Export credit support extended for three more yearsFinance
The Government has extended the full range of support the New Zealand Export Credit Office provides to exporters for another three years, Finance Minister Bill English says.
"As the recovery takes hold, exporters still face difficulty getting the trade credit and financial guarantees they need to maintain existing overseas markets and establish new ones," Mr English says.
"This Government has made it clear that one of the best ways to ensure New Zealand grows strongly out of the recession is to increase exports and investment.
"We are doing all we can to help exporters and ensuring they have the credit insurance and trade finance to maximise opportunities that flow out of the fragile global recovery is a crucial part of that.
"New Zealand is well placed to benefit from growing demand for our quality products, but we must make sure our exporters have the full range of tools they need in the current climate to trade with the rest of the world."
The decision to extend the mandate of the Export Credit Office (NZECO) to June 30, 2014 follows a review of its function and performance.
The Government will also extend the NZECO's ability to provide short-term credit insurance, which it began offering in 2009 as a temporary measure for exporters affected by the global financial crisis, for another three years. It was previously set to finish after June 30, 2011.
In addition, the Government has decided to provide the NZECO with more flexibility in the way it operates by:
• Removing individual limits on specific insurance products as long as it remains with its total $740 million maximum risk exposure.
• Extending its authority to support New Zealand subsidiaries based overseas.
• Authorising the NZECO to share risks with other export credit agencies.
"This extra flexibility will enable NZECO to respond to demand, while reducing its administrative burden," Mr English says.
Set up in July 2001, the NZECO offers financial guarantees and insurance to exporters and banks, to support commercially sound deals that the private sector lacks the capacity or appetite for. The NZECO works in partnership with the private sector and does not provide direct lending.
It has supported more than $1 billion of total exports since it was established. Its function and performance will be reviewed again in three years.
More information on the NZECO can be found at http://www.nzeco.govt.nz.