Estimates of appropriations

Vote Defence - External - Estimates 2014/2015

APPROPRIATION MINISTER(S): Minister of Defence (M22)

APPROPRIATION ADMINISTRATOR: Ministry of Defence

RESPONSIBLE MINISTER FOR MINISTRY OF DEFENCE: Minister of Defence

Summary of the Vote#

Overview#

The Minister of Defence is responsible for appropriations in the Vote for the 2014/15 financial year covering the following:

  • a total of $1.927 million for evaluations, audits and assessments of the New Zealand Defence Force and Ministry of Defence
  • a total of $3.669 million for managing procurement or refurbishment, on behalf of the Crown, of various items of equipment contributing to a capability of the New Zealand Defence Force
  • a total of $5.970 million for policy advice, management of international defence relations and services to the Minister
  • a total of $320,000 for the purchase or development of assets for use by the Ministry, and
  • a total of $464.984 million for the purchase, modification or refurbishment of major items of defence equipment for the New Zealand Defence Force.

Details of these appropriations are set out in Parts 2-4.

Estimates of Appropriations#

Details of Appropriations and Capital Injections#

Annual and Permanent Appropriations

2013/142014/15
Titles and Scopes of Appropriations by Appropriation TypeBudgeted
$000
Estimated
Actual
$000
Budget
$000

Departmental Output Expenses

Evaluation, Audit & Assessment of Performance (M22)

This appropriation is limited to the evaluations, and audits and assessments of the New Zealand Defence Force and the Ministry of Defence.
2,0832,0831,927

Management of Equipment Procurement (M22)

Managing procurement or refurbishment, on behalf of the Crown, of various items of equipment contributing to a capability of the New Zealand Defence Force.
5,4905,4903,669

Policy Advice and Related Outputs MCOA (M22)

6,0476,047-
Ministerial Services
This output class is limited to the provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.
726726-
Policy Advice
This output class is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to defence and national security.
3,6403,640-
Policy Support
This output class is limited to the provision of services (other than defence policy) that support the development and procurement of military capability, and the conduct of international defence relations.
1,6811,681-

Total Departmental Output Expenses

13,62013,6205,596

Departmental Capital Expenditure

Ministry of Defence - Capital Expenditure PLA (M22)

This appropriation is limited to the purchase or development of assets by and for the use of the Ministry of Defence, as authorised by section 24(1) of the Public Finance Act 1989.
560560320

Total Departmental Capital Expenditure

560560320

Non-Departmental Capital Expenditure

Defence Equipment (M22)

This appropriation is limited to the purchase, modification or refurbishment of major items of defence equipment for the New Zealand Defence Force.
286,600286,600464,984

Total Non-Departmental Capital Expenditure

286,600286,600464,984

Multi-Category Expenses and Capital Expenditure

Policy Advice and Related Outputs MCA (M22)

The overarching purpose of this appropriation is to provide policy advice, other support to Ministers in discharging their policy decision-making and other portfolio responsibilities.
--5,970
Departmental Output Expenses
Ministerial Services
This category is limited to the provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.
--717
Policy Advice
This category is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to defence and national security.
--3,593
Policy Support
This category is limited to the provision of services (other than defence policy) that support the development and procurement of military capability, and the conduct of international defence relations.
--1,660

Total Multi-Category Expenses and Capital Expenditure

--5,970

Total Annual and Permanent Appropriations

300,780300,780476,870

Supporting Information#

Part 1 - Vote as a Whole#

1.1 - New Policy Initiatives

 

Policy InitiativeAppropriation2013/14
Budgeted
$000
2014/15
Budget
$000
2015/16
Estimated
$000
2016/17
Estimated
$000
2017/18
Estimated
$000
Frigate Systems Upgrade (pre-acquisition costs)Management of Equipment Procurement1,000----
Frigate Systems UpgradeDefence Equipment10,000158,000105,000115,00042,522
ANZAC Platform Systems Upgrade: Phase IIDefence Equipment6,00012,400---
Protector Remediation: Phase IIDefence Equipment14,05019,150---
Strategic Bearer NetworkDefence Equipment5,6346,338---
Medium and Heavy Operational VehiclesDefence Equipment58,20050,700---
Maritime Helicopter CapabilityDefence Equipment50,000120,00040,00012,200-
Pilot Training CapabilityDefence Equipment93,94041,2807,120--

