External Sector - Information Supporting the Estimates 2010/11 - Budget 2010

Information Supporting the Estimates is organised on the basis of sectors, with each Vote and its administering department allocated to one sector (with a small number of exceptions). The Information Supporting the Estimates comprises of sector overview information, together with statements of responsibility; performance information for appropriations in Votes covered by the sector; and statements of forecast service performance and forecast financial statements of departments included in the sector. Statements of Intent of departments included in the sector form part of the supporting information.

 

Cover, Contents#

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Introduction#

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• Purpose of Information Supporting the Estimates
• Votes and Departments in Each Sector
• Purpose and Nature of Appropriations
• Guide to Reading Information Supporting the Estimates
• Terms and Definitions
• Useful Links

Sector Overview#

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• Ministerial Statements of Responsibility
• Chief Executive Statements of Responsibility

Performance Information for Appropriations in Each Vote#

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• Vote Customs
• Vote Defence
• Vote Defence Force
• Vote Foreign Affairs and Trade
• Vote Official Development Assistance
• Vote Veterans' Affairs - Defence Force

Statement of Forecast Service Performance of Departments#

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Forecast Financial Statements of Departments#

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• Statement of Common Accounting Policies
• New Zealand Customs Service
• Ministry of Defence
• New Zealand Defence Force
• Ministry of Foreign Affairs and Trade

Statements of Intent of Departments (separately produced but forming part of this volume)#

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• New Zealand Customs Service
• Ministry of Defence
• New Zealand Defence Force
• Ministry of Foreign Affairs and Trade

Purpose of Information Supporting the Estimates#

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The Information Supporting the Estimates provides members of Parliament with information on expected performance to:

• support their examination of the appropriations and other authorities requested by the Government in the first Appropriation Bill for the forthcoming financial year, and
• provide a basis against which they can later assess the actual performance of each individual department and Office of Parliament over that financial year.

The Information Supporting the Estimates is organised into 10 volumes 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 in consultation with the Finance and Expenditure Committee. The 10 sectors are:

• Economic Development and Infrastructure Sector
• Education and Science Sector
• Environment Sector
• External Sector
• Finance and Government Administration Sector
• Health Sector
• Justice Sector
• Māori, Other Populations and Cultural Sector
• Primary Sector
• Social Development and Housing Sector.

 

Votes and Departments in Each Sector#

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Purpose and Nature of Appropriations#

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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 Public Finance Act 1989 (PFA) - unless it is expressly authorised by or under an Act of Parliament.

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

Limits Created by Appropriations#

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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.

In most cases 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.

As generally accepted accounting practice does not normally treat GST as an expense, appropriation amounts also generally exclude GST. Prior to 2005/06, however, appropriations included applicable GST. All prior-year appropriation data, such as in the Summary of Trends table in the Estimates and the Summary of Financial Activity Table for each Vote in Information Supporting the Estimates - have been adjusted to exclude GST to allow appropriate comparison.

Responsibility for Appropriations#

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Each appropriation is the responsibility of a designated Minister, who controls the right to use that appropriation within the limits authorised by Parliament. A department is also assigned to administer that appropriation in accordance with the Minister's wishes concerning its use.

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#

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The PFA provides for six types of appropriation. Four appropriation types authorise the incurring of expenses; one type authorises the incurring of capital expenditure; and the remaining type authorises 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#

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A number of variations are possible for output expense appropriations. In particular, the constraint on the amount of expense that can be incurred is not always a fixed amount; and an output expense appropriation can cover more than one class of outputs.

Appropriation Period#

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The length of the appropriation period affects how appropriations are presented in the Estimates and Supplementary Estimates. 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 listed in the Estimates and Supplementary Estimates allow expenses or capital expenditure to be incurred only during a particular financial year. The annual amounts, for which parliamentary authority is being sought, are shown in bold type in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote. The amounts for RDAs and annual DDAs are forecasts only, and so are not shown in bold type.
• 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. The details of each MYA, including its commencement date and expiry date, are specified in Details of Multi-Year Appropriations in the Estimates and Supplementary Estimates for relevant Votes.
• 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 that 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 or capital expenditure to be incurred for the purpose specified in the legislation “without further appropriation than this section”. Details of permanent appropriations are included in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote for completeness, though the amount specified is a forecast rather than a limit. The amounts of permanent appropriations are therefore not shown in bold type. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Guide to Reading Information Supporting theEstimates#

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The Information Supporting the Estimates for each of the 10 sectors comprises five components, each of which is briefly described, below.

