Vote Transport - Economic Development and Infrastructure - Estimates 2014/2015

Summary of the Vote#

Overview#

Vote Transport encompasses the funding of the road, rail, aviation and maritime transport modes. The major entities involved are the Ministry of Transport, the New Zealand Transport Agency and KiwiRail, as well as the other transport Crown entities, the Civil Aviation Authority (incorporating the Aviation Security Service), Maritime New Zealand and the Transport Accident Investigation Commission.

Road

The largest element of the Vote is the funding for roading ($3,873 million or 86% of the total Vote).

This is primarily the funding for the National Land Transport Programme which is funded from road tax revenue collected by the Crown ($2,850 million or 63% of the Vote).

$1,012 million of the balance (22%) relates to loans from the Crown:

• $750 million for cash flow management. This appropriation does not take account of any repayments made and the facility may not exceed $250 million at any one time
• $107 million to advance the construction of the Tauranga Eastern Link
• $100 million to rebuild earthquake damaged roads in Christchurch
• $55 million for projects in the Auckland Transport Package.

Rail

Funding for Rail makes up 11% of the Vote - $511 million, mainly:

• $198 million for the KiwiRail Turnaround Plan, the aim of which is put the freight business on a commercially viable footing
• $192 million for a loan to the Auckland Council to assist with the funding of the Electric Multiple Unit package
• $90 million for a grant to the Auckland Council to assist with the funding of the Electric Multiple Unit package
• $16 million for metro rail projects in Wellington.

Crown Entity and Other Funding

The balance of the Vote ($135 million) is mainly split between:

• $33 million for the Ministry of Transport as departmental funding
• $25 million for Crown entities for outputs. The transport Crown entities receive most of their funding from third party fees and charges
• $26 million for SuperGold card public transport concessions
• $19 million for weather forecasting services from the Meteorological Service of New Zealand
• $18 million for road user charges and fuel excise duty activities which are funded from fees and road tax revenue.

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

Estimates of Appropriations#

Details of Appropriations and Capital Injections#

Annual and Permanent Appropriations

Multi-Year Appropriations

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.

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

The prior year information in the Summary of Financial Activity table has been restated to reflect the current Vote structure. Appropriations that were multi-class output appropriations in 2013/14 are now multi-category appropriations.

1.3 - Analysis of Significant Trends#

Analysis of Significant Trends#

Significant trends in Vote Transport are discussed briefly below. In all of the tables, the 2009/10 to 2012/13 figures are actual and the other years are forecasts.

Tax Revenue

Road tax revenue is hypothecated by legislation to the National Land Transport Fund, the majority of which pays for the national roading network, as detailed in the National Land Transport Programme (NLTP). In 2014/15, the Crown is forecast to collect $3,165 million of road tax revenue.

There are three types of road tax revenue:

• Fuel excise duty paid on fuel by the importer.
• Road user charges paid by owners of diesel vehicles.
• Motor vehicle registration fees paid by owners of most vehicles.

The first is collected by the New Zealand Customs Service and the others by the New Zealand Transport Agency.

The majority of the revenue is spent within Vote Transport with some in Vote Police for Road Policing activities ($297 million in 2014/15). Road tax revenue is forecast at least twice a year and the funding to the NLTP is adjusted upwards or downwards in line with revenue.

Revenue Trends

The economic downturn continues to affect the revenue stream. Road user charges and fuel excise duty rates were increased in 2009, 2010, 2012 and 2013. The forecasts for outyears include agreed increases to petrol excise duty of 3 cents per litre on 1 July 2014 and 1 July 2015, and the equivalent for road user charges. Forecasts for 2016/17 and outyears assume increases equivalent to the Consumer Price Index on 1 July each year.

The road tax revenue is hypothecated to the National Land Transport Fund and therefore can be approved pursuant to a permanent legislative authority. For transparency, the expenditure proposed is shown in the Estimates although no appropriation is required. This disclosure provides a transparent view of the government's books as the road tax revenue is matched by equal expenditure. If the expenditure was not shown, the revenue would create an apparent surplus.

Appropriations by Purpose within Vote Transport

The figures shown by type of appropriation in the Summary of Financial Activity table have been reanalysed by purpose, to allow for a more meaningful and straightforward explanation of the trends.

