Owned Enterprise, provides
two national free-to-air television channels, as does CanWest, a
private television operator.  Non-commercial television and regional
television services are also available in some areas.  Digital and
analogue pay TV services are available from satellite and, in some
areas, cable delivery platforms.

There are six major daily metropolitan newspapers in the main
centres and numerous provincial and community newspapers, all of
which are privately owned.  In addition there are two national weekly
business papers, a number of wire services and a growing number of
internet news services.


EXTERNAL SECTOR
External Trade
External trade is of fundamental importance to New Zealand.  New
Zealand remains reliant in exports of commodity-based products as a
main source of export receipts and relies on imports of raw materials
and capital equipment for industry, making New Zealand strongly trade-
orientated.

New Zealand remains committed to a reduction of world-wide trade
barriers.  Tariffs have been systematically reduced and quantitative
controls on imported goods eliminated.  Currently around 95% of goods
come into New Zealand tariff free, including all goods from Least
Developed Countries.

New Zealand was active in laying the foundations for a new round of
WTO negotiations.  Agriculture and services are of prime importance
to the New Zealand economy and are already mandated for negotiation.
New Zealand will be working with other like-minded countries to
reduce barriers to trade in goods and services and provide improved
market access for New Zealand exporters.

New Zealand, as a member of APEC, is committed to achieving APEC's
goals of free trade and investment by 2010 for developed economies
(2020 for developing economies).  As Co-chair of the APEC Finance
Ministers process during 1999-2000, New Zealand continued to promote
sound economic and financial policies in the APEC economies.  Recent
New Zealand initiaitives have been the promotion of a Voluntary
Action Plan for free and stable capital flows and initiatives to
promote improved corporate governance and public sector management.
A plurilateral open skies air services agreement has been signed
between New Zealand, Brunei, Chile, Singapore and the United States.
New Zealand has also put effort into capacity building and technical
co-operation within APEC, and has encouraged greater involvement by
organised labour.

New Zealand is ready to enter into discussions with any interested
trading partners on the posibility of new preferential bilateral or
regional free trade arrangements, provided such arrangements are
outward-looking and WTO-consistent.  New Zealand is currently
negotiating a Closer Economic Partnership with Hong Kong and a Closer
Economic Partnership Agreement with Singapore entered into effect on
1 January 2001.  Similar arrangements with other economies, including
the United States, are currently under negotiation or active
consideration.

Merchandise Trade

After bottoming at a deficit of $3,573 million in December 1999, the
merchandise trade balance has improved significantly.  The annual
merchandise trade balance stood at a deficit of $12 million for the
year ended 30 September 2001.  Merchandise exports increased 22% in
the year to 30 September 2001 to $31.9 billion, while merchandise
imports grew by 9% to $31.9 billion.  Trend growth in exports has
generally exceeded import growth through 2000 and 2001.  Growth was
particularly strong in dairy and casein products (+47%), electrical
machinery and equipment (+29%) and meat products (+24%).  Further
narrowing of the merchandise trade deficit is expected into 2002
leading to further improvement in the current account.

Trade in Services

Trade in services is dominated by tourist flows and the tourism
industry is one of the most important sectors of the New Zealand
economy.

The sharp rebound in tourists from Asia following 1998 and continued
strong growth in tourist numbers from these markets, together with
growth in the United States and European markets, saw improvements in
services exports.  In the year to 30 September 2001, total visitor
arrival numbers grew by 12.2% while numbers from Asia were up 14% and
up 10.8% from Europe.  The depreciation in the New Zealand dollar,
the recovery of the Asia region, and some one-off events were
significant factors behind this substantial growth in tourist
arrivals.

The turnaround in visitor arrivals helped an improvement in the
services balance from a deficit of $1,469 million in the year to 30
September 1998 to a deficit of $88 million in the year to 30
September 2001.

In the wake of the events of 11 September 2001, visitor numbers
declined by 4.4% in the quarter ended 31 December 2001, although
numbers for the full year increased by 6.7%.  Some markets, however,
continued to perform strongly during the quarter.



The following table records the total value of exports and imports
of goods since 1997.

Balance of External Merchanise Trade

					Exports	Imports	Balance	Exports
					(FOB)(1)	(CIF)		Of Trade	as a % of
											Imports
Year ended 30 September
(dollar amounts in millions)
1997					21,033	21,324	(290)		98.6
1998					21,990	22,589	(599)		97.3
1999					22,600	24,248	(1,648)	93.2
2000					26,027	29,193	(3,166)	89.2
2001					31,939	31,927	(12)		100.0

(1)	Includes re-exports

Terms of Trade

The merchandise terms of trade index was 6.1% higher in September
2001 compared with the same quarter in 2000.  Export prices rose 6.2%
over the year, while import prices remained flat.  Rising prices for
commodities such as meat and dairy in particular have had an upward
influence on export prices.

				Exports 		Imports 		Terms of Trade
				Price Index (1)	Price Index (1)	Index (2)

1997	March			970	(6.3)		1,020	(4.6)		1,083	(1.7)
	June			965	(4.2)		1,021	(3.3)		1,076	(0.9)
	September		980	(2.8)		1,047	1.1		1,066	(3.8)
	December		1,003	2.9		1,053	2.5		1,085	0.4
1998	March			1,017	4.8		1,050	2.9		1,103	1.8
	June			1,019	5.6		1,078	5.6		1,076	0.0
	September		1,041	6.2		1,087	3.8		1,090	2.3
	December		1,029	2.6		1,084	2.9		1,080	(0.5)
1999	March			1,006	(1.1)		1,078	2.7		1,062	(3.7)
	June			1,021	0.2		1,085	0.6		1,072	(0.4)
	September		1,053	1.2		1,085	(0.2)		1,106	1.5
	December		1,083	5.2		1,144	5.5		1,078	(0.2)
2000	March			1,103	9.6		1,199	11.2		1,048	(1.3)
	June			1,149	12.5		1,230	13.4		1,064	(0.7)
	September		1,261	19.8		1,293	19.2		1,111	0.5
	December		1,362	25.8		1,393	21.8		1,113	3.2
2001	March			1,325	20.1		1,288	7.4		1,171	11.7
	June(3)		1,348	17.3		1,316	7.0		1,167	9.7
	September(3)	1,340	6.3		1,294	0.1		1,179	6.1
	December		NA	NA		NA	NA		NA	NA

(1)	Base:  Year ended June 1989 = 1,000

(2)	Base:  Average of 10 years ended June 1989 = 1,000

(3)	Provisional.

Percentages represent change over the same quarter of the previous
year.

Composition of Merchandise Exports and Imports
Agricultural exports are still an important source of export income
for the New Zealand economy.  Meat and dairy products are the most
important agricultural exports - together they accounted for just
over 35% of total merchandise exports in the year ended 30 September
2001.

The agricultural sector is highly efficient and has increased the
value-added component in agricultural exports.  In the face of a long-
term downward trend in commodity prices, all primary producers have
been under pressure to innovate, add value and diversify markets.

New Zealand's export base has widened, as other sectors expand their
relative contribution to export revenue.  Exports of forestry
products, fish and horticultural products have increased their
contribution to export earnings considerably.  In 1971, the value of
exports from these products comprised around 8% of total revenue.  In
the year ended 30 September 2001, it was over 20%.

The manufacturing sector has been a major source of export growth
and diversification over the past decade.  Non-commodity manufactured
exports have grown an average of around 9% annually since 1990 and
now account for over 30% of total merchandise exports.  The Closer
Economic Relations agreement has contributed to a successful
expansion by manufacturers into the Australian market.  A focus on
design, reliability and cost is also seeing manufacturers make
inroads into other markets, particularly Asia and the United States.
Despite New Zealand's geographical position, it now exports a range
of manufactured goods, including plastic goods, carpets and textiles,
wines and high-tech computer equipment to countries throughout the
world.

As New Zealand has become more internationally oriented, imports
have played a larger role in its economy.  In real terms, imports
have increased by over 70% over the past ten years, reflecting both
tariff reductions and a higher degree of value-added in the
manufacturing sector.


The following tables show the dollar amounts and percentage
distribution of New Zealand's major exports and imports.

Composition of Principal Merchandise Exports

						1997		1998		1999		2000		2001		2001
																% of total
Year ended 30 June							(dollar amounts in millions)
Dairy produce etc				3,515		3,723		3,861		3,975		5,810		18.2
Meat and edible meat offal		2,730		2,903		2,828		3,376		4,179		13.1
Wood and articles of wood		1,565		1,434		1,495		2,016		2,218		6.9
Fish, crustaceans and molluscs	1,014		1,014		1,153		1,206		1,345		4.2
Aluminium and articles thereof	811		959		956		1,114		1,294		4.1
Casein and caseinates			569		652		763		803		1,213		3.8
Mechanical machinery			758		864		848		944		1,067		3.3
Fruit						778		894		1,062		974		1,031		3.2
Electrical machinery			516		621		627		752		915		2.9
Wool and other animal fibres		947		911		741		801		885		2.8
Raw hides and skins			663		602		535		557		837		2.6
Mineral fuels				551		493		441		614		741		2.3
Wood pulp					357		358		362		544		633		2.0
Paper and paperwood			410		489		535		631		507		1.6
Iron and steel				417		455		450		491		504		1.6
Vegetables					271		336		389		365		446		1.4
Plastics and articles thereof		261		282		295		334		393		1.2
Precious stones, metals & jewellery	263		253		195		227		265		0.8
All other commodities			4,008		4,248		4,241		5,046		6,610		20.7
TOTAL NEW ZEALAND PRODUCE		20,405	21,490	21,777	24,772	30,892	96.7
Re-exports					628		501		823		1,256		1,047		3.3
Total Merchandise Exports
F.O.B.					21,033	21,990	22,600	26,027	31,939	100