1 Sector Overview Information

The first component of the Information Supporting the Estimates may include a statement, agreed by all Ministers responsible for appropriations in each Vote included in the sector, that presents an overview of the sector and a high-level summary of the government's expectations and priorities. The Overview also includes Ministerial and Chief Executive Statements of Responsibility for the information provided in the Information Supporting the Estimates.

2 Performance Information Relating to Appropriations in Each Vote#

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The second component of the Information Supporting the Estimates presents performance information relating to each appropriation.

Thetitle pages for each Vote specify the Minister(s) responsible for existing and proposed appropriations in the Vote, and the Responsible Minister for the department. The performance information meets the requirements of sections 15 and 41(1)(e) of the PFA and contains up to six parts. If particular information is not applicable to the Vote or a specific appropriation or type, or is otherwise unavailable, the relevant heading is not included.

Part 1 - Summary of the Vote

The Summary of the Vote comprises:

• Part 1.1 Overview of the Vote - A plain-language summary of the focus of the appropriations through a brief explanation of the Vote. The Overview also appears at the start of the Vote in the Estimates.
• Part 1.2 High-Level Objectives of the Vote - The objectives for the Vote presented through links and relationships and high-level priorities and outcomes to which they contribute. Where applicable, priorities and outcomes are drawn from the priorities and desired outcomes and published strategy documents. Links are also made to specific government strategies. Links may also be made to specific Government objectives.
• Part 1.3 Trends in the Vote - A presentation of the actual and estimated trends in the Vote, comprising:
  • Summary of Financial Activity - A table showing financial information over the preceding five years (actual, budgeted or estimated actual), the current year (Budget) and the following three years (estimated) for the type of appropriations and Crown revenue and capital receipts.
  • New Policy Initiatives - A table showing how new initiatives (and the associated expenses or capital expenditure) are allocated to appropriations in the Vote. References are included where appropriations in other Votes are affected by the same initiative.
  • Analysis of Significant Trends - High-level analysis of appropriations and Crown revenue and capital receipts by type over the nine financial years covered by the Summary of Financial Activity table, explanations of significant changes and may also contain graphical presentations.

• Part 1.4 Reconciliation of Changes in Appropriation Structure - a table providing a reconciliation and explanation of any changes in the structure or classification of appropriations made in the Budget year. These changes are restated for the previous financial year to facilitate comparison.

Part 2 - Details and Expected Performance for Output Expenses#

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This Part provides further detail about appropriations and expected performance for output expenses.

• Part 2.1 Departmental Output Expenses - Intended impacts, outcomes and objectives are presented for departmental output expense appropriations in the Vote. This is followed by information on each appropriation, including its scope, a table showing expenses and revenue (distinguishing the revenue sources between the Crown and others), a statement of reasons for change in the appropriation (if material), and tables detailing performance measures and standards for significant aspects of expected output performance, any conditions on use of appropriation, any memorandum accounts (which record accumulated surpluses and deficits incurred in the provision of outputs on a full cost-recovery basis), and any current and past policy initiatives affecting the appropriation.
  • Information on impacts and outcomes or objectives to which the outputs contribute is provided. Further information on the relationships between outputs, impacts, and outcomes or objectives is outlined in Part 1.2 and the Statement of Intent. Conditions on use include administrative criteria and processes contained in legislation, regulation and Government decisions, which may be reference in scope statement or performance measures. The current and past policy initiatives tables provides a five-year history of announced initiatives that impact on the Budget year, the preceding year and the following three years.
  • For MCOA, an explanation is provided as to why the classes of outputs have been grouped under a single appropriation, and the scope statement, expenses and revenue, and performance information is presented for each output class.
  • Information provided for MYAs enables the original appropriation to be reconciled to the adjusted level if changes have been approved or are proposed, and the balance remaining to be derived taking account of actual or estimated expenses incurred to date.
  • The appropriation scope, expenses and revenue, and output performance measures and standards match information required to be included in a department's Statement of Forecast Service Performance with respect to departmental output expense appropriations used by the department.
• Part 2.2 Non-Departmental Output Expenses - This sub-part contains comparable information to that presented in Part 2.1 on departmental output expense appropriations. The main differences are that details of third parties’ other revenue is not relevant and a summary of service providers is included.
  • The service providers table shows Crown entities and non-governmental organisations providing outputs funded through the Vote, and (where applicable) the mechanism for reporting actual performance to Parliament and the expiry of the Government's resource commitment. The reporting mechanisms are typically an entity's annual report or a report by the responsible Minister required by section 32A of the PFA. Where the provider is a Crown entity that is required to produce a Statement of Intent, its annual report may contain more detailed performance information at the output class or output level. ‘Section 32A' reports include a statement of service performance in relation to the appropriation.