The funding by each purpose is explained in more detail below.

National Land Transport Programme (NLTP)

The key document which explains the current policy on land transport funding is the Government Policy Statement on Land Transport Funding. The current document relates to years 2012/13 to 2021/22 and came into force on 1 July 2012. This is a statutory document and a requirement of the Land Transport Management Act 2003. The Policy Statement sets out the Government's priorities for land transport, and sets ranges of expenditure on defined activities. From this, the New Zealand Transport Agency in conjunction with regional local bodies develops the three year NLTP to action these policy intentions. The current NLTP is for the years 2012/13 to 2014/15.

There are two permanent legislative authority appropriations (PLAs) for the NLTP - one operating and one capital in nature. The other sections of this document provide more detail on expenditure by the different activity classes.

In addition to the permanent legislative authority funding, there are some Crown appropriations for specific purposes.

Permanent Legislative Authority Funding

The New Zealand Transport Agency balances the funding available between the operating and capital appropriations to deliver the NLTP. The Agency uses the capital appropriation to fund the delivery of new State highways, which includes the Roads of National Significance programme. For transparency, the Agency manages the funding by allocating sufficient funding to the operating appropriation to deliver the activities planned. Any shortfall is reflected in the capital appropriation and is managed using the loan facilities detailed below.

Crown Appropriations - Loans for the Management of a Three Year NLTP within the Annual Government Budget Cycle

The NLTP is a three-year programme, with the New Zealand Transport Agency Board required to approve funding for activity over multiple years. Variations in project timing, cost overruns and fluctuations in revenue may result in expenditure in a particular year exceeding the available funds, despite being within the expected range over the three years. Such negative cash flow variations may require adjustments to the land transport programme in the short to medium term.

This has been addressed by approving a borrowing facility to manage short-term cash flow variations between hypothecated revenue inflows and expenditure outflows. The facility allows the New Zealand Transport Agency greater flexibility and efficiency in managing the timing of any required adjustments to the programme. It has two components:

• up to $150 million, for the purpose of managing regular seasonal cash flow cycles (to be repaid during the off-season, when revenue inflows exceed expenditure), and
• up to $100 million, for the purpose of managing unexpected and unavoidable cash flow variations.

The New Zealand Transport Agency is in charge of managing the facility and it draws down the loan and makes repayments as revenue levels permit. The constraint is that the loan balance may not exceed $250 million at any time. In calculating the size of the appropriation, only draw downs can be taken into account and so the appropriation is $750 million as shown above, but this is not a reflection of the net funding being provided. The Agency reports quarterly to the Minister of Transport on the ongoing management of the loan against its terms and conditions. The latter have been complied with.

During 2012/13, an additional facility of $100 million was provided - this was transferred to 2013/14 as it had not been drawn down.

Loans for Specific Projects

The Crown has provided three loan facilities for projects to the New Zealand Transport Agency.

$137 million was available for the construction of the Tauranga Eastern Link. During 2013/14, the Agency reduced the appropriation to $107 million, which is available in 2014/15. The loan will be repaid from tolling revenue.

The second loan is for the reinstatement of Canterbury's roads following the earthquakes. The New Zealand Transport Agency has been working with other agencies to assess what expenditure will be required. It has committed $50 million per annum from the National Land Transport Fund. More than this might put pressure on other projects to be delivered by the National Land Transport Programme.

The Crown appropriated $102 million of operating funding to Vote Transport in 2011/12 to 2013/14 for the reinstatement. During 2013/14, a cost sharing agreement for roading was agreed with the Christchurch City Council and the Crown agreed to provide the New Zealand Transport Agency with a loan of $183.420 million over 2013/14 to 2015/16. This will be repaid using the annual commitment of $50 million from the National Land Transport Fund.

The third loan is to accelerate projects in the Auckland transport package. $375 million is available over five years, of this $55 million is available in 2014/15.

Other Roading Funding from the Crown

Road tax is intended to be the primary source of funding for the NLTP but the Crown can appropriate additional funding if it wishes. The appropriation in the table above for 2009/10 mainly reflects the economic stimulus package which ended in 2010/11.

The other funding for roading in 2013/14 and 2014/15 is for specific projects - the roading around the National War Memorial Park in Wellington and improvements to the passing opportunities between Napier and Gisborne on State Highway 2.

