Vote Finance - Finance and Government Administration Sector - The Estimates of Appropriations 2017/18 - Estimates 2017/18

Overview of the Vote#

The Minister of Finance is responsible for appropriations in Vote Finance for the 2017/18 financial year which cover the following:

• a total of nearly $31 million for the provision of financial operations services and operational advice which support the performance of the State sector

• a total of over $9 million for the administration of Crown borrowing, securities, derivative transactions, investments and guarantees

• a total of nearly $35 million for the provision of advice (including assessing and providing contributions to policy advice led by other agencies) to support decision making by Ministers

• a total of over $14 million for the provision of shared services to other entities and agencies

• a total of nearly $6 million for departmental capital expenditure

• a total of over $3,395 million for the payment of interest and other costs relating to the Crown's debt

• a total of over $595 million for superannuation costs, primarily the Government Superannuation Fund

• a total of nearly $25 million for capital payments to International Financial Institutions and for the un-wind of interest expense on liabilities

• a total of over $5 million for inquiries and research into productivity-related matters by the Productivity Commission

• a total of over $5 million for unclaimed money, meeting costs associated with the Landcorp Protected Land Agreement, managing the Crown's residual liabilities, and provisions for meeting liabilities associated with Geothermal Wells

• a total of nearly $15 million for costs of administering New Zealand House, London

• a total of $47 million for 2017/18 for a loan facility for Tamaki Redevelopment Company in a multi-year appropriation, and

• a total of over $337 million for refinancing of Housing New Zealand Corporation and Housing New Zealand Limited Debt.

The Minister of Finance is also responsible for Crown revenue and receipts in the Vote for the 2017/18 financial year which account for over $3,738 million in non-tax revenue for return on investments, including capital charge, dividends, and interest on securities and deposits.

The Minister supporting Greater Christchurch Regeneration is responsible for annual and multi-year appropriations in Vote Finance which total over $537 million in 2017/2018 for the continuation of Anchor Projects Programme and divestment of Crown-owned land to Otakaro Limited, and the transfer of Anchor Project Assets to Otakaro Limited.

The Minister responsible for HNZC is responsible for the appropriation in Vote Finance for the 2017/18 financial year which covers over $8 million for the Social Housing Reform Programme.

The Minister for State Owned Enterprise is responsible for the appropriation in Vote Finance for the 2017/18 financial year which covers over $4 million for Crown company monitoring, governance, and ownership advice.

The Minister of Science and Innovation is responsible for the appropriation in Vote Finance for the 2017/18 financial year which covers over $200,000 for Crown Research Institutes governance and ownership advice.

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

Details of Appropriations and Capital Injections#

Annual and Permanent Appropriations#

Multi-Year Appropriations#

Total Annual and Permanent Appropriations and Multi-Year Appropriation Forecasts#

Capital Injection Authorisations#

Supporting Information#

Part 1 - Vote as a Whole#

1.1 - New Policy Initiatives

1.2 - Trends in the Vote#

Summary of Financial Activity#

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. In this instance Total Appropriations for the Budgeted and Estimated Actual year may not equal Total Appropriations in the Details of Appropriations and Capital Injections.

Adjustments to the Summary of Financial Activity Table Due to Vote Restructuring#

There have been no restructuring adjustments to prior year information in the Summary of Financial Activity table.

1.3 - Analysis of Significant Trends#

Total Vote: All Appropriations

The movements in appropriations in Vote Finance, as detailed in the Summary of Financial Activity table above, are largely due to movements in capital expenditure, debt servicing costs and other non-departmental expenses.

Significant movements within each appropriation category are shown below.

Departmental Output Expenses

Policy Advice - Finance will increase in 2017/18 by about $2 million. This is largely the result of new funding provided in Budget 2017 of $3.254 million for the two initiatives Creating Economic Opportunity: A Treasury Presence Offshore (Singapore) and the Stockton Acid Mine Drainage Rehabilitation Project.

