The bill is necessary to provide the express statutory authority required to issue loans under the Public Finance Act 1989. The practice of issuing consular loans did not require express authority under the Public Finance Act until that Act was amended in 2013. The need to provide express authority to enable the ongoing provision of consular loans was only identified by officials in 2020, a period of unusually high demand for consular loans caused by the COVID-19 pandemic. The bill provides that loans may be issued to a New Zealand citizen or permanent resident who is in distress and where exceptional circumstances exist and if doing so would provide short-term assistance and be consistent with New Zealand's consular functions. Such loans are an important tool for assisting New Zealanders offshore whose immediate health and safety is at risk and who have no other means of financial assistance in order to resolve that situation.