Rail Funding

Capital - Turnaround Plan

This Plan is a 10 year plan with the aim of making the KiwiRail freight business a sustainable business that is able to fund its ongoing operating and capital expenditure solely from customer revenue.

The Crown has appropriated $844 million in capital to the Plan over 2010/11 to 2013/14. It has now appropriated an additional $198 million for 2014/15. The funding is dependent on the approval of business cases and demonstrated progress towards objectives.

Capital - Loans and Equity

This balance mainly reflects existing loans being been rolled over and so requiring an appropriation. During 2012/13, $322 million of existing loans were converted to equity which explains the high balance in that year. This conversion will reduce the need for loan rollovers in the future. In 2014/15 there is $11 million for the rollover of a loan that is due to mature.

Operating and Capital for Project Funding

There have been a number of projects over time for the metro rail network in Wellington. At 1 July 2014, the projects are an appropriation of $88 million over the eight years to 2018/19 to upgrade the Wellington metro network and $4 million per annum for public policy and railway safety work.

Rail Related Funding to Other Parties

Currently the only rail funding to other parties is to Auckland Council for the Auckland Electric Multiple Unit package. From 2011/12, there has been a loan of $500 million appropriated until 2014/15 ($192 million). There is also a grant for this project of $90 million in 2014/15.

Funding to Crown Entities

Most transport Crown entity activity is funded from the NLTP or fees and charges and so the Crown funding is relatively small. The capital funding from 2013/14 of $10 million is to Maritime NZ, to replace a ground station for the search and rescue system ($7 million) and develop an information technology system ($3 million).

Other

The 'Other' category is funding paid to third parties, fee funded work and one off projects. Key elements in 2014/15 are:

• SuperGold card public transport concessions ($26 million)
• purchase of weather forecasting services from the Meteorological Service of New Zealand ($19 million)
• road user charges and fuel excise duty activities that are funded from fees and road tax revenue ($18 million).

The decrease from 2011/12 is mainly due to the winding down of the response to the MV Rena grounding and the transfer of responsibility for motor vehicle registration to the New Zealand Transport Agency.

Departmental Output Expenses

The Ministry had been responsible for road user charges administration and it contracted this activity to the New Zealand Transport Agency. From 2012/13, the activity was funded by way of a non-departmental output expense paid directly to the New Zealand Transport Agency.

Otherwise the departmental funding remains relatively stable:

• in 2011/12 the Ministry transferred $1.250 million to Maritime New Zealand to assist with its planned activities while also managing the response to the grounding of the MV Rena
• from 2012/13, departmental funding decreased by $900,000 as a result of the 3% efficiency saving required by the government.

Non-Tax Revenue

The funding of motor vehicle register and road user charges administration activity has been undergoing change and this is reflected in the decrease in line 1) of the table above. From 2012/13, the administration fees for motor vehicle register activity became third party revenue of the New Zealand Transport Agency and the related non-departmental output expense appropriation was disestablished.

Tolling revenue comes from the Northern Gateway road that is currently the only road in the country being tolled by the Crown. Tolling began during 2008/09.

During 2012/13, the New Zealand Government received $27.600 million in settlement from the owners of the MV Rena. This money was held in an interest bearing trust account until the balance including interest was transferred to the Crown during 2013/14.

Other revenue was mainly related to the motor vehicle register and so has decreased due to the changes noted above. Now it is now solely fines, which are usually below $1 million per annum.

1.4 - Reconciliation of Changes in Appropriation Structure#

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#

Fuel Excise Duty Refund Administration (M72)

Scope of Appropriation

Expenses and Revenue

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve accurate and timely refunds of fuel excise duty to eligible applicants.

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 Ministry of Transport in its annual report.

Reasons for Change in Appropriation

The appropriation has reduced due to higher than usual costs in 2013/14.

Milford Sound / Piopiotahi Aerodrome Operation and Administration (M72)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the safe and efficient operation of the Milford Sound/Piopiotahi aerodrome.

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 Ministry of Transport in its annual report.

Reasons for Change in Appropriation#

The appropriation was higher in 2013/14 due to higher revenue from landing fees and also costs that had to be met.