Composition of Principal Merchandise Imports

						1997		1998		1999		2000		2001		2001
						% of total
Year ended 30 June						(dollar amounts in millions)
Mechanical machinery			3,109		3,387		3,299		3,651		3,936		13.2
Vehicles					2,439		2,094		2,698		3,292		3,384		11.3
Electrical machinery			2,124		2,234		2,428		2,834		3,263		10.9
Mineral fuels				1,317		1,230		1,226		2,169		3,251		10.9
Plastic and articles thereof		829		877		902		1,093		1,227		4.1
Optical, photographic, etc		650		721		737		819		952		3.2
Aircraft					303		381		798		1,493		877		2.9
Paper and paperboard			569		597		664		761		834		2.8
Pharmaceutical products			531		606		661		703		757		2.5
Apparel and clothing accessories:
not knitted					360		424		439		526		602		2.0
Apparel and clothing accessories:
knitted					283		338		334		399		458		1.5
Iron and steel				348		328		338		428		442		1.5
Iron or steel articles			321		339		325		372		413		1.4
Printed books, newspapers, etc	314		329		366		385		399		1.3
Organic chemicals				255		269		285		318		368		1.2
Chemical products n.e.s			262		264		332		339		366		1.2
Toys, games and sports requisites	233		251		270		297		358		1.2
Rubber and articles thereof		250		263		287		309		348		1.2
Ships and boats				298		664		358		691		241		0.8
Inorganic chemicals			164		170		177		186		200		0.7
All other commodities			4,825		5,244		5,662		6,395		7,208		24.1
TOTAL MERCHANDISE IMPORTS
v.f.d.					19,785	21,010	22,584	27,460	29,885	100.0
c.i.f. value				21,324	22,589	24,248	29,193	31,927


Geographic Distribution of External Trade

New Zealand's trading relationships are becoming increasingly based
around Pacific Rim countries.  New Zealand's three largest export
markets - Australia, Japan and the United States - account for 46% of
New Zealand's exports and 49% of its imports.

The APEC countries accounted for around 73% of New Zealand's total
merchandise exports in the year to 30 June 2001.  These markets also
provide over 71% of New Zealand's imports.

Geographic Distribution of Exports (1)(2)

					1997		1998		1999		2000		2001		2001
														% of total
Year ended 30 June					(dollar amounts in millions)
Australia				4,276		4,578		4,841		5,503		6,052		19.0
United States			2,085		2,596		3,005		3,739		4,643		14.6
Japan					3,138		3,030		2,878		3,371		4,277		13.4
United Kingdom			1,354		1,327		1,401		1,609		1,552		4.9
Korea, Republic of		978		762		883		1,172		1,405		4.4
China, Peoples Republic of	560		613		619		731		1,114		3.5
Hong Kong				575		633		535		710		846		2.7
Germany				511		579		623		644		842		2.6
Taiwan				554		564		529		649		722		2.3
Malaysia				491		443		424		490		687		2.2
Italy					301		394		396		426		586		1.8
Canada				313		285		294		327		581		1.8
Indonesia				369		217		191		362		557		1.7
Belgium				307		470		485		426		520		1.6
Philippines				295		303		280		316		503		1.6
Singapore				284		381		362		480		434		1.4
Thailand				283		251		238		287		389		1.2
Other					4,360		4,563		4,615		4,787		6,194		19.4
TOTAL					21,033	21,990	22,600	26,027	31,905	100.0
(1)	Free on Board
(2)	Excludes re-exports


Geographic Distribution of Imports (1)

	1997	1998	1999	2000	2001	2001
						% of total
Year ended 30 June	(dollar amounts in millions)
Australia				4,770		5,279		5,079		6,543		6,660		22.3
United States			3,373		3,726		4,044		4,885		5,026		16.8
Japan					2,588		2,326		2,771		3,190		3,170		10.6
China, Peoples republic of	822		1,028		1,150		1,527		2,013		6.7
Germany				885		932		1,021		1,115		1,329		4.4
United Kingdom			1,059		1,123		1,000		1,091		1,115		3.7
Malaysia				372		423		493		679		911		3.0
Korea, republic of		381		408		462		637		652		2.2
Taiwan				548		523		519		595		649		2.2
Italy					456		455		478		540		625		2.1
Saudi Arabia			398		334		256		497		592		2.0
France				303		367		433		667		556		1.9
Singapore				338		328		458		516		553		1.9
Thailand				167		221		295		392		449		1.5
Canada				350		395		326		423		405		1.4
Indonesia				196		184		239		248		361		1.2
Sweden				327		272		277		340		347		1.2
Belgium				172		179		181		212		235		0.8
Switzerland				173		277		228		231		234		0.8
Other					2,107		2,231		2,873		3,129		4,004		13.4
TOTAL					19,785	21,010	22,584	27,460	29,885	100.0
(1)	Value for Duty


Principal Trading Partners

Australia:  Australia is New Zealand's largest trading partner.  In
the year ended 30 June 2001, bilateral trade amounted to $12.7
billion, or around 20% of total exports and imports.

Trade with Australia has flourished since CER came into operation in
1983.  The original objective of CER was to join the two countries in
a free trade area by 1995.  The agreement was extended to cover trade
in services from 1 January 1989.  This provision makes CER the most
comprehensive agreement of its kind in the world.  Full free trade in
goods was achieved on 1 July 1990, four years ahead of schedule.  The
two countries also agreed to work towards the harmonisation of
administrative procedures in the areas of quarantine, customs and
business law, and to restrict the use of industrial assistance
policies affecting bilateral trade.  There has long been free
movement of labour between the two countries.

The 1996 annual review of CER by Trade Ministers resulted in the
signing of further major agreements, the most significant being the
Trans-Tasman Mutual Recognition Agreement, which was implemented in
May 1998.  Under this agreement any goods that can be sold legally in
New Zealand may also be sold in Australia, and vice versa, and any
person registered to practise an occupation in one country can
practise the same occupation in the other.

United States:  At the beginning of 1998, the United States replaced
Japan as New Zealand's second largest trading partner, and bilateral
trade amounted to $9.7 billion in the year ended 30 June 2001.  The
United States has been one of New Zealand's largest export markets
for many years, and is a major supplier of imports.  Exports to the
United States recorded a 24% increase over the year to 30 June 2001,
and comprised 19% of New Zealand's total exports.  In the same year,
the United States supplied 17% of New Zealand's total imports, the
major categories being heavy industrial goods, aircraft, computers
and technology.

New Zealand's major exports to the United States are beef, casein,
timber, lamb, cheese and a growing range of manufactured goods.  The
development of trade in dairy products has been constrained by long-
standing quotas on these items.

Japan:  Japan is New Zealand's third largest trading partner, with
bilateral trade amounting to about $7.5 billion in the year ended 30
June 2001.

Japan is one of New Zealand's key single export markets (third
behind Australia and the United States), taking just under 14% of
total merchandise exports in the year to 30 June 2001.  Aluminium is
the largest export, making up 19% of total exports to Japan.  Japan
is also a key market for wood, dairy products, fish, kiwifruit, meat,
vegetables and other fruits.  As a result of the Asian financial
crisis, exports of key commodities fell, in particular wood and
aluminium products.  However, with the stabilisation of Japan's
economy, there has been a marked turn around in export volumes.

Japan is also a major supplier of New Zealand's imports, providing
11% of total imports in the year to 30 June 2001.  Imports from Japan
are dominated by technology intensive appliances.  Vehicles account
for around 50% of total imports.

New Zealand is a popular tourist destination for Japanese.  Despite
weak growth in Japan over the 1990s, tourism arrivals have continued
to grow steadily over the decade apart from dipping briefly during
the 1997-1998 Asian economic crisis.  Tourism arrivals from Japan
were over 149,000 in the year to September 2001.  Japan is the fourth
largest source of New Zealand tourist arrivals.

European Union:  The members of the European Union are important
trading partners for New Zealand.  Together, the Union members
constitute New Zealand's second biggest export market, taking 15% of
exports.  While the European Union is a relatively open market for
non-agricultural goods, New Zealand remains concerned about the
Union's access restrictions on agricultural products and the impact
of its agricultural export policies on New Zealand's trade in third
markets.

Asian Economies:  The Asian economies of the Republic of Korea,
Taiwan, Hong Kong, China, Malaysia, Indonesia, Singapore, Thailand,
Vietnam, and the Philippines continue to be important trading
partners for New Zealand despite the region's 1997-98 economic
crisis.  Strong export growth to these markets has since resumed.
These economies are all in the 20 largest export markets for New
Zealand and accounted for 21% of merchandise exports in the year
ended 30 June 2001.





Foreign Investment Policy

New Zealand welcomes foreign investment that contributes to the
economic and social well-being of New Zealanders.  New Zealand's
regulations governing foreign investment are liberal by international
standards and New Zealand maintains specific foreign investment
restrictions in only a very few areas.

There are no restrictions on the movement of funds in or out of New
Zealand, or on repatriation of profits.  No additional performance
measures are imposed on foreign-owned enterprises.

The Overseas Investment Commission is responsible for administering
the Government's foreign investment policies and assesses
applications for all non-land and some land investment against
criteria that are transparent and of a prudential nature.

The Commission administers the Overseas Investment Regulations 1995.
Under the Regulations an "overseas person" must obtain consent to
acquire or take "control" of 25% or more of New Zealand businesses or
property worth more than $50 million; land over 5 hectares and/or
worth more than $10 million; land on most off-shore islands and
"sensitive" land over 0.4 hectares and over 0.2 hectares if it
adjoins the foreshore.