Shared Support Services to the Department of the Prime Minister and Cabinet (DPMC) increased in 2016/17 following the transfer of Canterbury Earthquake Recovery Authority activities from March 2016 ($3 million), and had previously increased in 2015/16 following transfer of Emergency Management activities from the Department of Internal Affairs from April 2014 ($4.300 million).

2013/14 was also the first full year of operations of the Analysis for Outcomes programme ($1.800 million), and the Gateway and Major Project Monitoring activities ($2 million) that transferred from the State Services Commission (SSC) from 1 December 2013. In addition, 2013/14 includes $10 million associated with the final year of the Government Share Offer programme.

The output expenses for the Government Share Offer programme covered three financial years: $6.600 million in 2011/12, $10.300 million in 2012/13 and $10 million in 2013/14.

Non-departmental Output Expenses

In 2015/16, a new appropriation, Management of Anchor Projects by Otakaro Limited, was established for the provision of operating costs to Otakaro Limited for managing the continuation of Anchor Projects and divestment of Crown-owned land in Christchurch. Funding of nearly $7.500 million was appropriated for 2015/16 and $23 million for 2016/17. Funding is forecast to continue at $23 million each year until 2020/21 when it expires.

Tamaki Regeneration appropriation was transferred into Vote Finance from Vote Building and Housing in 2015/16, with funding of just over $3 million being available for 2016/17.

2013/14 included over $5 million of new funding for Inquiries and Research into Productivity-Related Matters. During 2014/15 this appropriation was restructured to a multi-category appropriation, and as a result the non-departmental output expenses significantly decreased in that year.

Non-Departmental Borrowing Expenses

Debt servicing costs have fluctuated over the period and are expected to continue to do so in the future, as a result of movements in forecast interest rates and the amount of debt outstanding.

Non-Departmental Other Expenses

For 2017/18, non-departmental other expenses are expected to decrease, mainly due to the non-recurrence of a $329 million impairment of the Crown's investment in Southern Response Earthquake Services Limited in 2016/17, which increased from $222 million in 2015/16.

For 2015/16 the most significant changes were the write-off of historical investment in Solid Energy New Zealand Limited of $60.900 million and the impairment of additional investment of $222 million in Southern Response Earthquake Services Limited.

2014/15 included nearly $108 million in respect of the indemnity provided to Solid Energy New Zealand Limited for the reimbursement of the rehabilitation costs associated with all existing mining operations. There was also $684 million incurred for Crown's unfunded liability under the Government Superannuation Scheme and $333 million for the impairment of the investment in Southern Response Earthquake Services Limited.

Significant items during 2013/14 included nearly $614 million for the Crown's unfunded liability under the Government Superannuation Scheme, direct costs associated with the Mixed Ownership Model of nearly $33 million, Loyalty Bonus Scheme related to Public Share Offer of slightly over $22 million, the impairment of Redeemable Preference Shares in Solid Energy of $25 million, and New Zealand Aluminium Smelters - Electricity Agreement Incentive payment of $30 million.

Departmental Capital Expenditure

The Departmental capital expenditure appropriation is forecast to increase in 2017/18 by $1.3 million as a result of increased investment in the Treasury's information capability. In 2015/16 a capital injection reflects the transfer of funding from the SSC for information technology assets for the Auckland Policy Office and from DPMC for Greater Christchurch Group, which transferred funding from the Canterbury Earthquake Recovery Authority from 1 March 2016. Previously the Departmental capital expenditure appropriation increased by over $2 million in 2013/14 for central agencies shared services within the Treasury to support the transition of emergency management functions to DPMC from 1 April 2014. A capital injection was received as assets were transferred from the Department of Internal Affairs and information technology assets supporting the National Crisis Management Centre were replaced.

Non-Departmental Capital Expenditure

This appropriation category comprises purchases of debt and equity by the Crown in various Crown entities, and capital additions to the Crown's physical assets.