Summary of Financial Activity#

2009/102010/112011/122012/132013/142014/152015/162016/172017/18
Actual
$000
Actual
$000
Actual
$000
Actual
$000
Budgeted
$000
Estimated
Actual
$000
Departmental
Transactions
Budget
$000
Non-
Departmental
Transactions
Budget
$000
Total
Budget
$000
Estimated
$000
Estimated
$000
Estimated
$000

Appropriations

Output Expenses6,3205,3595,9147,8537,5737,5735,596-5,5965,3965,4855,196
Benefits or Related Expenses------N/A-----
Borrowing Expenses------------
Other Expenses------------
Capital Expenditure160,254144,613102,463132,834286,600256,600320464,984465,304169,323202,90342,872
Intelligence and Security Department Expenses and Capital Expenditure-------N/A----
Multi-Category Expenses and Capital Expenditure (MCA)
Output Expenses
4,6914,7045,2055,4346,0476,0475,970-5,9705,9705,9705,970
Other Expenses
------------
Capital Expenditure
------N/A-----

Total Appropriations

171,265154,676113,582146,121300,220270,22011,886464,984476,870180,689214,35854,038

Crown Revenue and Capital Receipts

Tax Revenue------N/A-----
Non-Tax Revenue25131455100--N/A-----
Capital Receipts174,118135,797154,331176,315286,600256,000N/A297,184297,18463,99321,189-

Total Crown Revenue and Capital Receipts

174,369135,828154,786176,415286,600256,000N/A297,184297,18463,99321,189-

Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered.

Adjustments to the Summary of Financial Activity table due to Vote Restructuring#

2009/10
Adjustments
$000
2010/11
Adjustments
$000
2011/12
Adjustments
$000
2012/13
Adjustments
$000
2013/14
Budgeted
Adjustments
$000
2013/14
Estimated
Actual
Adjustments
$000

Appropriations

Output Expenses(4,691)(4,704)(5,205)(5,434)(6,047)(6,047)
Benefits or Related Expenses------
Borrowing Expenses------
Other Expenses------
Capital Expenditure------
Intelligence and Security Department Expenses and Capital Expenditure------
Multi-Category Expenses and Capital Expenditure (MCA)
Output Expenses4,6914,7045,2055,4346,0476,047
Other Expenses------
Capital Expenditure------

Total Appropriations

-

-

-

-

-

-

Crown Revenue and Capital Receipts

Tax Revenue------
Non-Tax Revenue------
Capital Receipts------

Total Crown Revenue and Capital Receipts

------

The prior year information in the Summary of Financial Activity table has been restated to reflect that the Ministry has converted a Policy related multi-class output appropriation to a Policy related multi-category expenses appropriation.

The departmental appropriations in Vote Ministry of Defence, which are detailed in the Summary of Financial Activity table in Part 1.2 above, show the significant changes discussed below.

Departmental Output Expense Appropriations

Year-on-year individual output expenses are largely constant. The main impacts on the consistency of these expenses are due to the costs of pre-acquisition activities undertaken by the Ministry, which are funded by the NZDF, and project management costs for the Protector Remediation project.

Multi-Category Expense Appropriations

The primary impact on this appropriation was increased funding commencing 2011/12 to strengthen resources that would provide a greater governance oversight during the development of capability proposals, and the subsequent acquisition of those capability resources. The reduced costs in 2012/13 and the increase in 2013/14 are due to the delayed costs of an organisational review following the Performance Improvement Framework review. These costs were delayed in 2012/13 until a new Secretary of Defence had been appointed.