Foreign Investment Inflows(1)

					1997		1998		1999		2000		2001
Year ended 31 March			(dollar amounts in millions)
Foreign Direct Investment	2,900		3,411		1,779		2,964		7,715
Foreign Portfolio Investment	(285)		927		743		(6,041)	3,890

(1)	Revised.  Compiled according to the principles set out by the
International Monetary Fund in the 5th edition.

The stock of foreign direct investment in New Zealand stood at $49.3
billion as of 31 March 2001.  Australia and the United States are the
largest contributors to total foreign direct investment in New
Zealand, with investments worth $17.2 billion and $7.0 billion
respectively.  The United Kingdom is the third largest investor with
a total of $6.7 billion.

In contrast, the stock of direct investment abroad by New Zealand
was $14.7 billion as at 31 March 2001.



Balance of Payments

In the last five years the current account deficit has fluctuated in
a range of 3.4% to 7.0% of GDP.  The deficit stood at 3.4% in the
year to 30 September 2001.  A key feature of New Zealand's current
account deficit is the large deficit on investment income reflecting
New Zealand's net foreign liability position, which has traditionally
varied around 7%.

In recent years, the current account deficit has been affected by
changes in both the investment income deficit and the goods and
services balance.  Fluctuations in the investment income balance have
occurred due to profits accruing to foreign investors in New Zealand
moving with the economic cycle in New Zealand and also variable
profits earned by New Zealand investments offshore.  The goods and
services balance has also varied due to the Asian economic crisis,
drought, oil price changes, and some large one-off imports.  More
recently, very strong agricultural exports and growth in tourist
numbers has led to a significant improvement in the current account
deficit.  This is expected to vary around current levels, with
commentators generally forecasting an improvement when world growth
rebounds.

Balance of payments statistics are compiled by the Government
following principles set out by the International Monetary Fund in
the 5th edition.

							1997(1)	1998(1)	1999(1)	2000(1)	2001(2)	Year ended
																	30 September 2001 (2)
Year ended 31 March								(dollar amounts in millions)
Current Account
	Export receipts				20,914	22,040	22,952	24,763	31,121	33,398
	Import receipts				19,957	20,633	21,531	25,572	29,000	29,841
	Merchandise balance			956		1,409		1,422		(812)		2,119		3,556
	Services balance				(462)		(1,068)	(1,187)	(485)		(263)		(88)
	Investment income
balance						(7,264)	(6,399)	(4,976)	(6,604)	(7,736)	(7,071)
	Transfers balance				756		477		359		509		466		333
Current Account
balance						(6,014)	(5,581)	(4,385)	(7,391)	(5,414)	(3,900)
	Deficit as % of GDP			(6.2%)	(5.6%)	(4.3%)	(7.0%)	(4.8%)	(3.4%)

Financial Account
	Foreign investment in New Zealand	4,367		6,975		5,798		9,981		17,215
	New Zealand investment abroad		356		1,269		2,934		5,811		12,156
	Reserves					614		(634)		(874)		(172)		(5)
Financial Account balance			4,011		5,706		2,864		4,170		5,059

Capital Account
	Balance of capital account		1,445		54		(404)		(415)		(184)



(1)	Revised
(2)	Provisional



Foreign-Exchange Rates and Overseas Reserves
The New Zealand dollar has floated freely since March 1985.  Since
the exchange rate was floated, the Reserve Bank has not intervened
directly in the foreign-exchange market to influence the value of the
dollar.  There are no exchange controls on foreign-exchange
transactions undertaken in New Zealand, either by New Zealand
residents or non-residents.

Foreign-Exchange Rates

					U.S.A.	Japan			Trade-
				Mid-rate US$	Mid-rate		Weighted
					Per NZ$	Yen per NZ$		Exchange Rate
Monthly Average in June							Index (1)
1997					0.6876	78.58			67.4
1998					0.5101	71.75			57.3
1999					0.5327	64.32			58.2
2000					0.4699	49.87			52.2
2001					0.4148	50.72			50.0
	July				0.4087	50.87			49.4
	August			0.4306	52.35			51.0
	September			0.4198	49.86			49.6
	October			0.4141	50.20			49.2
	November			0.4163	50.92			49.6
	December			0.4157	52.80			49.9
2002	January			0.4246	56.36			51.5

(1)	The Trade-Weighted Exchange Rate Index is calculated on the
basis of representative market rates for a basket of currencies
representing New Zealand's major trading partners.  On 30 June 1979,
the basket equalled 100.


Overseas Reserves

New Zealand's official external reserves, as shown in the following
table, include the net overseas assets of the Reserve Bank, overseas
domiciled securities held by the Government and the reserve position
at the IMF.  New Zealand's quota at the IMF was SDR 895 million as of
30 June 2001 (approximately $2,750 million).

				Reserve Bank	Treasury	Reserve	Special	Total
				Overseas		Overseas	Position	Drawing	Official
				Reserves (1)	Reserves	at IMF (2)	Rights	Reserves
Last Balance Day in June		(dollar amounts in millions)
1997				3,878.6		2,098.0	246.1		0.2		6,222.9
1998				5,083.9		2,470.4	537.7		2.1		8,094.2
1999				4,447.9		1,773.1	858.3		6.7		7,085.9
2000				4,672.7		2,313.8	760.9		24.1		7,771.5
2001				4,905.7		2,655.5	905.7		35.1		8,502.1

(1)	Comprises foreign-exchange reserves and overseas investments of
the Reserve Bank of New Zealand.
(2)	Equal to New Zealand's quota, less its New Zealand currency
subscriptions and any reserve tranche drawings.


SUPERVISION OF THE FINANCIAL SECTOR
The Reserve Bank of New Zealand
The Reserve Bank of New Zealand was established in 1934 as New
Zealand's central bank by Act of Parliament.  It is government-owned
and has most of the powers normally associated with a central bank.
Following passage of the Reserve Bank of New Zealand Act 1989, the
primary function of the Reserve Bank has been to formulate and
implement monetary policy directed to the economic objective of
achieving and maintaining stability in the general level of prices.
The Act provides the Bank with autonomy to implement monetary policy
within the framework of the Act and the Policy Targets Agreement
entered into under the Act.

The Reserve Bank, in addition to its role in determining and
carrying out monetary policy, is the supervisory authority for New
Zealand's registered banks.  The Reserve Bank has acknowledged the
principle contained in the Basle Concordat that international banks
be adequately supervised and has adopted the capital adequacy
framework put forward by the Basle Committee on Banking Supervision.

Central to the Reserve Bank's banking supervision policy is the
promotion of strong market discipline for registered banks.  This is
achieved principally by requiring banks to publish disclosure
statements at quarterly intervals.  The disclosure statements contain
comprehensive information on a bank's financial position and risk
profile, director attestations as to the adequacy and proper
application of a bank's risk management system and also include the
disclosure of a bank's credit rating, where applicable.

The objective of supervision is to promote and maintain the overall
soundness and efficiency of the financial system.  There are no
deposit insurance arrangements operating in New Zealand in respect of
registered banks or other financial institutions.

Should a registered bank experience financial distress, the Reserve
Bank, with the approval of the Minister of Finance, has wide-ranging
powers to intervene for the purpose of avoiding significant damage to
the financial system.


Financial Sector Structural Developments
Since 1984, New Zealand's financial sector has undergone a process
of comprehensive deregulation.  The principal objective of
deregulation has been to improve the efficiency of the financial
sector by making it more competitive and to promote market discipline
as the primary regulator of financial markets.  Policy initiatives
have therefore been directed at reducing impediments to competition.
Interest-rate and other controls have been removed and regulatory and
legislative distinctions between different institutional groups have
been reduced.

One reform of significance was to provide the Reserve Bank with
power to register additional banks.  Since 1987, there have been no
limits on the number of banks that can be registered and no
differences in the treatment of resident and non-resident applicants,
other than the requirement for the Reserve Bank to have regard for
the law and regulatory requirements relating to bank entry in the
applicant's country of domicile and their application to New Zealand
banks.  Until April 1987, New Zealand had four registered banks,
previously known as trading banks.  By August 1990, there were 23
registered banks in existence.  With mergers and the withdrawal of
some new entrants, the number of registered banks fell to 15 by
December 1994.  More recently, a number of overseas banks have set up
branches or subsidiaries in New Zealand but there have also been
further mergers.  As at January 2002 there were 17 registered banks.
Fifteen of these are subsidiaries or branch operations of foreign
banks.  As of 30 June 2001, total assets of the banks registered in
New Zealand amounted to $192 billion.

In February 1988, stamp duty was removed from all financial
instruments except cheques, credit cards and the conveyance and
leasing of commercial property.  This initiative removed most of the
distortions which the former duty regime imposed on different
categories of financial instruments and institutional groups,
encouraging development of secondary markets in financial instruments.

Legislation affecting the financial sector is reviewed as necessary
to ensure that it fits with modern banking practices.  The law
relating to cheques has been amended to make provision for cheque
truncation and non-transferable cheques.  New legislation relating to
payments finality and netting was passed early in 1999.  Also the Law
Commission has recently released a consultative paper on legislative
initiatives needed to deal with electronic commerce.

In March 1998, the Reserve Bank of New Zealand and the registered
banks completed the implementation of real-time gross settlement for
most high value payments.  Since then, systems have been developed to
allow all large value payments to be settled on a real time gross
basis.