Changes in non-departmental capital expenditure are principally owing to a combination of:

• transfer of Housing New Zealand Corporation stock to the Tamaki Redevelopment Company in 2015/16 as part of the Social Housing Reform Programme at $1,631 million

• additional investment in Southern Response Earthquake Services Limited of $222 million in 2015/16 for Christchurch earthquake claims settlement, and

• $142 million of refinancing associated with Housing New Zealand Corporation and Housing New Zealand Limited debt in 2015/16, with this increasing to $275 million and $337 million in 2016/17 and 2017/18 respectively to align with the maturity of Housing New Zealand Corporation debt.

Multi-year appropriations also impact with forecasted expenditure for the Loan Facility for Tamaki Redevelopment Company of $8.500 million in 2015/16, $29 million in 2016/17 and $47 million in 2017/18, and for the Transfer of Anchor Project Assets to Otakaro Limited of $295 million in 2015/16, $35 million in 2016/17 and $260 million in 2017/18.

In 2015/16 there were also investments made to International Financial Institutions of $198.900 million to the International Monetary Fund, and $135.800 million to the Asian Infrastructure Investment Bank.

During 2014/15 there was funding of $333 million provided to support Southern Response Earthquake Services Limited. During 2013/14, $25 million worth of Redeemable Preference Shares were issued to Solid Energy New Zealand Limited.

Multi-Category Expenses and Capital Expenditure

Changes in the Multi-Category expenses and capital expenditure are due to:

• transfer of funding from Vote Canterbury Earthquake Recovery for the operating and capital expenditure in respect of Anchor projects programme and divestment of Crown-owned land of over $65 million in 2015/16, nearly $253 million in 2016/17, and over $254 million in 2017/18, and

• continuation of the Social Housing Reform Programme during 2017/18 of over $8 million, and nearly $17 million for 2016/17.

Crown Revenue

Non-tax Crown Revenue largely comprises capital charge, interest from securities and deposits, and dividends from State-Owned Enterprises, Crown Entities, and partly owned listed companies.

Crown Capital Receipts

Variances in Crown Capital Receipts are largely due to International Monetary Fund capital returns, repayment of loans, and capital withdrawals from Crown companies. In 2015/16, capital receipts were higher as a result of a $445 million repayment of advances from the International Monetary Fund.

Part 2 - Details of Departmental Appropriations#

2.1 - Departmental Output Expenses#

Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA (M31)

Scope of Appropriation

Expenses and Revenue

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the administration of the Crown's financing requirements so as to raise sufficient funds to finance the Crown's cash deficit while minimising the cost to the Crown of such borrowing.

How Performance will be Assessed and End of Year Reporting Requirements

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Current and Past Policy Initiatives

Conditions on Use of Appropriation

Administration of Guarantees and Indemnities Given by the Crown PLA (M31)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve efficient and effective administration of the Crown's Guarantees and Indemnities, including the Wholesale and Retail Deposit Guarantee Schemes.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Conditions on Use of Appropriation#

Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers (M65)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to ensure appropriate financial and social returns, and long-term value is achieved from the State-Owned Enterprises (SOEs), Crown entity companies (CECs) and Crown entities monitored under this appropriation.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Crown Company Monitoring Advice to the Minister of Science and Innovation and the Minister for Economic Development (M84)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to ensure appropriate financial and social returns, and long-term value is achieved from Crown research institutes and Crown entities monitored under this appropriation.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2016/17 is mainly due to the reallocation of overhead costs.

Policy Advice - Finance (M31)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to enable and facilitate Ministerial decision-making that achieves for New Zealand improved economic performance, a high-performing State sector, and a stable and sustainable macroeconomic environment.

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

Methodological Robustness - The higher the robustness score, the stronger the methodological quality of the completed assessment. This is calculated using a standardised formula common to agencies and departments that participate in the policy measurement exercise.

Welfare System - Through its Vote role and role as the external monitor of Work and Income (a division of the Ministry of Social Development), the Treasury will help enable increased cross-agency collaboration to meet the expanded Better Public Services Result 1 target.

Dimensions of Policy Advice#

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The increase in this appropriation for 2017/18 is mainly due to:

• new funding of $854,000 approved in Budget 2017 in relation to the Budget initiative 'Creating Economic Opportunity: A Treasury Presence Offshore (Singapore)' which will see a permanent position established in Singapore, and
• new funding of $2.400 million approved in Budget 2017 in relation to the Budget initiative 'Stockton Acid Mine Drainage Rehabilitation Project' which will involve the Treasury seeking to provide advice on the procurement of a long-term solution to managing the Crown's acid mine drainage liability at Stockton mine.