Search and Rescue Activity Coordination PLA (M72)#

Scope of Appropriation#

Expenses and Revenue#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the delivery of effective, well coordinated Search and Rescue capability.

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 Ministry of Transport in its annual report.

2.3 - Departmental Capital Expenditure and Capital Injections#

Ministry of Transport - Capital Expenditure PLA (M72)#

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the renewal of assets in support of the delivery of the Ministry of Transport's services.

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 Ministry of Transport in its annual report.

Capital Injections and Movements in Departmental Net Assets

Ministry of Transport

Part 3 - Details of Non-Departmental Appropriations#

3.1 - Non-Departmental Output Expenses#

Accident or Incident Investigation and Reporting (M72)

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the conduct and completion of independent inquiries into selected aviation, rail and marine safety occurrences with the intent of helping to prevent recurrences.

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 Transport Accident Investigation Commission in its annual report.

Construction of Passing Opportunities on State Highway 2 between Napier and Gisborne (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to fund the completion of passing opportunities on State Highway 2 between Napier and Gisborne.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2014/15 is because the project is scheduled to be completed in 2014/15.

Crash Analysis (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to provide information to achieve targeted road safety improvement interventions.

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 New Zealand Transport Agency in its annual report.

Licensing Activities (M72)#

Scope of Appropriation#

Expenses#

Components of the Appropriation#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to ensure that specific elements of the licensing system (Older driver licence holder subsidy; drug and alcohol assessment costs; and driver licence stop orders) are effectively and efficiently managed.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2014/15 is because the implementation of the driver licence stop order regime is complete and so the funding is now for the administration of the regime only.

Maritime Port Security (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve preparedness to provide a maritime security response role to a high level threat situation affecting cruise ships or their passengers.

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 Civil Aviation Authority in its annual report.

Ministerial Servicing by the New Zealand Transport Agency (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the effective delivery of support to executive government and parliamentary processes.

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 New Zealand Transport Agency in its annual report.

National Land Transport Programme PLA (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to provide support to investment from the National Land Transport Fund in the maintenance and improvement of land transport networks and services, including co-investment with local authorities in local roads and public transport.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The appropriation represents the operating expenditure of the National Land Transport Programme and its size varies each year depending on the activities in the Programme and the road tax revenue available.

The Government Policy Statement on Land Transport Funding identifies ranges of expenditure that the government wishes to commit to different roading activities. The New Zealand Transport Agency in conjunction with regional bodies then develops the National Land Transport Programme, detailing how the funding will be spent and what it will deliver within the ranges. The Government Policy Statement and the National Land Transport Programme are three year documents. The current documents took effect from 1 July 2012.

The current indicative expenditure for 2013/14 and 2014/15 is shown below. Expenditure may vary year on year for activities depending on the particular work being undertaken. More detail is available from the New Zealand Transport Agency's website.

Conditions on Use of Appropriation#

Road User Charges Collection (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the accurate collection of road user charges through the provision of licenses for diesel vehicles to support the National Land Transport Fund.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The change is due to variable funding for the Road User Charges Trade Plates project.

Road User Charges Investigation and Enforcement (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the accurate collection of road user charges information and, through education and enforcement, intends to achieve low levels of road user charges evasion and timely payment by users of road user charges.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

An expense transfer from a previous year means that the 2013/14 appropriation was higher than usual. The figure for 2014/15 is a more usual amount.

Road User Charges Refunds (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve accurate and timely refunds of Road User Charges to eligible applicants.

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 New Zealand Transport Agency in its annual report.

Search and Rescue Activities (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve a prompt and well-coordinated search and rescue response, across sea, air and land environments that saves lives and provides assurance for all people in New Zealand's international area of responsibility.

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 Maritime New Zealand in its annual report.

Search and Rescue and Recreational Boating Safety Activities PLA (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve a sustained reduction in the identified systemic risks within the New Zealand Search and Rescue system to reduce the number of preventable Search and Rescue related fatalities in New Zealand.

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

End of Year Performance Reporting#

Performance information for this appropriation in respect of the funding provided to Maritime New Zealand will be reported by Maritime New Zealand in its annual report.

Performance information for the balance of the appropriation will be reported by the Minister in a report appended to the Ministry of Transport's annual report.