The introduction of real time gross settlement was part of an on-
going review of the New Zealand payments systems, with the objectives
of:

o	enhancing the ability of payments systems participants to
identify, monitor and manage payments risks;

o	reducing the level of settlement risks;

o	improving the clarity of payments-related legal rights and
obligations;

o	enhancing the efficiency of payments processes.

The Government recently considered a proposal by New Zealand Post to
establish a retail banking operation and decided that it would accept
the advice of New Zealand Post's board as to whether the proposal
should proceed.  The Government agreed that it would make a one-off
investment of up to $78.2 million in New Zealand Post to this end.
This comprises of an appropriation of $72.2 million and up to $6
million in forgone New Zealand Post dividends in the current
financial year.  The Crown is not guaranteeing the bank or
subsidising its on-going operations and the bank's scope will be
limited to retail banking services.  The bank must be run as a
commercial venture and will not be used as a vehicle for lending for
public policy reasons.  It will be subject to the same regulatory
requirements as any other bank.

On 4 February 2002, the Reserve Bank announced that registration of
the new bank, known as Kiwibank, had been completed.  Kiwibank plans
to open branches progressively across the country with a full launch
in April and May.

Business Law Environment
Company Law

The Companies Act 1993 provides the framework for the formation and
governance of companies.

Securities Law

As well as the Companies Act 1993, the key statute regulating the
securities markets is the Securities Act 1978.  The Securities Act
requires that certain information must be disclosed when securities
are offered to the public.  Recent legislative amendments have
widened the scope of the Securities Act to include interests in unit
trusts, superannuation schemes and life insurance policies when they
are offered to the public.  The amendments require certain key
features about the product to be clearly and briefly set out in a
plain English document aimed at the "prudent but non-expert
investor", as well as in a prospectus.

On 1 July 2001, a takeovers code came into force.  Among other
things, this requires any person who makes an offer for 20% or more
of a company to make that same offer to all shareholders.

The Securities Amendment Act 1988 provides for civil remedies
against insider traders and requires the disclosure of "substantial
security" holdings (i.e., an interest in 5% or more of the voting
securities of an issuer).

Competition Law

The purpose of the Commerce Act 1986, as amended by the Commerce
Amendment Act 2001, is to promote competition for the long-term
benefits of consumers within New Zealand.  Very broadly, the Act
prohibits:

o	agreements that have the purpose or effect of substantially
lessening competition;

o	the use of a dominant position in a market to exclude competitors;

o	business acquisitions that are likely to create or strengthen a
dominant position in a market.



Financial Reporting Act 1993

The Financial Reporting Act prescribes requirements for financial
reporting and establishes the Accounting Standards Review Board,
which is responsible for approving financial reporting standards with
which the Act requires compliance by larger companies.


Monetary Policy
Objectives

The Reserve Bank of New Zealand Act 1989 stipulates that the Bank is
to formulate and implement monetary policy directed to the economic
objective of achieving and maintaining stability in the general level
of prices.  The Act requires that there be a Policy Targets Agreement
between the Minister of Finance and the Governor of the Reserve Bank.
Initially the Agreement required the Bank to maintain CPI inflation
in the range of 0% to 2% over any 12-month period.  The range was
increased to 0% to 3% in December 1996.  (The measure of the CPI
excludes interest and credit costs.)

The Policy Targets Agreement acknowledges that there is a range of
unusual events that can have a significant temporary effect on
inflation as measured by the CPI and mask the underlying trend in
prices that is the proper focus of monetary policy.  Such events
could lead to inflation outcomes outside the target range.  Possible
disturbances include, for example:

o	shifts in the aggregate price level as a result of exceptional
movements in the prices of commodities traded in world markets;

o	changes in indirect taxes;

o	significant government policy changes that directly affect prices;

o	natural disasters affecting a major part of the economy.

When pressures of this kind arise, the Bank is required to react in
a manner that prevents general inflation pressures emerging.

The Agreement requires the Bank, in pursuing the price stability
target, to seek to avoid unnecessary instability in output, interest
rates and the exchange rate.  The Act contains certain provisions
that enable the Government to override the price stability objective
and the Policy Targets Agreement, provided it is done in accordance
with a set of procedures that would make the override publicly
transparent.

Implementation

The Reserve Bank acts with a considerable degree of autonomy.  This
operational independence has been formalised in the Reserve Bank Act
1989, which came into effect on 1 February 1990.  While the Act
provides that the ultimate responsibility for determination of the
monetary policy objective rests with the Government, it is also
intended to ensure that any political override of the price stability
objective is transparent and open to public and Parliamentary scrutiny.

The Reserve Bank controls the cost of liquidity by setting an
Official Cash Rate (OCR).  The Bank stands ready to lend cash
overnight at 25 basis points above the OCR and will take deposits at
25 basis points below the OCR.  By controlling the cost of liquidity
for financial institutions, the Bank has leverage over interest rates
faced by households and firms.  There are pre-announced dates (eight
per year) at which the Bank may reset the OCR; four of these coincide
with the publication of the Bank's Monetary Policy Statements.

As a small open economy, economic activity and inflation in New
Zealand can be influenced by both interest rates and the exchange
rate.  The Bank therefore takes the influence of both of these on
activity into account when setting the OCR.  Other important factors
to consider may include credit conditions, inflation expectations and
external conditions.  For all of these, the emphasis when setting
monetary conditions is on their medium-term effects - that is, the
Bank will generally set the OCR on the basis of what it perceives to
be the consequences of current economic conditions approximately six
to eight quarters in the future.  The Bank's assessment is published
at quarterly intervals in its Monetary Policy Statements, which
contain projected paths for future conditions and the Bank's policy
response.

1999 saw the end of a decade of operating under a formal inflation-
targeting regime.  During this time the New Zealand economy went
through a full business cycle, which saw monetary conditions tighten
and loosen.  Inflation remained low and stable.  There is some
evidence that inflation expectations are more anchored now than they
were during the transition to low inflation, and this has made it
easier for the Bank to implement monetary policy with a medium-term,
forward-looking focus.



Review of the Operation of Monetary Policy

In May 2000, the Government appointed Professor Lars E. O. Svensson
of the Institute for International Economic Studies at Stockholm
University to conduct an independent review of the operation of
monetary policy in New Zealand.  Professor Svensson presented his
report on 28 February 2001.

The report concludes that "monetary policy in New Zealand is
currently entirely consistent with the best international practice of
flexible inflation targeting, with a medium-term inflation target
that avoids unnecessary variability in output, in interest rates and
the exchange rate".  The report also recommends some measures to
enhance overall accountability for the conduct of monetary policy.



Interest Rates and Money and Credit Aggregates
The following tables show developments in major interest rates and
money and credit aggregates since the March quarter of 1997.

Key Interest Rates: Monthly Averages

			Overnight				90-Day	 Government Loan		Bank Base
			Interbank				Bank Bill	   Stock Rates		Lending
	Month		Cash Average	Call Rate	Rate		2 Year	5 Year	Rates(1)
1997	March		-			7.4		7.6		7.7	7.8	11.5
	June		-			6.7		7.0		6.8	7.0	10.9
	September	-			7.9		8.1		7.0	6.9	11.6
	December	-			7.6		8.3		7.4	7.2	11.4
1998	March		-			8.6		9.0		7.7	7.3	12.5
	June		-			8.9		9.2		7.7	6.9	12.6
	September	-			5.4		5.8		6.0	6.1	10.4
	December	-			3.5		4.4		5.0	5.3	 8.6
1999	March		4.07			-		4.6		5.0	5.6	 8.4
	June		4.54			-		4.7		5.3	6.2	 8.4
	September	4.50			-		4.9		6.2	6.7	 8.5
	December	5.00			-		5.7		6.6	7.0	 8.8
2000	March		5.51			-		6.3		7.0	7.0	 9.7
	June		6.50			-		6.9		7.0	6.9	10.6
	September	6.50			-		6.7		6.8	6.8	10.6
	December	6.51			-		6.7		6.3	6.2	10.6
2001	March		6.35			-		6.3		5.6	5.7	10.4
	June		5.75			-		5.8		6.1	6.5	9.9
	September	5.55			-		5.6		5.6	6.2	9.7
	December	4.75			-		4.9		4.6	6.2	9.0

(1)	Weighted average base lending rates of the four largest
registered banks.


Money and Credit Aggregates:  Annual % Changes

							Private
							Sector	Domestic
	Quarter		M1(1)		M3	Credit	Credit

1997	March		 	6.5		9.0	11.8		11.0
	June			 7.7	 	3.8	 9.9		10.1
	September		 9.4	 	6.8	10.8		10.1
	December		 7.2	 	4.2	10.1		10.0
1998	March		 	3.2	 	7.5	 9.0		10.0
	June		 	6.5	 	7.7	 8.7	 	9.8
	September		 7.7	 	1.4	 6.8	  	8.5
	December		13.8	 	1.1	 7.6	  	8.4
1999	March			20.9	 	1.6	 7.9	  	9.1
	June			18.8	 	0.2	 9.3	 	7.0
	September		23.0	 	8.3	10.0	  	9.1
	December		15.5	 	6.9	10.6		10.4
2000	March			11.3	 	4.2	11.6	  	9.3
	June			 5.4	 	3.2	 8.6	  	9.3
	September		 1.0	 	0.1	 6.9	  	6.7
	December		 6.2	 	6.5	 6.5	 	6.2
2001	March			14.2		11.2	 6.2	 	6.8
	June			14.3		13.9	 6.9	 	6.9
	September		14.4		21.2	13.0		11.0
	December		14.3		11.4	9.5		8.0

(1)	M1 figures include currency in the hands of the public and
cheque account balances only.