These increases were partially offset by:

• a decrease of over $300,000 with the reduction in activity in the Treasury's Joint Tax Policy Programme with Inland Revenue
• a decrease of nearly $300,000 due to a reduction in resources required to carry out the Treasury's Social Inclusion initiative
• a decrease of nearly $250,000 due to the completion and release in 2016/17 of Treasury's Statement on New Zealand's Long-Term Fiscal Position (the next statement is not due to be released until 2018), and
• a decrease of nearly $200,000 with the winding down of the Government's reporting system review.

Provision of Financial Operations Services and Operational Advice (M31)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to improve economic performance and financial stewardship across the State Sector and export and financial markets, through provision of relevant and timely operational support, services and advice.

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

Management of Liabilities - This output class covers the management and resolution of contingent or actual liabilities associated with various Crown commitments and assets - for instance, gas and geothermal reserves, Treaty settlements and New Zealand House. In some cases, the Treasury is a provider of second-opinion advice rather than a lead agency on these matters.

Cost Benefit Analysis - This analysis should cover: problem definition, intervention logic, options analysis, evaluation of the initiative's contribution to the agency's/ sector's outcomes and result areas, how the new initiative will be implemented and evaluated, and options for scaling the initiative.

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Current and Past Policy Initiatives#

Shared Support Services (M31)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve quality, efficient support services for other agencies.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Current and Past Policy Initiatives#

2.3 - Departmental Capital Expenditure and Capital Injections#

The Treasury - Capital Expenditure PLA (M31)#

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the renewal and replacement of life-expired assets in support of the delivery of Treasury services.

How Performance will be Assessed and End of Year Reporting Requirements

Expenditure is in accordance with the Treasury capital asset management plan.

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Reasons for Change in Appropriation

The increase in this appropriation for 2017/18 is due to commencement of the Wellington Accommodation Project (WAP) refurbishment of the Treasury's new premises (from 2019), 1-3 the Terrace.

Capital Injections and Movements in Departmental Net Assets

The Treasury

Part 3 - Details of Non-Departmental Appropriations#

3.1 - Non-Departmental Output Expenses#

Management of Anchor Projects by Otakaro Limited (M85)

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve continuation of Christchurch earthquake recovery of the Anchor Projects Programme and divestment of Crown-owned land in Christchurch.

How Performance will be Assessed and End of Year Reporting Requirements

End of Year Performance Reporting

Performance information for this appropriation will be reported by Otakaro Limited in its 2017/18 Annual Report.

Current and Past Policy Initiatives

Management of the Crown's Obligations for Geothermal Wells (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve management and maintenance relating to geothermal wells and associated sites and structures for which the Crown accepts responsibility.

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

An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental output expense is less than $5 million.

Service Providers#

Services will be provided by Aurecon Limited, MB Century and other providers if and when required.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to a one-off expense transfer of unused funding from 2015/16 to 2016/17 for remedial work on redundant geothermal wells.

Management of the New Zealand Superannuation Fund (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the management and administration of the Guardians of New Zealand Superannuation Fund.

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

An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental output expense is less than $5 million.

Service Providers#

Services will be provided by Guardians of New Zealand Superannuation Fund.

3.3 - Non-Departmental Borrowing Expenses#

Debt Servicing PLA (M31)#

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the payment of borrowing expenses for the Crown's New Zealand-dollar and foreign-currency debt, authorised by section 60(1)(b) of the PFA.

End of Year Performance Reporting

This borrowing expense appropriation is exempt from end of year performance reporting under section 15A(4)(b) of the PFA.

Reasons for Change in Appropriation

The decrease in this appropriation for 2017/18 is due to movements in forecast interest rates and the amount of debt outstanding.