Service Providers#

Reasons for Change in Appropriation#

The increase in 2014/15 is additional funding under section 9(1) of the Land Transport Management Act 2003 to pay for additional services.

SuperGold Card - Administration of the Public Transport Concessions Scheme (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve accurate and timely administration of the SuperGold Card scheme.

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 New Zealand Transport Agency in its annual report.

Weather Forecasts and Warnings (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the procurement of weather services to minimise risk to life and property through public weather forecasts and emergency support.

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 in a report appended to the Ministry of Transport's annual report.

Service Providers#

The Meteorological Service of New Zealand is the service provider for this appropriation.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

An increase to the 2013/14 appropriation means the amount for that year was higher than usual.

3.4 - Non-Departmental Other Expenses#

Bad Debt Provision - Motor Vehicle Registration/Licences and Road User Charges (M72)#

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation provides for incurring the expense involved in covering bad debt from non-payment of motor vehicle registrations and road user charges.

End of Year Performance Reporting

An exemption was granted under s.15D(2)(b)(iii) of the PFA because this is a non-departmental other expense appropriation that is less than $5 million.

Membership of International Organisations (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve involvement in international communities (International Maritime Organisation, International Civil Aviation Organisation, World Meteorological Organisation) by New Zealand bodies.

End of Year Performance Reporting#

An exemption was granted under s.15D(2)(b)(iii) of the PFA because this is a non-departmental other expense appropriation that is less than $5 million.

Service Providers#

Reasons for Change in Appropriation#

Costs in 2013/14 were lower than expected. The figure for 2014/15 is a more usual amount.

Rail - Auckland Metro Rail Electric Multiple Unit Package (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to facilitate construction and purchase of 57 three-car sets of electric multiple units, a depot and related infrastructure.

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 in a report appended to the Ministry of Transport's annual report.

Service Providers#

Auckland Council is the service provider for this appropriation.

Reasons for Change in Appropriation#

When funding was approved it was agreed that the grant funding for the project would not be available until after the $500 million loan was drawn, which is now forecast to happen in 2014/15.

Rail - Public Policy Projects (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve public policy rail initiatives that do not always have a financial benefit, but have positive effects on the community.

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 KiwiRail in its annual report.

Rail - Railway Safety (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve improvements in community safety around railway lines and stations.

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 KiwiRail in its annual report.

SuperGold Card - public transport concessions for cardholders (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve greater access and mobility opportunities to SuperGold cardholders through the off-peak public transport concession.

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 New Zealand Transport Agency in its annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The increase in this appropriation for 2014/15 is due to the variable funding granted in Budget 2013.

Tauranga Maritime Incident Response (M72)#

Scope of Appropriation#

Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve effective oversight of MV Rena response activities.

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 Maritime New Zealand in its annual report.

Reasons for Change in Appropriation#

The change in this appropriation for 2014/15 is due to the matching of funding to the projected expenditure.

3.5 - Non-Departmental Capital Expenditure#

Auckland Transport Package Loan (M72)#

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the planning and delivery of the acceleration of projects in the Auckland Transport Package.

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 New Zealand Transport Agency in its annual report.

Current and Past Policy Initiatives

Reasons for Change in Appropriation

This appropriation provides a loan facility to accelerate projects in the Auckland Transport package. Funding varies between years to match projected expenditure.

Joint Venture Airports - Crown Contribution (M72)#

Scope of Appropriation and Expenses#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve maintenance of the Crown's interest in joint venture airports, making air travel available in centres that would otherwise not have airports.

End of Year Performance Reporting#

An exemption was granted under s.15D(2)(b)(iii) of the Public Finance Act 1989 because this is a non-departmental capital expense appropriation that is less than $15 million.

Current and Past Policy Initiatives#

Maritime New Zealand (M72)#

Scope of Appropriation#

Capital Expenditure#

Components of the Appropriation#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to ensure continued effective functioning of a distress beacon system in New Zealand and its international area of responsibility, and the provision of a new Information Technology system to support Maritime Operator Safety System and Seafarer Certification Rules.

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 Maritime New Zealand in its annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The change in this appropriation for 2014/15 is due to the matching of funding to the projected expenditure.