Part 3 - Details for Benefits and Other Unrequited Expenses#

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Part 3 provides performance information about appropriations for benefits and other unrequited expenses incurred by the Crown. No departmental transactions arise under this appropriation type.

• Part 3.2 Non-Departmental Benefits and Other Expenses - Information on each appropriation includes impacts and outcomes intended to be achieved, a scope statement, expense components, reasons for material changes, any conditions of use, and details of any current and past policy initiatives over the five years up to and including the Budget year.

Part 4 - Details for Borrowing Expenses#

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This Part provides detail about appropriations for borrowing expenses. No departmental borrowing expense appropriations exist at present.

• Part 4.2 Non-Departmental Borrowing Expenses - The set of performance information is the same as that for non-departmental benefits and other expenses, except that conditions on use are no specified.

Part 5 - Details and Expected Results for Other Expenses#

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Part 5 provides detail about appropriations for:

• Part 5.1 Departmental Other Expenses - It is uncommon for this category of appropriation to be utilised. In the few cases where it occurs, the performance information is the same as that for non-departmental other expense appropriations except for a summary of reporting mechanisms.
• Part 5.2 Non-Departmental Other Expenses- Information on other expenses incurred by the Crown covers intended impacts and outcomes, appropriation scope, expenses analysed by component, reasons for material changes in the appropriation, expected results and standards, any conditions on use, any current and past policy initiatives, and a summary of mechanisms for reporting actual performance to Parliament.

Part 6 - Details and Expectations of Capital Expenditure#

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This Part provides further details about appropriations for capital expenditure.

• Part 6.1 Departmental Capital Expenditure - The purchase or development of assets by a department is made under a permanent appropriation authorised by section 24(1) of the PFA. Capital expenditure is defined in section 2 as the cost of assets acquired or developed, including tangible, intangible or financial assets, and any ownership interest in entities, but excluding inventories. The appropriation appears in the Vote that contains appropriations that are the responsibility of the department's Responsible Minister.
  • Information is provided on intended impacts and outcomes of the appropriation, its scope, expenditure analysed by standard asset categories, reasons for material changes in the appropriation, and expected results. The scope statement is in a standard form for all departments. The performance information relates to the department as a whole and is not limited to any specific capital injection.
• Part 6.2 Non-Departmental Capital Expenditure - Performance information for capital expenditure incurred by the Crown is the same as that for departmental capital expenditure except for not detailing asset categories and the addition of any conditions on use of the appropriation, any current and past policy initiatives, and a summary of the mechanism for reporting to Parliament.
  • The scope statement indicates the form of interest or asset acquired by the Crown, such as a capital injection (equity), loan or shares.

The following table summarises the performance information that is required for a ‘standard' appropriation in each sub-part.

Information on reasons for change, conditions on use, current and past policy initiatives, and reporting mechanisms appears where applicable or material. Memorandum accounts are relevant only in Part 2.1. Some variations exist for non-standard appropriations, including MCOAs in Parts 2.1 and 2.2 and MYAs in Parts 2.1, 2.2, 5.2 and 6.2. Furthermore performance information may not be available for some appropriations.

3 Statement of Forecast Service Performance of Departments#

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The third component of the Information Supporting the Estimates of Appropriations comprises the Statement of Forecast Service Performance for each department included in the sector, by reference to material already set out in Part 2.1 of Votes containing appropriations proposed to be used by the department.