Departmental Capital Expenditure

The majority of the capital expenditure over the years relates to the Ministry of Defence's contribution towards the fit-out of the new Defence House in Aitken Street in Wellington. Other capital expenditure relates primarily to IT software and equipment required by the Ministry to deliver its stated outcomes and outputs.

Non-Departmental Capital Expenditure

The movements in capital expenditure in each of the years 2009/10 to 2017/18 relates to the volume of projects underway in each financial year and changes in the forecast timing of achievement of project milestones and associated changes in the timing of payments for those milestones.

Capital Receipts

The Ministry of Defence receives capital receipts from the New Zealand Defence Force from the sale of defence equipment. Changes in capital receipts during the years 2009/10 to 2013/14 reflect the number, structure and scope of the projects undertaken on behalf of the Crown during the same time period. Years 2014/15 to 2017/18 reflect the anticipated number, structure and scope of the projects to be undertaken on behalf of the Crown during the same time period.

1.4 - Reconciliation of Changes in Appropriation Structure#

Old StructureNew Structure
2013/14 Appropriations
in the 2013/14 Structure
2013/14
(Current)
$000
Appropriations to which
Expenses (or Capital
Expenditure) have been Moved from or to
Amount
Moved
$000
2013/14 Appropriations
in the 2014/15 Structure
2013/14
(Restated)
$000
2014/15
$000

Departmental Output Expense

Policy Advice and Related Outputs MCOA6,047From Policy Advice and Related Outputs MCOA6,047To Policy Advice and Related Outputs MCA6,0475,970

Total Changes in Appropriations

6,0476,0476,0475,970

Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-4.

Part 2 - Details of Departmental Appropriations#

2.1 - Departmental Output Expenses#

Evaluation, Audit & Assessment of Performance (M22)

Scope of Appropriation

This appropriation is limited to the evaluations, and audits and assessments of the New Zealand Defence Force and the Ministry of Defence.

Expenses and Revenue

2013/142014/15
Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation2,0832,0831,927
Revenue from the Crown2,0832,0831,927
Revenue from Others---

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the completion of an approved schedule of evaluations, audits and assessments as required by the Minister of Defence.

How Performance will be Assessed and End of Year Reporting Requirements

2013/142014/15
Assessment of PerformanceBudgeted
Standard
Estimated Actual
Standard
Budget
Standard
Evaluations, audits and assessments are in accordance with work priorities identified and advised by the Minister of Defence.Standard metStandard metStandard met
Evaluations, audits and assessments follow the Ministry's quality assurance processes. Measured by an internal review of a random sample of reports produced in the year to assess if they comply with the Ministry's minimum quality assurance standards.Standard metStandard metExpired measure
A review of the evaluations, audits and assessments confirm that they meet acceptable standards based on pre-determined criteria. The standard for this measure is based on a continuum of standard not met, standard met and standard exceeded.Standard metStandard metStandard met

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Ministry of Defence in its Annual Report.

Reasons for Change in Appropriation

The appropriation for 2014/15 has reduced by $156,000 due to the 2013/14 appropriation including allowance for costs of implementing the recommendations of the Performance Improvement Framework review.

Conditions on Use of Appropriation

ReferenceConditions
AuthorityThe evaluation, audit or assessment will be undertaken as and when required by the Minister of Defence or in accordance with a work programme approved by the Minister.

Management of Equipment Procurement (M22)#

Scope of Appropriation#

Managing procurement or refurbishment, on behalf of the Crown, of various items of equipment contributing to a capability of the New Zealand Defence Force.

Expenses and Revenue#

2013/142014/15
Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation5,4905,4903,669
Revenue from the Crown3,9863,9863,669
Revenue from Others1,5041,504-

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the management of procurement of major military equipment in a transparent and fair way, and in accordance with government procurement policies.