National Land Transport Programme - New Infrastructure for and Renewal of State Highways PLA (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve a resilient and secure transport network while helping to reduce deaths and serious injuries from road crashes, by ensuring the established state highway network asset condition is sustained by an ongoing capital investment programme.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The appropriation has increased in line with the forecast road tax revenue available and the proposed expenditure on the different elements of the National Land Transport Programme.

The Government Policy Statement on Land Transport Funding 2012/13 to 2021/22 contains a range of expenditure of $950 million to $1,300 million for this activity class in 2014/15. The New Zealand Transport Agency will make use of the loans available to it for cash flow management to cover the shortfall.

National War Memorial Park: Buckle Street Undergrounding Project (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the completion of the National War Memorial Park: Buckle Street Undergrounding Project.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The decrease in this appropriation for 2014/15 is due to the project coming to an end during 2014/15.

NLTF Borrowing Facility for Short-Term Advances (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to enable short-term cash flow management for the National Land Transport Fund.

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 New Zealand Transport Agency in its annual report.

Rail - KiwiRail Turnaround Plan Funding (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve investment in KiwiRail to put its freight business on a commercially viable footing.

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 KiwiRail in its annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The KiwiRail Turnaround Plan is a ten year plan to put the rail freight business on a commercially viable footing. $844 million has been appropriated over 2010/11 to 2013/14 and this funding is a further investment in the Turnaround Plan.

Conditions on Use of Appropriation#

Rail - Loan for Auckland Metro Rail Electric Multiple Unit Package (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to facilitate construction and purchase of 57 three-car sets of electric multiple units, a depot and related infrastructure.

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 in a report appended to the Ministry of Transport's annual report.

Reasons for Change in Appropriation#

The amount of the appropriation varies from year to year to match expected draw downs of the loan.

Rail - New Zealand Railways Corporation Loans (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to maintain existing capital funding arrangements for KiwiRail.

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 KiwiRail in its annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The increase in this appropriation for 2014/15 is due to a one-off rollover of a maturing loan.

Rail - Wellington Metro Rail Network Upgrade (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve significant improvements to the Wellington Metro network, to improve and maintain the reliability of commuter services.

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 KiwiRail in its annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The decrease in this appropriation for 2014/15 is due to funding varying each year depending on planned activities. Funding has been rephased since the appropriation's creation in 2011/12 and so no longer agrees to the figures shown above in the Initiatives table.

Roading - Reinstatement of Earthquake Damaged Roads in Christchurch - Loan (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to support the reinstatement of local roads in Canterbury.

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 New Zealand Transport Agency in its annual report

Reasons for Change in Appropriation#

The change in this appropriation for 2014/15 is due to the matching of funding to the projected expenditure.

Tauranga Eastern Link Loan (M72)#

Scope of Appropriation#

Capital Expenditure#

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve the earlier construction of the Tauranga Eastern Link Road.

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 New Zealand Transport Agency in its annual report.

Reasons for Change in Appropriation#

The change in this appropriation for 2014/15 is due to the matching of funding to the projected expenditure.

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

Multi-Category Expenses and Capital Expenditure#

Policy Advice and Related Outputs (M72)

Overarching Purpose Statement

Scope of Appropriation

Expenses, Revenue and Capital Expenditure

Comparators for Restructured Appropriation

The previous multi-class output appropriation Policy Advice and Related Outputs MCOA has been converted to a multi-category appropriation.

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve a transport system that maximises economic and social benefits for New Zealand, and minimises harm.

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 Ministry of Transport in its annual report.

Reasons for Change in Appropriation

The decrease in this appropriation is mainly because:

• the work on Clifford Bay was completed in 2013/14. The 2013/14 funding includes $415,000 carried forward to cover these costs
• there was a carry forward to 2013/14 of $600,000 which means the 2013/14 figure is higher than 2014/15 by this amount.

Policy Advice and Related Outputs - Civil Aviation (M72)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

Comparators for Restructured Appropriation#

The previous multi-class output appropriation Policy Advice and Related Outputs - Civil Aviation MCOA has been converted to a multi-category appropriation.

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve a safe and secure airspace environment through the implementation and monitoring of rules and regulations and the management of risk for all aviation activities.