4 Forecast Financial Statements of Departments#

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The fourth component of the Information Supporting the Estimates begins with a Statement of Common Accounting Policies applicable to all departments. The forecast financial statements for the forthcoming financial year for each department covered by the sector includes a:

• Statement of Forecast Comprehensive Income
• Statement of Forecast Changes in Taxpayers' Funds
• Forecast Statement of Financial Position
• Statement of Forecast Cash Flows
• Statement of Significant Assumptions.

Each department will include a Statement of Entity- Specific Accounting Policies detailing policies for any matters not addressed by the Statement of Common Accounting Policies (such as a “going concern” statement) or where its policies are more specific than the common policies (such as capitalisation thresholds and estimated useful lives of individual classes of assets). Notes to the Financial Statements provide additional details to assist interpretation of the accounts and to meet disclosure requirements outlined in legislation and accounting standards.

5 Statements of Intent of Departments#

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The final component of the Information Supporting the Estimates presents the Statements of Intent of the departments covered by each sector. These statements contain the information required by section 40 of the PFA. They focus on the medium term and generally cover:

• Nature and scope of the department's functions - A brief high-level description of the department's functions, addressing its role(s) and purpose and how it intends fulfilling them.
• Strategic direction - impacts and outcomes - A brief high-level overview of the department's strategic direction covering both the impacts and outcomes the department is seeking to achieve (or contribute to) and the strategic environment in which the department operates through, in particular, its responses to the government's priorities.
• Operating intentions - Information that describes how the department intends to achieve (or contribute to) those desired impacts and outcomes through its operations. This section should also include the main measures and standards the department will use to assess and demonstrate what it has achieved, including measures of outcome achievement, impact and cost effectiveness.
• Managing in a changeable operating environment - Information on the risks to achievement of the desired outcomes and priorities, and the department's mitigation strategies.
• Assessing organisational health and capability - The department's intentions for building and strengthening its internal capability, including its responses to the development goals for the State Services and its strategic approach to managing its asset base and forecast capital expenditure in the medium term. If capital expenditure is significant, it is in a separate section.
• Additional information and statutory reporting requirements - As required either by the responsible Minister or Minister of Finance, or by specific legislation.

Terms and Definitions#

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The table below contains terms that are used in the Estimates and the Information Supporting the Estimates.

Useful Links#

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The suite of Budget 2010 documents can be accessed in the Budgets section of the website: www.treasury.govt.nz/budget/2010. Documents providing guidance on the PFA and the public sector financial management system can be accessed in the Public Finance Overviews section of the Treasury's website: www.treasury.govt.nz/publications/guidance/publicfinance.

Ministerial Statements of Responsibility#

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Each of us is satisfied that the information on future operating intentions provided by our respective departments and included in the Information Supporting the Estimates for the External Sector is in accordance with sections 38, 40 and 41 of the Public Finance Act 1989 and is consistent with the policies and performance expectations of the government.

Chief Executive Statements of Responsibility#

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Ministry of Foreign Affairs and Trade

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the External Sector relating to the Ministry of Foreign Affairs and Trade and for the Votes for which the Ministry of Foreign Affairs and Trade is the administering department. Specifically, this information is contained in the Ministry of Foreign Affairs and Trade's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Ministry of Defence

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the External Sector relating to the Ministry of Defence and for the Vote for which the Ministry of Defence is the administering department. Specifically, this information is contained in the Ministry of Defence's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

New Zealand Defence Force

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the External Sector relating to the New Zealand Defence Force and for the Votes for which the New Zealand Defence Force is the administering department. Specifically, this information is contained in the New Zealand Defence Force's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

New Zealand Customs Service

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the External Sector relating to the New Zealand Customs Service and for the Vote for which the New Zealand Customs Service is the administering department. Specifically, this information is contained in the New Zealand Customs Service's statement of forecast service performance, forecast financial statements and statement of intent.

This information has been prepared in accordance with the Public Finance Act 1989. It is also consistent with the proposed appropriations set out in the Appropriation (2010/11 Estimates) Bill, as presented to the House of Representatives in accordance with section 13 of the Public Finance Act 1989, and with existing appropriations and financial authorities.