PUBLIC FINANCE AND FISCAL POLICY
Public Sector Financial System
No public money may be spent by the Government except pursuant to an
appropriation by Parliament.  At present, there are two methods of
appropriation.  The first is permanent appropriation, which covers
principally the payment of interest on debt and certain fixed charges
of the Government, and which does not require the passage of a
specific Appropriation Act by Parliament.  The second is by annual
appropriation, which provides for most of the expenditure of the
Government and which does require the passage of a specific Act or
Acts each year.

All borrowing by the Government is undertaken under the Public
Finance Act 1989, which provides that the Minister of Finance may
from time to time, if it appears necessary or expedient in the public
interest to do so, raise a loan from any person, organisation or
Government, either within or outside New Zealand, on such terms and
conditions as the Minister deems appropriate.


Public Sector Financial Management
In 1994, the fiscal deficit in New Zealand was eliminated after 10
years of difficult political decision-making and management reform.
Reform of the public sector financial management system was an
integral component of this.  New Zealand's public sector financial
management system is now underpinned by three key pieces of
legislation, the State Sector Act 1988, the Public Finance Act 1989
and the Fiscal Responsibility Act 1994.

State Sector Act 1988.  This Act defines the responsibilities of
chief executives of departments and their accountability to
Ministers.  The main objectives of the Act are to improve
productivity, to ensure that managers have greater freedom and
flexibility to manage effectively and, at the same time, to ensure
that managers are fully accountable to the Government for their
performance.  This has led to the formulation of performance
contracts between Ministers and chief executives.  These contracts
specify expectations of performance and provide a basis for
assessment, which may result in a combination of rewards or sanctions.

Public Finance Act 1989.  The Public Finance Act 1989 provides the
legislative basis for improving the quality and transparency of
financial management and information.  This is an essential component
of the accountability arrangements established under the State Sector
Act.

The driving principle behind the Public Finance Act is a move of
focus from what departments consume to what they produce.  Hence,
budgeting and reporting is on an output basis rather than relying
solely on information relating to how outputs are produced.
Departments were made responsible for outputs (the goods and services
they produce) while Ministers were made responsible for selecting the
output mix to achieve government outcomes (desired goals).

The Act requires the Crown and all its sub-entities to report on a
basis consistent with Generally Accepted Accounting Practice (GAAP).
This has significantly improved the comparability and reliability of
the financial information reported.

Consistent with the output focus, the Public Finance Act requires
additional disclosures such as statements of intent and statements of
service performance.  The documents go beyond disclosure of financial
information and require disclosure of objectives and service and
financial management performance.  In addition, the Act specifies
other Crown disclosures specific to the public sector such as a
statement of unappropriated expenditure and a statement of emergency
expenditure or expenses or liabilities.

From 1991, government departments and Offices of Parliament have
been required to prepare financial statements consistent with GAAP.
The first set of financial statements for the combined Crown (the
Government of New Zealand) was produced for the six months ended 31
December 1991.  The first annual set was produced for the financial
year ended 30 June 1992.  From 1 July 1992, the statements also
included the Crown's interest in State-Owned Enterprises and Crown
Entities.  Monthly Crown Financial Statements are now published for
the period of the financial year to the end of each month from
September onwards.

In addition, the Public Finance Act outlines requirements for ex
ante information essential for a robust system of government
budgeting.  The Public Finance Act specifies a number of specific
disclosures required for the Estimates (the Government's Budget
documentation).  Also as part of ex ante information disclosure
requirements, the Act requires departmental forecast reports, Crown
Entity statements of intent and statements of corporate intent for
State-Owned Enterprises.


The Fiscal Responsibility Act 1994

In 1994, Parliament enacted the Fiscal Responsibility Act, an Act to
promote consistent, good quality fiscal management.  Effective fiscal
management contributes to the economic health and performance of the
economy as a whole.

The Act provides the legislative framework for the conduct of fiscal
policy in New Zealand.  The Act encourages better decision-making by
the Government, strengthens accountability and ensures more informed
public debate about fiscal policy.

The Act works by requiring Governments to:

o	follow a legislated set of principles of responsible fiscal
management, and publicly assess their fiscal policies against these
principles.  Governments may temporarily depart from the principles
but must do so publicly, explain why they have departed, and reveal
how and when they intend to conform to the principles.

o	publish a "Budget Policy Statement" well before the annual Budget
containing their strategic priorities for the upcoming Budget, their
short-term fiscal intentions, and long-term fiscal objectives.  A
"Fiscal Strategy Report" that compares Budget intentions and
objectives with those published in the most recent Budget Policy
Statement is to be published in conjunction with the Budget.

o	fully disclose the impact of their fiscal decisions over a three-
year forecasting period in regular "Economic and Fiscal Updates".

o	present all financial information under Generally Agreed
Accounting Practice.

o	require the Treasury to prepare forecasts based on its best
professional judgement about the impact of policy, rather than
relying on the judgement of the Government.  It also requires the
Minister to communicate all of the Government's policy decisions to
the Treasury so that the forecasts are comprehensive.

o	refer all reports required under the Act to a parliamentary select
committee.

These requirements mean that the government of the day has to be
transparent about both its intentions, and the short and long-term
impact of its spending and taxation decisions.  Such transparency is
likely to lead governments to give more weight to the longer-term
consequences of their decisions and, therefore, is likely to lead to
more sustainable fiscal policy.  This increases predictability about,
and stability in, fiscal policy settings, which helps promote
economic growth and gives people a degree of certainty about the on-
going provision of government services and transfers.

The Fiscal Responsibility Act establishes a set of principles for
use as a benchmark against which the fiscal policies of the
Government can be judged by Parliament and its Finance and
Expenditure Committee.

These principles are

o	to reduce debt to prudent levels to provide a buffer against
future adverse events;

o	to run operating surpluses until prudent debt levels are achieved;

o	to maintain, on average, operating balance once prudent debt
levels are reached (i.e., the Government is to live within its means
over time, with some scope for flexibility through the business
cycle);

o	to achieve and maintain levels of net worth to provide a buffer
against adverse events;

o	to manage the risks facing the Crown;

o	to pursue policies that are consistent with a reasonable degree of
predictability about the level and stability of future tax rates.

The presumption is that governments should follow these principles.
Governments are allowed to depart temporarily from these principles
if they wish.  The legislation requires, however, that a government
specify its reasons for departure from the principles, how it expects
to return to the principles, and when.  This recognises the
difficulty of attempting to anticipate all future events and,
therefore, the need for some short-term policy flexibility, but also
requires that departures are transparent and should only be temporary.


Fiscal Policy Objectives

The Government's long-term fiscal objectives are:

Expenses:		Expenses will average around 35% of GDP over the horizon
used to calculate contributions toward future New Zealand
Superannuation (NZS) costs.  During the build-up of assets to meet
future NZS costs, expenses plus contributions will be around 35% of
GDP.  In the longer term, expenses less withdrawals to meet NZS costs
will be around 35% of GDP.

Revenue:			Raise sufficient revenue to meet the operating balance
objective.

A robust, broad-based tax system that raises revenue in a fair and
efficient way.

Operating Balance	Operating surplus on average over the economic
cycle sufficient to meet the requirements for contributions toward
future NZS costs and ensure consistency with the debt objective.

Debt:				Gross debt below 30% of GDP on average over the economic
cycle.

		Net debt, which excludes the assets to meet future NZS costs,
below 20% of GDP on average over the economic cycle.

Net Worth:  		Increase net worth consistent with the operating
balance objective.  This will be achieved through a build-up of
assets to meet future NZS costs.


Current Fiscal Position

The following table summarises the Government's fiscal position
according to Generally Accepted Accounting Practice in line with the
provisions of the Fiscal Responsibility Act 1994.

Crown Operating Statement(1)

							1996/97	1997/98	1998/99	1999/2000	2000/01	20001/02
						Budget (2)
Year ended 30 June							(dollar amounts in millions)
Revenue
   Levied through the Crown's Sovereign Power
	Direct taxation				20,489	21,260	20,289	21,499	23,863	24,226
	Indirect taxation				11,427	11,722	11,867	12,536	12,875	13,345
	Compulsory fees, fines, penalties
	and levies					263		258		300		376		385		519
	Subtotal					32,179	33,240	32,456	34,411	37,123	38,090
Earned through the Crown's Operations
	Investment income				1,596		1,154		2,901		1,157		1,369		1,207
	Sale of goods and services		664		689		683		641		659		670
	Other operational revenue		387		420		401		343		381		323
	Unrealised gains/(losses) arising 	(48)		78		(84)		(26)		(40)		-
	from revaluation of commercial forests
	Subtotal					2,599		2,341		3,901		2,115		2,369		2,200
TOTAL REVENUE					34,778	35,581	36,357	36,526	39,492	40,290
Total Revenue as a % of
GDP(3)		36.2%		36.3%		36.4%		35.2%		35.7%		33.9%
EXPENSES (by functional classification)
Social security and
welfare			12,620	13,003	12,906	12,896	13,216	13,649
GSF pension expenses				-		-		1,132		478		855		748
Health						5,626		6,001		6,573		6,874		7,342		7,797
Education						5,335		5,714		5,899		6,310		6,690		7,041
Core government services			1,667		1,562		1,705		1,710		1,817		1.611
Law and order					1,281		1,345		1,499		1,531		1,560		1,737
Defence						946		1,065		1,030		1,247		1,267		1,162
Transport and communications			888		948		1,029		1,036		1,026		1,103
Economic and industrial services		763		840		858		944		1,141		1,258
Heritage, culture and recreation		277		297		316		456		424		495
Primary services					351		423		334		265		287		337
Housing and community development		47		29		41		68		50		92
Other							68		167		34		45		75		137
Finance costs					3,072		2,804		2,516		2,373		2,483		2,345
Provision for future initiatives		-		-		-		-		-		90
Net foreign exchange losses/(gains)		12		13		(47)		(62)		(47)		1
TOTAL EXPENSES					32,953	34,211	35,825	36,171	38,186	39,603
Total expenses as % of
GDP(3)			34.3%		34.9%		35.8%		34.8%		34.5%		33.3%
Revenue less expenses				1,825 	1,370		532		355		1,306		687
Net surplus (deficit) less distributions
attributable to SOEs and Crown Entities	83
		1,164		1,245		1,094		103		298
OPERATING BALANCE					1,908		2,534		1,777		1,449		1,409		985
Operating Balance as a % of GDP(3)		2.0%		2.6%		1.8%		1.4%		1.3%		0.8%

(1)	Includes expenditure sought in the main and supplementary
estimates and anticipated expenditure under Permanent Legislative
Authority.

