What circumstances have led, or are expected to lead, Health New Zealand to need to access the Standby Credit facility?

Answer

I am advised that the $200 million Standby Credit Facility (SCF) was established in May 2023 to manage potential liquidity risks and ensure sufficient working capital when required. The Health New Zealand Treasury policy requires that a minimum liquidity buffer of $300 million be retained relative to the inflows/outflows of c$2.7 billion each month. The SCF forms part of this liquidity buffer. To date, no drawings have been made against the SCF. I am further advised that future drawdowns of the SCF could be required if, for example, operating deficits exceed budget; there are short-term mismatches between timing of funding receipts and expenditure; the rate of capital spend exceeds budget; timing of Holidays Act remediation payments or Collective agreement settlements is not aligned to funding, or for paying suppliers more quickly than budgeted.