Performance Information for Appropriations Vote Customs#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Customs (M21)

ADMINISTERING DEPARTMENT: New Zealand Customs Service

MINISTER RESPONSIBLE FOR NEW ZEALAND CUSTOMS SERVICE: Minister of Customs

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Customs is responsible for the efficient and timely collection of Crown revenue forecast to be $10,823 million in the 2010/11 financial year.

The Minister of Customs is also responsible for the appropriations in the Vote for the 2010/11 financial year covering the following:

• a total of over $47 million on clearance and enforcement services related to passengers and crew
• a total of nearly $60 million on clearance and enforcement services related to goods
• a total of over $7 million on clearance and enforcement services related to craft
• a total of nearly $7 million on information and intelligence services
• a total of over $5 million on revenue collection
• a total of nearly $8 million on Policy advice and international services.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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The New Zealand Customs Service (Customs) contributes to the Government's aim to raise New Zealand's international competitiveness and lift productivity through the Government's goal to grow the New Zealand economy in order to deliver greater prosperity, security and opportunities for all New Zealand.

Customs is critical to advancing New Zealand's international competitiveness, productivity, and security. Customs facilitates legitimate trade and travel; manages border and revenue risks; provides significant infrastructure at the border; has a voice on customs, trade and border security through our policy and international services; and collects 15 percent of total Crown revenue.

Customs supports the objectives of a number of government agencies at the border, and works with groups of agencies towards shared objectives, in addition to working closely with industry. Customs currently chairs the Border Sector Governance Group, which is advancing the border sector work programme and the border sector's end outcomes of protection and facilitation. As the agency with the most significant presence at the border and focus on these outcomes, Customs makes a major contribution to this work.

Customs also works with other agencies on a variety of objectives, including support for New Zealand's expanding programme of trade agreements with the Ministry of Foreign Affairs and Trade, and working with the New Zealand Police to contribute to the whole-of-government response to illicit drugs.

From 2010/11, Customs will contribute to the Government's goals through a focus on three priorities agreed with the Minister of Customs and Prime Minister:

• improve competitiveness, security, and productivity at the border, by modernising New Zealand's border management system (Joint Border Management System/Trade Single Window - an electronic portal that provides an interface between industry and government agencies)
• increase disruption of supply chains for illicit drugs entering New Zealand, particularly methamphetamine and its precursors, through targeted operational activity
• enhance border agency coordination to reduce duplication and improve the experience for traders and travellers.

The following table shows how the day-to-day delivery of Customs' outputs, for which appropriations are sought, are linked and contribute to the Government's priorities and the Government outcomes relevant to Customs.

Contribution of Appropriations to Government Priorities and Outcomes

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Crown Revenue

Crown revenue is collected through customs duties and GST on imports and excise on alcoholic beverages, tobacco, and petroleum products. Figure 1 notes the proportion of collections by category of Crown revenue forecast to be collected in 2010/11.

2010/11 Crown revenue by category

Source: New Zealand Customs Service

Figure 2 illustrates growth in actual and forecast Crown revenue collected by category.

Crown revenue collections by category 2005/06 - 2013/14

Source: New Zealand Customs Service

Departmental Output Expenses

Annual appropriations for the purchase of departmental outputs are expected to increase by
$6.687 million for 2010/11 compared with 2009/10. The net change in the total appropriation is a combination of adjustments to savings requirements between 2009/10 and 2010/11 and additional operating funding in 2010/11 to advance the implementation of the automated passenger processing technology, the Joint Border Management System and digital tracking and surveillance technology. This is offset by one-off funding provided in 2009/10 for border management systems scoping and overseas aid projects that is not required in 2010/11.

Trends in comparative actual and estimated expenses for Output Expense appropriations under this Vote are shown in Figure 3 below.

Trends in total actual and estimated output expenses

Source: New Zealand Customs Service

The increase in output expenses in 2010/11 and future years is primarily as a result of the development of the Joint Border Management System and the implementation of automated passenger processing and digital tracking and surveillance technologies.

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

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Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-6.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

For further information on the intended impacts, outcomes and objectives of the departmental output expense appropriations, please see the Statement of Intent for the New Zealand Customs Service.

Clearance and Enforcement Services Related to Craft (M21)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - On occasions, the number of high and very high risk craft, and the number of other incidents requiring Customs' response teams, exceeds response team availability. When this occurs, allocation of response teams is prioritised in accordance with risk. Each such decision is subject to an internal report.