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 Civil Aviation Authority (CAA) in its annual report, and by the Ministry of Transport (as appropriation administrator) in the CAA annual report.

Policy Advice and Related Outputs - Maritime (M72)#

Overarching Purpose Statement#

Scope of Appropriation#

Expenses, Revenue and Capital Expenditure#

Comparators for Restructured Appropriation#

The previous multi-class output appropriation Policy Advice and Related Outputs - Maritime MCOA has been converted to a multi-category appropriation.

What is Intended to be Achieved with this Appropriation#

This appropriation is intended to achieve robust regulatory advice, risk-focused compliance practices and well-prepared marine pollution response capability.

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 Maritime New Zealand (MNZ) in its annual report, and by the Ministry of Transport (as appropriation administrator) in the MNZ annual report.

Current and Past Policy Initiatives#

Reasons for Change in Appropriation#

The change in this appropriation is due to the matching of funding to the projected expenditure for the Maritime Incident Response category.

Introduction #

Purpose of the Estimates of Appropriations#

The Estimates of Appropriations (the Estimates) provides members of Parliament with:

• Details of the terms of all proposed appropriations and of capital injections to departments and Offices of Parliament.
• Supporting information providing for each appropriation or category of a multi-category appropriation:
  • a concise explanation of what is intended to be achieved, and
  • (unless an appropriation has been exempted from end-of-year performance reporting)
    • a concise explanation of how performance will be assessed
    • who will report on what was achieved with the appropriation, and
    • in what document that report will be presented to the House of Representatives.

The information ensures that Parliament can exercise an appropriate level of scrutiny and control over the Government's operating and investing activities and provides a basis against which Parliament can, after the end of the financial year, assess actual performance against each appropriation (or category of a multi-category appropriation).

The 10 sector volumes of the Estimates are presented to the House of Representatives on the same day as the government introduces the main Appropriation Bill for each financial year.

Information No Longer in the Estimates of Appropriations#

Following recent amendments to the Public Finance Act 1989 (PFA), and subsequent changes to the format and content of the Estimates, the following information is no longer in the Estimates:

How the Estimates of Appropriations are Organised#

The Estimates of Appropriations are organised into 10 volumes (B.5 Vols 1-10) by sector, each of which covers one or more Votes. The scope of each sector and the allocation of Votes to a sector reflect a balancing of three desired characteristics - namely that each volume should, where possible:

• reflect natural sectors
• keep together Votes administered by the same department, and
• keep together Votes allocated to a particular select committee of the House of Representatives for examination.

The number of sectors and coverage of each sector was set initially in consultation with the Finance and Expenditure Committee.

There are 54 Votes for 2014/15 as:

• Vote Economic Development and Vote Employment have been combined into Vote Economic Development and Employment
• Vote Commerce and Vote Consumer Affairs have been combined into Vote Commerce and Consumer Affairs, and
• Vote Veterans' Affairs - Social Development has been merged into Vote Social Development.

The table below shows the Votes by Sector and which departments are in each sector.

Votes in Each Sector#

Appropriations#

Purpose and Nature of Appropriations#

An appropriation is a statutory authority from Parliament allowing the Crown or an Office of Parliament to incur expenses or capital expenditure.

Neither the Crown nor an Office of Parliament can legally incur any expense or capital expenditure - as those terms are defined in the PFA - unless it is expressly authorised by or under an Act of Parliament.

Limits Created by Appropriations#

Each appropriation is allocated to, and managed as, one of seven types of appropriation.

Each appropriation has a defined scope that limits the uses or activities for which the expenses or capital expenditure can be incurred. The scope should be sufficient on its own to establish the nature and extent of the authority to incur expenses or capital expenditure. The wording of the appropriation scope should achieve the balance between being sufficiently precise to act as an effective constraint against non-authorised activities and not so specific that it inadvertently limits activity intended to be authorised.

Except in a very limited number of cases (eg, permanent appropriations or revenue dependent appropriations) an appropriation also limits the amount of expenses or capital expenditure that can be incurred, and the time period within which those expenses or capital expenditure can be incurred.

Aside from the very limited exclusions provided for in the PFA, the amount of expense or capital expenditure authorised by an appropriation is measured in accordance with generally accepted accounting practice.