How Performance will be Assessed and End of Year Reporting Requirements#

2013/142014/15
Assessment of PerformanceBudgeted
Standard
Estimated Actual
Standard
Budget
Standard
Cost: Each procurement or refurbishment project will be managed within its approved budget, inclusive of approved variations to the contract price and project budget. The measure is the % of all project-related expenditure incurred in the year that is in excess of the approved project expenditure.0%0%0%
Quality of Deliverable: Each procurement or refurbishment project will achieve on delivery the agreed/contracted specifications that are critical to acceptance. (Note 1) The measure is the number of accepted projects that do not meet all specifications that are critical to acceptance.000
Schedule: Each procurement or refurbishment project will be managed to schedule, without avoidable schedule over-run. The measure is the % of all projects where, during the year, the project delivery schedule is extended by more than 10%.0%17%0%

Note 1 - This is measured by test, trial, evaluation, demonstration, independent audit or certification, and other measurements as agreed for each project.

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Ministry of Defence in its Annual Report.

Current and Past Policy Initiatives#

Policy InitiativeYear of
First
Impact
2013/14
Budgeted
$000
2014/15
Budget
$000
2015/16
Estimated
$000
2016/17
Estimated
$000
2017/18
Estimated
$000
 Frigate Systems Upgrade (pre-acquisition costs)2012/131,000----

 

Reasons for Change in Appropriation#

The appropriation in 2014/15 reduces by $1.821 million due to lower pre-acquisition project costs funded by the NZDF (Revenue from Other) and the 2013/14 appropriation including allowance for costs of implementing the recommendations of the Performance Improvement Framework review (Revenue from Crown).

2.3 - Departmental Capital Expenditure and Capital Injections#

Ministry of Defence - Capital Expenditure PLA (M22)#

Scope of Appropriation

This appropriation is limited to the purchase or development of assets by and for the use of the Ministry of Defence, as authorised by section 24(1) of the Public Finance Act 1989.

Capital Expenditure

2013/142014/15
Budgeted
$000
Estimated Actual
$000
Budget
$000
Forests/Agricultural---
Land---
Property, Plant and Equipment280280142
Intangibles280280178
Other---

Total Appropriation

560560320

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the purchase and development of assets by and for the use of the Ministry of Defence in its day-to-day operations.

How Performance will be Assessed and End of Year Reporting Requirements

2013/142014/15
Assessment of PerformanceBudgeted
Standard
Estimated Actual
Standard
Budget
Standard
Capital expenditure is within budget.Within budgetWithin budgetWithin budget

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Ministry of Defence in its Annual Report.

Capital Injections and Movements in Departmental Net Assets

Ministry of Defence#

Details of Net Asset Schedule2013/14
Estimated Actual
$000
2014/15
Projected
$000
Explanation of Projected Movements in 2014/15
Opening Balance3,4163,416
Capital Injections--
Capital Withdrawals--
Surplus to be Retained (Deficit Incurred)--
Other Movements--

Closing Balance

3,4163,416

Part 3 - Details of Non-Departmental Appropriations#

3.5 - Non-Departmental Capital Expenditure#

Defence Equipment (M22)

Scope of Appropriation

This appropriation is limited to the purchase, modification or refurbishment of major items of defence equipment for the New Zealand Defence Force.

Capital Expenditure

2013/142014/15
Budgeted
$000
Estimated Actual
$000
Budget
$000
Total Appropriation286,600286,600464,984

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the procurement of major military equipment in a transparent and fair way, and in accordance with government procurement policies.

How Performance will be Assessed and End of Year Reporting Requirements

2013/142014/15
Assessment of PerformanceBudgeted
Standard
Estimated Actual
Standard
Budget
Standard
Performance measures are the same as used for the departmental appropriation Management of Equipment Procurement and are reported under that appropriation.As per departmental appropriationAs per departmental appropriationAs per departmental appropriation

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Ministry of Defence in its Annual Report.