Note 2 - Secondary intervention may range from talking to the crew to a full rummage. This output maintains high levels of compliance, and acts as a check on risk assessments.

Current and Past Policy Initiatives

Clearance and Enforcement Services Related to Goods (M21)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - The percentage of import transactions deemed compliant is lower than the percentage of export items deemed compliant because the nature of the risk is different between imports and exports, the nature of the traders involved is different, and risk for many exports is managed under the Secure Exports Scheme.

Note 2 - This is a measure of the quality of Customs' intelligence targeting. If this is working well, it is expected that a moderate proportion of mail that is inspected will require some further Customs intervention. This may include identification of wrong declarations, seizures of goods, forfeit of goods, administrative penalties, referrals to other agencies, and the collection of intelligence information.

The total of this plus the previous measure relating to mail items referred for secondary screening should neither be very high (which would suggest that Customs' net is not cast widely enough to be sure of capturing illicit activity) nor very low (which would suggest that too much mail is being inspected).

Note 3 - Measures for trade assurance and compliance are under development for inclusion in the 2011/12 performance measures.

Note 4 - Investigations measures apply to all investigations cases. The 25 percent of investigations cases that take more than 12 months are particularly complex, and may be connected to subsequent investigations. They may be open for a number of years.

Note 5 - A serious investigation case involves, or has the potential to involve, serious community harm. Examples of serious investigation cases would include those that involve more than $250,000 drug harm (as calculated using the New Zealand Drug Harm Index), Class A or B drugs for supply, objectionable material involving child exploitation, or the importation of counterfeit medicines.

Current and Past Policy Initiatives

Clearance and Enforcement Services Related to Passengers and Crew (M21)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - All passengers are provided with an information pamphlet to assist them with completing their Customs declaration. All passengers and crew are assessed for risk, including screening against advance passenger information. Information is collected from all passengers and crew as part of the facilitation process. All passengers and crew are subject to dog and x-ray screening, and may also be referred from Ministry of Agriculture and Forestry screening.

Note 2 - 1.1 to 1.5 percent of passengers and crew are selected for further risk assessment, and directed to secondary areas for further intervention. From this point on, passengers and crew are no longer being facilitated, and Customs is carrying out an enforcement role.

Note 3 - All passengers who are searched produce either intelligence information, or discovery of prohibited, restricted, or dutiable items, or both. A measure is in development to identify the interventions that result in finding undeclared restricted or prohibited items or dutiable goods.

Current and Past Policy Initiatives

Information and Intelligence Services (M21)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - Further measures around information services are in development.

Note 2 - The National Maritime Coordination Centre prioritises and matches available maritime surveillance craft to the demand for maritime surveillance from civilian agencies. This ensures optimal use of the craft of all agencies.

Current and Past Policy Initiatives

Policy Advice and International Services (M21)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - The quality characteristics for policy advice (dimension followed by relevant standard) are:

• Purpose - the aim of the advice is clearly stated and it answers the questions set.
• Logic - assumptions behind the advice are explicit and the argument is logical and supported by the facts.
• Accuracy - facts in the papers are accurate and all material facts are included.
• Evaluation - advice provided includes, where appropriate and relevant, the outcomes to be achieved by the recommended course of action and the means by which that achievement will be evaluated.
• Options - an adequate range of options is presented and the benefits, costs and consequences of each option to the Government and the community are assessed.
• Consultation - consultation has occurred: with other government agencies and other affected parties and possible objections to proposals were identified; and with the Maori community on all relevant policy developments as required.
• Practicality - problems of implementation, technical feasibility, timing, and consistency with other policies have been considered.
• Presentation - the format meets Cabinet Office and ministerial requirements; the material is effectively, concisely, and clearly presented, has short sentences in plain English, and is free of spelling or grammatical errors.
• Timeliness - papers are provided in time to meet Cabinet Office and ministerial requirements, or as otherwise agreed.

Current and Past Policy Initiatives

Revenue Collection (M21)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This is a new appropriation resulting from a review of Vote Customs output classes. From 2010/11 outputs of the New Zealand Customs Service will be provided from within six newly defined output classes. In 2010/11 there is no material change to the outputs being delivered by the New Zealand Customs Service.