(2)	Budget revisions announced 18 December 2001

(3)	GDP:  Treasury estimate for June year.



Statement of Financial Position

The Statement of Financial Position (balance sheet) summarises the
Government's assets and liabilities as at 30 June 2001.  The
difference between total assets and total liabilities is termed the
Crown Balance, a measure of government net worth.

Statement of Financial Position

as at 30 June						2001		2000
							(dollar amounts in millions)
ASSETS
Cash and bank balances					115		210
Marketable securities and deposits			12,060	10,440
Advances							4,615		3,995
Receivables							6,197		5,520
Inventories							193		274
State-Owned Enterprises and Crown Entities	14,077	14,392
Other investments						354		338
Physical assets						16,102	15,972
Commercial forests					310		369
State highways						11,055	8,911
Intangible assets						3		2
TOTAL ASSETS						65,081	60,423
LIABILITIES
Payables and provisions					5,831		5,240
Currency issued						2,539		2,236
Borrowings							36,761	36,041
Pension liabilities					8,487		8,323
TOTAL LIABILITIES						53,618	51,840
TOTAL ASSETS LESS TOTAL LIABILITIES			11,463	8,583
CROWN BALANCE
Accumulated operating balance				3,456		382
Revaluation reserve					8,007		8,201
CROWN BALANCE						11,463	8,583


Taxation

The main taxes are the income tax and Goods and Services Tax (GST),
a value-added tax.  Both are applied at low rates to broad bases.
This is the result of the major tax reforms undertaken since the mid-
1980s.  The introduction of GST in 1986 marked a significant shift in
the mix of taxation from direct to indirect tax.

During 2000, the Government established a Ministerial Review into
the Tax System.  The Review team reported to Ministers in October
2001.  The Review found that the broad architecture of the tax system
is sound and that major changes are not needed, but made a number of
recommendations for further enhancements.  The Government will not be
adopting all of the Review's recommendations.  For example, it has
ruled out a number of proposals including a tax on owner-occupied
housing.  Prior to making final decisions, the Government has asked
officials to work through the design and implementation issues of the
Review's proposals on international tax to encourage direct foreign
investment and to simplify the tax treatment of entities.


Personal Income Tax

All income other than capital gains is taxed.  The effective
personal tax scale currently applying to people who earn wage and
salary income is as follows:  15% on income up to $9,500 per annum;
21% on income between $9,500 and $38,000, 33% on income between
$38,000 and $60,000 and 39% on income above $60,000.

Withholding taxes apply to wages and salaries and to interest income
and dividends.  Fringe benefits are taxed separately.

Tax credits are available to low-income families with children.

The tax treatment of pension funds and other savings is "TTE":
contributions are made from Tax-paid income, fund earnings are Taxed,
and withdrawals are Exempt.


Indirect Taxes

GST applies at a uniform rate of 12.5%.  Financial services and
housing rentals are exempt.  Additional indirect taxes are applied to
alcohol and tobacco products, to petroleum fuels and to gaming.
There are also cheque and gift duties.


Company Taxes

The company tax rate is 33%.  Imputation credits are attached to
dividends.  Inter-corporate dividends (other than from wholly-owned
subsidiaries) are taxed as income.  Depreciation rates for new assets
are based on the economic life of the asset plus a 20% loading.
There is immediate deductibility against income of forestry and
mineral mining development costs, petroleum exploration expenditure
and of most agricultural development costs.


International Taxation

The foreign-source income of New Zealand residents is subject to
tax, generally with a credit for foreign withholding taxes.  New
Zealand taxes its residents on an accrued basis on the income they
earn through non-resident entities in which they have an interest,
though not when derived from a "grey list" of seven countries with
comparable tax regimes.  These countries are taxed on a realisation
basis.  In addition, foreign-source dividends are subject to
withholding payments at a 33% rate, with a credit for foreign taxes.

The tax treatment of the New Zealand income of non-residents
encourages inward capital flows where this is feasible.  Interest
payments to non-residents are subject either to non-resident
withholding tax (at a 10% rate where a double tax agreement applies
and 15% otherwise) or to a 2% levy.  In the case of New Zealand
Government debt, the issuer absorbs the levy.

Dividends paid to non-residents are also subject to withholding
taxes.  Companies paying fully imputed dividends to non-resident
investors can receive a credit of part of the company tax paid, which
the company then pays to the investor.  The net effect is that the
maximum combined level of company tax and withholding tax is 33%.
The Government has implemented transfer pricing and thin
capitalisation regimes, and partially relieves New Zealand tax on
offshore income derived by New Zealand companies on behalf of non-
resident shareholders.



GOVERNMENT ENTERPRISES

State-Owned Enterprises

In May 1986, as an integral part of its overall economic strategy,
the Government announced a major programme for reform of government
enterprises.  The aim of the reforms was to improve the efficiency
and accountability of the enterprises and reduce the Government's
exposure to business risk.  To this end, the Government restructured
a large number of its departmental trading activities and established
them as businesses operating on a basis as close as possible to
private sector companies.

State-Owned Enterprises (SOEs) are required to operate on the basis
of principles and procedures contained in the State-Owned Enterprises
Act 1986. Under the Act, the Boards of SOEs have complete autonomy on
operational matters, such as to how resources are used, pricing and
marketing of output.  Competitive advantages and disadvantages,
including barriers to entry, have been removed, first, so that
commercial criteria provide an objective assessment of performance
and, secondly, to increase efficiency.  Under the Act, SOEs have no
responsibility for continuing non-commercial operations and the
Government is required to negotiate an explicit contract if it wishes
an SOE to carry out such activities.

Boards of directors drawn from the private sector have been formed
to manage SOEs.  Each Board is required to present to the
shareholding Ministers a statement of corporate intent and an outline
of business objectives, defining the nature and scope of activities
and performance targets.  These are closely monitored and SOEs are
expected to achieve performance targets and pay dividends on a basis
comparable to their private sector competitors.  The shareholding
Ministers may determine the levels of the dividends.

The SOEs borrow in their own names and on their own credit, in most
cases without a guarantee or other form of credit support from the
Government.  All SOEs have been informed that Government policy
requires that they disclaim in loan documentation the existence of
such guarantees or credit supports.

In January 2001, at the request of the Board of the company, the
Government placed Terralink New Zealand Limited, an SOE, in
receivership.  The Board notified the Government that the company had
insufficient reserves to pay its debts as they fell due.
Receivership was considered to offer the best opportunity to enable
the company to be sold for the benefit of the secured and unsecured
creditors.  Terralink was subsequently placed in liquidation after
its assets were sold.  The unsecured creditors are waiting the final
assessment of the Liquidator who is determining what repayment
unsecured creditors will receive.

Crown Entities

Crown Entity is a collective term for bodies owned by the Crown that
are not departments, Offices of Parliament or State-Owned
Enterprises.  Crown Entitites range from Crown Research Institutes to
regulatory bodies, such as the Commerce Commission and the Securities
Commission.  Crown Entities are required to table their annual
financial statements in Parliament.




Performance of Government Enterprises

The following tables show the Government's financial interest in
State-Owned Enterprises and Crown Entitiles (1).

	RevenuefromCrown$m	Totalrevenue$m	Attributablesurplus/(deficit)$m	Di
stributionsto Crown$m
State-Owned Enterprises
Agriquality New Zealand Limited			12		61		2		(1)
Airways Corporation of New Zealand Limited	-		103		5		(5)
Asure New Zealand Limited				-		39		(3)		-
At Work Insurance Limited				-		-		-		-
Electricity Corporation of New Zealand Limited	-		6		16		(45)
Genesis Power Limited					-		535		61		(15)
Land Corporation Limited				-		117		39		(19)
Meridian Energy Limited					-		771		123		(68)
Meteorological Service of New Zealand Limited	-		24		4		(4)
Mighty River Power Limited				-		647		60		(21)
New Zealand Post Limited				-		982		19		(7)
New Zealand Railways Corporation			-		2		-		-
Solid Energy New Zealand Limited			-		221		6		-
Television New Zealand Limited			-		481		27		(32)
Terralink New Zealand Limited				-		-		(3)		-
Timberlands West Coast Limited			-		24		(4)		-
Trans Power New Zealand Limited			-		496		80		(87)
Total State-Owned Enterprises				12		4,509		432		(304)

Crown Entities
Accident Compensation Corporation (2)		383		2,292		(313)		-
Crown research institutes				207		484		24		(4)
District Health Boards (including the  Residual
Health Management Unit)					3,399		3,706		(45)		-
Earthquake Commission					-		323		241		-
Health Funding Authority				3,074		3,079		(13)		-
Housing Corporation of New Zealand			-		2		-		(12)
Housing New Zealand Limited				158		512		41		-
Museum of New Zealand Te Papa Tongerewa		18		37		(7)		-
New Zealand Fire Service Commission			1		205		4		-
School boards of trustees				2,830		3,216		-		-
Tertiary education institutions			1,047		2,227		65		-
Other								1,682		3,507		(5)		(1)
Total Crown Entities					12,799	19,590	(8)		(17)
Total Financial Interest in State-Owned
Enterprises and Crown
Entities							12,811	24,099	424		(321)

(1)	Except for those entities listed below, all State-Owned
Enterprises and significant Crown Entities have a balance date of 30
June, and the information reported in these tables is for the period
ended 30 June 2001.