Responsibility for Appropriations#

The PFA requires each appropriation to be the responsibility of one Minister (or the Speaker) and to be administered by one department (or an Office of Parliament).

A Vote is a group of appropriations (and can be a single appropriation) administered by a single department. Different appropriations within a Vote may be the responsibility of different Ministers.

Types of Appropriation#

The PFA provides for seven types of appropriation. Four appropriation types authorise the incurring of expenses; one type authorises the incurring of capital expenditure; and the remaining types authorise both. These appropriation types can be further differentiated by whether the expenses or capital expenditure are departmental or non-departmental transactions.

Types of Output Expense Appropriations#

Some variation is possible for output expense appropriations. For example, the constraint on the amount of expense that can be incurred is not always a fixed sum.

Appropriation Period#

Three kinds of appropriation can be distinguished on the basis of period - annual and multi-year (as referred to in the above table on types of output expense appropriations), and permanent:

• Annual Appropriations - Most appropriations allow expenses or capital expenditure to be incurred only during a particular financial year. The amounts for RDAs are forecasts only.
• Multi-Year Appropriations (MYAs) - The PFA also permits appropriations that allow expenses or capital expenditure to be incurred during a specified period that spans the whole or parts of more than one financial year, but no more than five financial years.
• Permanent Appropriations (sometimes referred to as permanent legislative authorities or PLAs) -Permanent appropriations are authorised by legislation other than an Appropriation Act and continue in effect until revoked by Parliament. Generally the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations with limits set in cash terms, section 11(2) of the Public Finance Act 1989 requires that they be reported on an accrual basis. The usual legislative wording allows for expenses to be incurred for the purpose specified in the legislation “without further appropriation than this section”. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Types of Crown Revenue and Capital Receipts#

An operating and capital split also applies to Crown revenue and receipts. The following table outlines the three Crown revenue/receipt types:

Capital Injections and Movements in Net Assets#

A capital injection is an investment by the Crown in a department (or an Office of Parliament), which increases the department's net asset balance. Section 12A of the PFA requires capital injections to departments or an Office of Parliament to be authorised under an Appropriation Act.

Further information on capital injections and other movements in a department's net asset balance appears in the Estimates in a Vote that has appropriations belonging to a department's Responsible Minister. The movements reconcile a department's opening and closing net asset balances. This makes it easier to see the balance sheet flows.

Guide to Reading the Estimates of Appropriations#

After the introduction in each sector volume, the following information is provided, where applicable, for each Vote within the sector.

Guide to Reading the Estimates of Appropriations (continued)#

* This appropriation is used for the salaries of the Officers of Parliament as determined by the Remuneration Authority and for events that cannot be related back to output production.

** The purchase or development of assets by a department (other than an intelligence and security department) is made under a permanent appropriation authorised by section 24 of the PFA. Capital expenditure is defined in the PFA as the cost of assets acquired or developed, including tangible, intangible or financial assets, and any ownership interest in entities, but excluding inventories.

Useful Links#

• The suite of documents presented to the House on Budget day can be accessed in the Budgets section of the website: www.treasury.govt.nz/budget/2014
• Summary Tables, which are available online, provide a high-level perspective and comparative “ready reference” for all appropriations (annual, permanent and MYAs). They cover:
  • the trends for all Votes - showing actual or estimated actual totals for the five years to 2013/14, Budget totals proposed for 2014/15 and estimated totals for the three financial years to 2017/18 with respect to each type of appropriation and of Crown revenue and capital receipts
  • each appropriation type and total appropriations - showing budgeted and estimated actual totals for 2013/14 and totals proposed for 2014/15 for each Vote
  • current-year revenue-dependent appropriations for each Vote
  • multi-year appropriations by Vote, appropriation type and period
  • capital injection authorisations for 2014/15, and
  • types of Crown revenue and Crown capital receipts for 2013/14 and 2014/15 associated with each Vote.

For inclusion in the Summary Tables, MYAs are converted into actual or forecast amounts for each financial year. The summary tables can be accessed www.treasury.govt.nz/budget/2014/summarytables/estimates

An electronic archive of Budgets of the Government of New Zealand from 1997 to 2013 can be accessed here: www.treasury.govt.nz/budget/archive

How the Estimates Relate to Other Performance Information presented to the House #