Current and Past Policy Initiatives

Policy InitiativeYear of
First
Impact
2013/14
Budgeted
$000
2014/15
Budget
$000
2015/16
Estimated
$000
2016/17
Estimated
$000
2017/18
Estimated
$000
Protector Remediation: Phase II2011/1214,05019,150---
Strategic Bearer Network2012/135,6346,338---
ANZAC Platform System Upgrade: Phase II2013/146,00012,400---
Maritime Helicopter Capability2013/1450,000120,00040,00012,200-
Medium and Heavy Operational Vehicles2013/1458,20050,700---
Pilot Training Capability2013/1493,94041,2807,120--
Frigate Systems Upgrade2013/1410,000158,000105,000115,00042,522

Reasons for Change in Appropriation

This appropriation increases in 2014/15 due to the timing of capital expenditure for the projects managed by the Ministry.

Part 4 - Details of Multi-Category Expenses and Capital Expenditure#

Multi-Category Expenses and Capital Expenditure#

Policy Advice and Related Outputs (M22)

Overarching Purpose Statement

The overarching purpose of this appropriation is to provide policy advice, other support to Ministers in discharging their policy decision-making and other portfolio responsibilities.

Scope of Appropriation

Departmental Output Expenses
Ministerial Services
This category is limited to the provision of services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.
Policy Advice
This category is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to defence and national security.
Policy Support
This category is limited to the provision of services (other than defence policy) that support the development and procurement of military capability, and the conduct of international defence relations.

Expenses, Revenue and Capital Expenditure

2013/142014/15
Budgeted
$000
Estimated Actual
$000
Budget
$000

Total Appropriation

--5,970

Departmental Output Expenses

Ministerial Services--717
Policy Advice--3,593
Policy Support--1,660

Funding for Departmental Output Expenses

Revenue from the Crown

--5,970
Ministerial Services--717
Policy Advice--3,593
Policy Support--1,660

Revenue from Others

---
Ministerial Services---
Policy Advice---
Policy Support---

Comparators for Restructured Appropriation

2013/142014/15
Vote, Type and Title of Appropriation Budgeted
$000
Estimated Actual
$000
Budget
$000

Policy Advice and Related Outputs MCOA

Ministerial Services726726717
Policy Advice3,6403,6403,593
Policy Support1,6811,6811,660
Total6,0476,0475,970

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the provision of civilian advice on defence policy matters and development of international defence relations.

How Performance will be Assessed for this Appropriation

2013/142014/15
Assessment of Performance Budgeted
Standard
Estimated Actual
Standard
Budget
Standard

Policy Advice and Related Outputs

Total cost per output hourTo be measured at year end

What is Intended to be Achieved with each Category and How Performance will be Assessed

2013/142014/15
Assessment of Performance Budgeted
Standard
Estimated Actual
Standard
Budget
Standard

Policy Advice and Related Outputs

Departmental Output Expenses

Ministerial Services
This category is intended to achieve the successful provision of services to Ministers to enable them to discharge their portfolio (other than policy-decision making) responsibilities.
Quality, as assessed by the percentage of first draft of all correspondence accepted by the Minister.Mean >= 70%To be measured at year end>= 70%
Timeliness, as assessed by the percentage of papers that were submitted by the timeframe set in legislation, or otherwise agreed with the Minister.>= 95%To be measured at year end>= 95%
Policy Advice
This category is intended to achieve the successful provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision making by Ministers on government policy matters relating to defence and national security.
Technical quality of policy advice, as assessed by independent review of a sample of policy papers.>= 70%To be measured at year end>= 70%
Minister's satisfaction with the quality of policy advice, as assessed by survey.>= 70%To be measured at year end>= 70%
Timeliness, as assessed by the percentage of papers that were submitted by the directed deadline.>= 95%To be measured at year end>= 95%
Technical quality robustness, as assessed by the Common Indicator Set tool. >= 70%To be measured at year end>= 70%
Policy Support
This category is intended to achieve the successful provision of services (other than defence policy) that support the development and procurement of military capability, and the conduct of international defence relations.
Minister's satisfaction with the quality of policy support, as assessed by survey.>= 70%To be measured at year end>= 70%
Timeliness, as assessed by the percentage of papers that were submitted by the directed deadline.>= 95%To be measured at year end>= 95%

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Ministry of Defence in its Annual Report.