	State-Owned Enterprises			Balance date	Information reported to
	Timberlands West Coast Limited	31 March		31 March 2001
	Crown Entities
	School boards of trustees		31 December		31 December 2000
	Tertiary education institutions	31 December		31 December 2000

(2)	The attributable surplus of ACC includes $420 million for the
ACC outstanding claims liability revaluation movement.



							Physical	Total		Long-term	Total		Equity at
							Assets	Assets	Borrowings	Liabilities	30 June
															2001

State-Owned Enterprises
Agriquality New Zealand Limited		10		25		-		10		15
Airways Corporation of New Zealand
Limited						82		104		36		61		43
Asure New Zealand Limited			-		12		-		7		5
At Work Insurance Limited			-		5		-		-		5
Electricity Corporation of New Zealand
Limited						-		867		817		845		22
Genesis Power Limited				745		1,105		31		257		848
Landcorp Farming Limited			521		561		44		70		491
Meridian Energy Limited				2,332		2,669		180		889		1,780
Meteorological Service of New Zealand
Limited						7		13		1		5		8
Mighty River Power Limited			1,387		1,614		330		901		713
New Zealand Post Limited			283		630		204		421		209
New Zealand Railways Corporation		2		9		-		2		7
Solid Energy New Zealand Limited		44		131		69		88		43
Television New Zealand Limited		240		520		83		177		343
Terralink New Zealand Limited			-		-		-		-		-
Timberlands West Coast Limited		2		79		-		7		72
Trans Power New Zealand Limited		2,103		2,280		854		1,330		950
Total State-Owned Enterprises			7,758		10,624	2,649		5,070		5,554

Crown Entities
Accident Compensation Corporation		83		3,781		-		7,660		(3,879)
Crown research institutes			276		435		13		116		319
Earthquake Commission				1		3,897		-		56		3,841
Health Funding Authority			-		-		-		-		-
District Health Boards (including the
Residual Health Management Unit)		2,015		2,632		1,043		1,697		935
Housing Corporation of New Zealand		180		297		99		252		45
Housing New Zealand Limited			4,176		4,185		751		1,335		2,850
Museum of New Zealand Te Papa Tongerewa	830		847		-		6		841
New Zealand Fire Service Commission		269		283		21		98		185
School boards of trustees			720		1,383		19		557		826
Tertiary education institutions		2,257		2,725		108		547		2,178
Other							129		945		2		563		382
Total Crown Entities				10,936	21,410	2,056		12,887	8,523
Total Financial Interest in State-Owned
Enterprises and Crown Entities		18,694	32,034	4,705		17,957	14,077



sting legislation, amounts payable in respect of principal
and interest upon New Zealand securities are a charge upon the public
revenues of New Zealand, payable under permanent appropriation. All
of the indebtedness of New Zealand is otherwise unsecured.

The proceeds from the domestic bond programme will be used to
refinance maturing domestic term debt and to finance the forecast
cash deficit during 2001/02 and to partially prefund the 2002/03
borrowing requirement.


Debt Record

New Zealand has always paid when due the full amount of principal,
interest and amortisation requirements upon its external and internal
debt, including guaranteed debt.



(1)	The debt figures in this section are presented in nominal
dollars and relate solely to the core Crown entity.  In this respect,
they may differ from the debt figures as disclosed in the Crown
Financial Statements of New Zealand.  The latter are presented in
accordance with generally accepted accounting practice and also
include the net debt of the Reserve Bank of New Zealand.




Summary of Direct Public Debt

The following table sets forth the direct funded and floating debt
of the Government on the dates indicated. For the purposes of all
debt tables herein, "funded debt" means indebtedness with an original
maturity of one year or more and "floating debt" means indebtedness
with an original maturity of less than one year.

Direct Public Debt

As at 30 June				1997		1998		1999		2000		2001
	(dollar amounts in millions)
Funded Debt(1)
	Internal (2)			24,769.0	22,665.4	25,644.7	25,318.0	26,204.5
	External (3)(4)			4,302.2	5,923.3	5,157.2	5,401.5	6,148.4
Floating Debt
	Internal Debt (5)			7,683.6	9,378.9	5,980.0	5,500.0	5,675.0
	External Debt (3)(6)		614.6		781.3		652.9		1,174.3	370.1
Total Direct Debt				37,369.4	38,748.9	37,434.8	37,393.8	38,398.0
Total Public Debt as a % of GDP(7)	39.6%		39.2%		37.7%		35.5%		34.1%


(1)	Includes the effect of swap transactions.  Excludes indebtedness
to international financial organisations arising from membership.

(2)	Includes Government Wholesale Bonds, Kiwi Bonds, Index-Linked
Bonds.

(3)	External debt is converted at the mid-point of the 3:00 P.M.
spot rate on 30 June for each year.

(4)	Includes Public Bonds, Private Placements, Syndicated Loans, and
Medium Term Notes.

(5)	Treasury Bills and Reserve Bank Bills.

(6) 	Includes Sovereign Notes and Euro-Commercial Paper.

(7) 	GDP: Treasury Estimate for June years.



Direct Public Debt by Currency of Payment

The following table shows the direct public debt of New Zealand at
30 June 2001 by currency of payment after swap positions are taken
into account and shows the estimated interest for the year ending 30
June 2002 including swap positions.

Direct Public Debt by Currency of Payment

								Amount Outstanding as	Estimated Interest for the
					 			as at 30 June 2001(1)	year to 30 June 2002(2)
External Debt					   	 (dollar amounts in millions)
	Repayable in United States Dollars		4,073.1			184.2
	Repayable in Japanese Yen			1,294.2			65.2
	Repayable in Pounds Sterling			70.3				0.6
	Repayable in Euro					0.0				27.9
	Repayable in Deutschmarks			0.0				11.5
	Repayable in Swiss Francs			78.7				0.3
	Repayable in Other Currencies			506.5				0.0
Internal Debt						32,331.5			2,254.3
Subtotal							38,354.3			2,544.0
	Swaps							43.7				-
Total Direct Public Debt				38,398.0			-

(1) 	Converted at the midpoint of the 3:00 P.M. spot exchange rates
on 30 June 2001 which were:

NZD 1 = US$0.4053 = Yen 50.2150 = = Pounds 0.2876 = SwFr 0.7288 =
Aus$ 0.7996 = ITL 928.151

(2)	In some cases interest payments are offset by interest receipts.

As part of its debt management activities, the Government enters
into currency swap arrangements which have the effect of converting
to a different currency principal obligations on New Zealand's
external debt.

The following table sets forth by currency the estimated payments of
principal, including mandatory amortisation provisions, to be made on
the external direct public debt of New Zealand as at 30 June 2001,
shown in New Zealand dollars based on rates of exchange on that date
and with adjustment to reflect the effect of currency swap
arrangements.

Details of External Public Debt at 30 June 2001 (1)(2)
																	2008-
						2002		2003		2004		2005		2006		2007	2011	2012+	Total
Maturing in year ended 30 June                     (dollar amounts
in millions)
United States dollar			1,348		113		494		288		337		464	328	651	4,023
Japanese Yen				830		384		-		100		-		-	-	198	1,512
British pounds				-		-		-		-		(58)		-	53	17	12
Euro						(194)		-		342		194		128		-	53	-	523
Deutschmark					-		-		-		-		128		127	-	-	255
Swiss franc					-		-		-		-		-		-	-	-	-
Italian Lira				194		-		-		-		-		-	-	-	194
Total External Debt			2,178		497		836		582		535		591	434	866	6,519
Percentage of Total Foreign
Debt	33.4		7.6		12.8		8.9		8.2		9.1	6.7	13.3	100.0

(1)	Adjusted to reflect effect of currency swap arrangements.

(2)	Includes Sovereign Note Programme (notes not exceeding 270 days
to maturity) and Euro-Commercial Paper Programme (notes not exceeding
365 days to maturity).



Interest and Principal Requirements
For the year ended 30 June 2001, the total payment of interest on
public debt of the Government was $2,620 million. The following table
indicates the movements in external interest-bearing public debt
since 1992, excluding swap positions.

Movements in External Public Debt

					External Debt(1)			Interest Charges
							As % of
				Amount (2)		Total 		Amount	As % of
							Public Debt				Exports(3)
	(dollar amounts in millions)

30 June 1992		20,136.1		42.7			1,667.5	7.5
30 June 1993		18,521.8		38.4			1,469.0	6.1
30 June 1994		15,527.3		33.6			1,142.3	4.5
30 June 1995		12,014.8		26.9			1,044.5	3.9
30 June 1996		8,927.4		21.2			725.2		2.7
30 June 1997		5,262.5		14.1			559.1		2.1
30 June 1998		6,995.5		18.1			409.3		1.4
30 June 1999		6,053.1		16.2			402.9		1.3
30 June 2000		6,633.2		17.7			413.9		1.2
30 June 2001		6,022.8		15.7			404.5		0.9


(1)	Excludes non-interest-bearing indebtedness to international
organisations.