3.4 - Non-Departmental Other Expenses#

Crown Residual Liabilities (M31)#

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the administration of residual obligations arising from the Crown's sale and purchase agreements with SOEs and Crown entities and from the sale of Crown investments, and for the settlement of claims against the Crown arising from exposure to asbestos.

How Performance will be Assessed and End of Year Reporting Requirements

An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental other expense is less than $5 million.

Current and Past Policy Initiatives

Reasons for Change in Appropriation

The decrease in this appropriation for 2017/18 is due to a transfer from the Management of Landcorp Protected Land Agreement multi-category appropriation to fund additional costs in 2016/17 that were incurred under this appropriation since the partial sale of the Crown's energy companies. These costs are not expected to be repeated in 2017/18.

Geothermal Wells Fund (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve meeting the costs of one-off unforeseen events relating to those geothermal wells for which the Crown accepts responsibility.

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

An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental other expense is less than $5 million.

Reasons for Change in Appropriation#

The increase in this appropriation for 2017/18 is due to an expected need to commission some remediation work in 2017/18. There was no requirement for remediation in 2016/17, with the funding from this appropriation in 2016/17 being transferred to fund a shortfall in the Management of Crown's Agreement with Taitokerau Forests Limited multi-category appropriation, Impairment of Loans.

Government Superannuation Appeals Board (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the on-going operations of the Government Superannuation Appeals Board.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for payments of board fees, disbursements and allowances. Performance information relating to the administration of the payment is provided under the Provision of Financial Operations Services and Operational Advice appropriation.

Government Superannuation Fund Authority - Crown's Share of Expenses PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the management and administration of the Government Superannuation Fund and the schemes, authorised by s15E and s95 of the Government Superannuation Act 1956, through payment of the Crown's share of the expenses of the Government Superannuation Fund Authority.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional performance information is unlikely to be informative as this appropriation is solely for payments of the Crown's share of expenses relating to the management and administration of the Government Superannuation Fund and the schemes authorised by s15E and s95 of the Government Superannuation Fund Act 1956.

Government Superannuation Fund Unfunded Liability PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to recognise the Crown's liability to the Government Superannuation Fund and the specified superannuation contribution withholding tax on employer contributions by the Crown as authorised by s95AA of the Government Superannuation Fund Act 1956 in accordance with generally accepted accounting practice.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for technical accounting treatment of the Crown's liability.

National Provident Fund Schemes - Liability Under Crown Guarantee PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the recognition of the net increase (excluding actuarial gains and losses) in the Crown's liability for benefits payable to members of National Provident Fund schemes under the Crown guarantee in s60 of the National Provident Fund Restructuring Act 1990. This appropriation is authorised by s66 of the National Provident Fund Restructuring Act 1990.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for costs payable to the National Provident Fund Scheme. Further information about the performance of the Scheme can be found in the National Provident Fund's Annual Report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 reflects a revised forecast for the expected interest cost movements in relation to the National Provident Fund liability.

Unclaimed Money PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the repayment of unclaimed money authorised by s74(5) of the PFA.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the repayment of unclaimed money to claimants and repayments are made in accordance with s74(5) of the PFA.

Unclaimed Trust Money PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the repayment of money authorised by s70(2) of the PFA.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the repayment of unclaimed money to claimants and repayments are made in accordance with s70(2) of the PFA.

Unwind of Discount Rate Used in the Present Value Calculation of Payment for Shares in International Financial Institutions PLA (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the recognition of interest unwind for Crown's liability to International Financial Institutions.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the interest unwind in respect of Crown's liability with International Financial Institutions.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to changes in forecast interest rates and cash flows in relation to the Crown's investments in International Financial Institutions.

Unwind of Discount Rate Used in the Present Value Calculation of Payment Under Crown Deed of Support with Southern Response Earthquake Services Ltd (M31)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the recognition of the expense incurred in unwinding the discount rate used in the present value calculation of the liability as the liability nears settlement.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for technical accounting treatment under the Crown Deed of Support with Southern Response Earthquake Services Limited.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to a revised forecast for the expected unwind of the discount rate in relation to the Crown Support Deed and the Uncalled Capital facility as the liability nears settlement.