(2)	External debt is converted at the midpoint of the 3:00 P.M. spot
exchange rate on 30 June in each case.

(3)	Based on exports of goods and services for each year.



The following table sets forth the maturity dates of New Zealand
public debt outstanding as at 30 June 2001, including the effect of
swap positions.

Loans Maturing in Year Ending 30
June(1)	External(2)		Internal		Total Debt
								(dollar amounts in millions)
2002							1,808.2		3,206.3		5,014.5
2003							497.4			3,811.5		4,308.9
2004							835.6			3,559.1		4,394.7
2005							582.1			2,004.2		2,586.3
2006							535.0			(124.3)		410.7
2007							590.0			3,712.5		4,302.5
2008 to 30 June 2011				434.0			3,598.8		4,032.8
After 30 June 2011				866.1			5,938.1		6,804.2
Treasury Bills					-			5,675.0		5,675.0
Other							370.1(3)		498.3(4)		868.4
Total							6,518.5		31.879.5		38,398.0

(1)	With respect to many of the loans, the Government has the option
to redeem the securities at an earlier date.

(2)	Converted at the mid-point of the 3:00 P.M. spot exchange rate
on 30 June 2001.

(3)	Sovereign Note Programme (notes not exceeding 270 days to
maturity) and Euro-Commercial Paper Programme (notes not exceeding
365 days to maturity).

(4)	Retail Stock.


TABLES AND SUPPLEMENTARY INFORMATION

Table I - Internal Debt as of 30 June 2001

Currency			Principal			Maturity		Coupon 		Fiscal Year		Amortization
				Outstanding			Date			Rate			of Issue

Government Stock		75,962,000 			15/09/01 		4.55			1984
				3,059,835,000 		15/03/02 		10.00			1991
				3,763,000,000		15/04/03		5.50			1999
				3,672,500,000 		15/04/04 		8.00			1992
				1,990,000,000		15/02/05		6.50			2001
				3,711,800,000 		15/11/06 		8.00			1994
				3,855,000,000 		15/07/09 		7.00			1998
				3,916,000,000		15/11/11		6.00			1999
				350,000,000			15/04/13		6.50			2001
				1,661,084,100 		15/02/16 		4.50			1996
				26,055,181,100

Treasury Bills		5,675,000,000 	11/07/01 - 19/06/02	5.52 - 7.18		2001

Loans				70,000,000 			15/10/01 		10.00			(1)
				1,439,200 			01/04/04 		16.00			(2)
				1,500,000 			01/06/04 		16.00			(2)
				2,500,000 			01/08/04 		16.00			(2)
				2,525,000 			01/10/04 		16.00			(2)
				5,000,000 			01/10/04 		16.00			(2)
				3,500,000 			15/06/05 		8.00			(2)
				10,575,713 			01/09/13 		Variable		1994		1997-2013
				5,995,500 		15/07/01 - 01/03/17	4.00-10.50		(3)
				103,035,413

Retail Stock		39,618,258		01/07/01 - 30/09/01	6.25 - 7.25		1997-98(4)
				5,388,157		26/08/01 - 28/02/02	6.25 - 6.75		1998(4)
				578,161		12/02/02 - 10/04/02	6.25 - 6.75		1998(4)
				10,953,191		09/04/02 - 29/08/02	6.50 - 7.00		1998-99(4)
				538,937		04/08/02 - 26/09/02	6.00 - 6.50		1999(4)
				7,509,393		23/09/02 - 23/10/02	5.50 - 6.00		1999(4)
				2,323,477		02/09/02 - 30/11/02	5.50 - 6.00		1999(4)
				824,342		27/10/02 - 30/12/02	4.50 - 5.00		1999(4)
				1,521,437		19/11/02 - 31/01/03	4.50 - 5.00		1999(4)
				35,847,761		01/07/01 - 05/10/03	4.00 - 5.00		1999-2000(4)
				18,302,069		17/09/01 - 12/12/03	5.00 - 6.00		2000(4)
				5,178,950		13/12/01 - 13/01/04	5.25 - 6.25		2000(4)
				31,027,255		14/01/02 - 31/05/04	6.00 - 6.75		2000(4)
				9,936,459		10/04/02 - 08/06/04	6.00 - 6.50		2000(4)
				69,430,857		01/07/01 - 29/10/04	6.00 - 6.75		2000(4)
				79,830,499		01/07/01 - 28/02/05	5.75 - 6.25		2001(4)
				131,584,788		29/07/01 - 25/06/05	5.00 - 5.75		2001(4)
				1,035,900		26/12/01 - 27/06/05	5.00 - 5.75		2001(4)
				46,885,000			Call			3.00			5)
				498,314,891

Total NZDInternal Debt	32,331,531,404


(1)	Debt of the Electricity Corporation of New Zealand for which the
Government assumed responsibility on 1 February 1996, subsequent to
its fiscal issue date.

(2)	Debt of the Area Health Boards for which the Government assumed
responsibility on 2 August 1993, subsequent to its fiscal issue date.

(3)	Debt of the Ministry of Transport for which the Government
assumed responsibility on 1 July 1997, subsequent to its fiscal issue
date.

(4)	Kiwi Bonds
Repayable at holder's option upon seven business days' notice.

(5)	Income Equalisation Reserve Deposits
Repayable at holder's option (subject to criteria under the Income
Tax Act 1976) or after five years.


Table II - External Debt as of 30 June 2001

Currency			Principal			Maturity		Coupon 		Fiscal Year		Amortization
				Outstanding			Date			Rate			of Issue

USD				106,386,000 		Call			Variable		2001
				50,000,000 			02/10/01 		6.57			2001
				50,000,000			25/10/01		6.46			2001
				50,000,000			17/01/02		5.10			2001
				25,000,000			27/02/02		4.64			2001
				65,000,000			28/03/02		6.52			2001
				50,000,000			23/05/02		4.01			2001
				300,000,000			20/01/04		5.25			1999
				200,000,000 		06/10/04 		6.25			1998
				136,580,000 		15/11/05 		10.63			1986
				257,855,000 		15/12/06 		8.75			1987
				40,635,000 			15/01/11 		9.88			1986
				113,229,000 		01/04/16 		8.75			1987
				55,943,000 			25/09/16 		9.13			1987
				150,000,000 	Euro-commercial Paper Program
				1,650,628,000
JPY				13,000,000,000 		24/04/02 		5.20			1987
				9,540,000,000 		10/06/02 		7.71			1992
				9,450,000,000 		10/07/02 		7.74			1992
				5,000,000,000		28/08/02		0.40			2001
				2,000,000,000 		11/10/02 		4.20			(1)
				1,000,000,000 		11/10/02 		4.00			(1)
				5,000,000,000 		05/08/04 		4.64			1995
				10,000,000,000		11/05/12		2.59			2000
				10,000,000,000 		27/11/12 		6.34			1993
				64,990,000,000
GBP				15,407,431 			04/05/08 		11.25			1983
				4,816,651 			25/09/14 		11.50			1985
				20,224,082

CHF				57,325,000 			10/01/06 		5.75			(2)

AUD				250,000,000 		05/03/03 		2.00			1993

ITL				45,000,000,000 		10/06/02 		7.70			1992
				45,000,000,000 		10/06/02 		7.71			1992
				45,000,000,000 		25/06/02 		7.70			1992
				45,000,000,000 		25/06/02 		7.71			1992
				180,000,000,000

(1)	Debt of the Electricity Corporation of New Zealand for which the
Government assumed responsibility on 1 February 1996, subsequent to
its fiscal issue date.

(2)	Debt of the New Zealand Railways Corporation for which the
Government assumed responsibility on 1 January 1990, subsequent to
its fiscal issue date.


Table III - External Debt Issued 1 July 2001 to 31 January 2002


		Principal		Maturity		Coupon
Currency	Outstanding		Date			Rate		Amortization

USD		40,000,000		09/07/02		3.80


Contingent Liabilities and Non-Quantifiable Guarantees

Pursuant to Section 27(f) of the Public Finance Act 1989, a
Statement of Contingent Liabilities must be provided, including
guarantees given under Section 59 of the Act.

Statement of Contingent Liabilities

								30 June 2001	30 June 2000
Quantifiable Contingent Liabilities			   (dollar amounts in millions)

Guarantees and Indemnities				371			592
Uncalled Capital						3,594			3,210
Legal Proceedings and Disputes			499			542
Other Contingent Liabilities				2,037			1,983
TOTAL QUANTIFIABLE CONTINGENT LIABILITIES		6,501			6,327

Contingent liabilities of the Reserve Bank of New Zealand, State-
Owned Enterprises and Crown Entities are included in the combined
Crown classification.  Contingent liabilities in respect of sub-
entities are excluded.

Non-Quantifiable Contingent Liabilities

The following lists those contingent liabilities of the Crown which
cannot be quantified.  Contingent liabilities in respect of sub-
entities are included.

Institutional Guarantees

Commerce Commission
District Court Judges, Justices of the Peace, Coroners and Dispute
Tribunals
Earthquake Commission Fund
Maori Trustee
Ministry of Fisheries
National Provident Fund
Persons Exercising Investigating Powers
Public Trust Office
Reserve Bank of New Zealand

Other Contingent Liabilities

Bank of New Zealand
Contaminated Sites
Crown Research Institutes
Development Finance Corporation Limited
District Health Boards
Electricity Corporation of New Zealand Limited
Fletcher Challenge Limited
Housing Corporation of New Zealand
Housing New Zealand Limited
Pharmaceutical Management Agency
Purchasers of Crown Operations
Sale of Crown Assets
Tax Liabilities
Treaty of Waitangi Claims
Works Civil Construction
Works Consultancy Services