3.5 - Non-Departmental Capital Expenditure#

International Financial Institutions PLA (M31)#

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to provide for the capital expenditure by New Zealand as a member of International Financial Institutions, as authorised by s5 of the International Finance Agreements Act 1961.

How Performance will be Assessed and End of Year Reporting Requirements

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for payments made by New Zealand as a member of International Financial Institutions. Performance information relating to the administration of the payment is provided under the Policy Advice - Finance appropriation.

Reasons for Change in Appropriation

The increase in this appropriation for 2017/18 is due to changes in the timing and quantum of contributions to the International Monetary Fund and the Asian Infrastructure Investment Bank.

Loan Facility for Tamaki Redevelopment Company (M31)#

Scope of Appropriation and Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to enable Tamaki Redevelopment Company Limited to accelerate regeneration action.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by Tamaki Redevelopment Company Limited in its 2017/18 Annual Report.

Current and Past Policy Initiatives#

Refinancing of Housing New Zealand Corporation and Housing New Zealand Limited Debt (M31)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to enable Housing New Zealand Corporation and Housing New Zealand Limited to refinance their loans.

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Minister of Finance in a report appended to the Treasury's Annual Report for 2017/18.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The increase in this appropriation for 2017/18 is due to the alignment of the amount of the appropriation with Housing New Zealand Corporation and Housing New Zealand Limited debt refinancing.

Transfer of Anchor Project Assets to Otakaro Limited (M85)#

Scope of Appropriation and Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve a transfer of Christchurch anchor project assets to Otakaro Limited.

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

An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely to give effect to the technical transfer of Christchurch anchor project assets to Otakaro Limited.

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

Multi-Category Expenses and Capital Expenditure#

Greater Christchurch Anchor Projects (M85)

Overarching Purpose Statement

Scope of Appropriation

Expenses, Revenue and Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the management of Anchor Projects and divestment of Crown owned land in Christchurch.

How Performance will be Assessed for this Appropriation

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

Service Providers for the Multi-Category Appropriation

Delivery of Greater Christchurch Anchor Projects will be undertaken by Otakaro Limited.

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Treasury in a report appended to its 2017/18 Annual Report.

Current and Past Policy Initiatives

Note 1 - Estimated expenditure for 2018/19 to 2020/21 is withheld as publication is likely to unreasonably prejudice the commercial position of the Crown.

Inquiries and Research into Productivity-Related Matters (M31)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

The appropriation is intended to achieve:

• inquiries in accordance with the New Zealand Productivity Commission Act 2010, and
• research in accordance with the New Zealand Productivity Commission Act 2010.

How Performance will be Assessed for this Appropriation#

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

Service Providers for the Multi-Category Appropriation#

Services will be delivered by New Zealand Productivity Commission.

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in a report appended to its 2017/18 Annual Report.

Management of Landcorp Protected Land Agreement (M31)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the Crown's responsibilities under the Landcorp Protected Land Agreement.

How Performance will be Assessed for this Appropriation#

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

Current and Past Policy Initiatives#

 #

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in a report appended to its 2017/18 Annual Report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to a non-recurring expense transfer from 2015/16 to 2016/17 of unused funding relating to the costs of managing protected land.

Management of New Zealand House, London (M31)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to ensure that New Zealand House, London is well managed.

How Performance will be Assessed for this Appropriation#

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

Service Providers#

Services are provided through Jones Lang LaSalle International Property Consultants, London.

 #

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in a report appended to its 2017/18 Annual Report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to a one-off expense transfer from 2015/16 to 2016/17 to provide for reactive maintenance on the property that is not expected to be repeated in 2017/18.

Social Housing Reform (M90)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the development of a variety of social housing in New Zealand and grow the community housing sector by making the Housing New Zealand Corporation stock available to social providers.

How Performance will be Assessed for this Appropriation#

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

End of Year Performance Reporting#

Performance information for this appropriation will be reported by the Treasury in its 2017/18 Annual Report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2017/18 is due to forecast reduced activity for this time-limited policy initiative.