Output Performance Measures and Standards

Note 1 - Deferred payment benefits both Customs and traders: eligible traders gain flexibility, and this assists their revenue compliance.

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Change in Doubtful Debt Provision (M21)

Scope of Appropriation

Expenses

World Customs Organisation (M21)#

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Scope of Appropriation

Expenses

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

New Zealand Customs Service - Capital Expenditure PLA (M21)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The 2010/11 budgeted capital expenditure includes funding provision to:

• implement the first tranche of the Joint Border Management System-Trade Single Window
• introduce advanced tracking and surveillance technology
• complete the programme to install self service border clearance technology for eligible travellers flying trans-Tasman routes
• establish a new National Targeting Centre
• complete the consolidation and relocation of Customs' air and sea cargo inspection activities in Auckland.

The move of the Wellington Customhouse to new premises is programmed for the first half of 2010/11.

Performance Information for Appropriations Vote Defence#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Defence (M22)

ADMINISTERING DEPARTMENT: Ministry of Defence

MINISTER RESPONSIBLE FOR MINISTRY OF DEFENCE: Minister of Defence

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Defence is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

• a total of just over $1.900 million for audits and assessments of the New Zealand Defence Force and Ministry of Defence
• a total of just over $3.900 million for managing procurement or refurbishment, on behalf of the Crown, of various items of equipment contributing to a capability of the New Zealand Defence Force
• a total of just under $4 million for policy advice, management of international defence relations and services to the Minister
• a total of just under $229 million for the purchase, modification, or refurbishment of major items of defence equipment for the New Zealand Defence Force.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Link to Government Priorities

The completion and implementation of the Defence Review: The Ministry of Defence is undertaking a "deep" Review. This means the Government is critically examining how the Defence Force, in the future, can best meet New Zealand's security needs. As a "deep" Review it will provide the basis for defence policy both in the medium term, but also over the longer term, taking into account the major capabilities that will be reaching the end of their lives within the next 20 years. The Review will establish a clear policy framework based on an assessment of our current and future security environment. This is critical to determining a capability mix and force structure that provides the Government with an appropriate set of options for meeting its security obligations, as well as delivering value for money.

Ensuring that the New Zealand Defence Force (NZDF) remains effective and responsive: The Government expects the Defence Force to be able to undertake a range of key tasks - from providing assistance to New Zealanders when required, to meeting obligations to our near neighbours in the South Pacific (for example responding to emergencies such as the recent natural disasters in Samoa, Tonga, and the Cook Islands), and to undertaking peacekeeping and nation building such as that in the Solomons, Timor Leste and Afghanistan.

Consolidating the ANZAC relationship: New Zealand's close relationship with Australia is creating new opportunities to work with Australia and develop genuinely complementary capabilities. There will be particularly focus in the following areas:

• Air transport.
• Response forces in the South Pacific.
• Closer capability development cooperation.
• Defence industry capability.

The Ministry of Defence will play a central role in developing and leading the implementation of closer ANZAC cooperation.

Confirming a sound and balanced capital acquisition strategy for defence equipment within financial guidelines: Past procurements have been expensive, problematic and subject to lengthy delays. This has created unplanned operating implications. The overall effect has been to lessen confidence in the procurement system and increase risk through programmes that do not deliver on time. The Ministry of Defence will implement changes to improve this.

Putting in place an approach to defence management which ensures that the defence capabilities the Government needs are delivered: It is clear that for the next few years New Zealand will be under considerable fiscal restraint. Defence needs to review the way they operate and ensure it provides best value for money. The Ministry of Defence will work in concert with the Defence Force and central agencies in this regard.

In addition, there would be the continuing provision to the Minister of Defence, by the Secretary of Defence, of reports of assessments and audits of the New Zealand Defence Force and the procurement activities of the Ministry of Defence, in accordance with the Defence Act.

Contribution of Appropriations to Government Priorities and Outcomes

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

The departmental appropriations in Vote Ministry of Defence, which are detailed in the Summary of Financial Activity table in Part 1.3 above, show the significant changes discussed below.

Departmental Output Expense Appropriations

Significant movements over this time period are:

• The increase of $556,000 between 2005/06 and 2006/07 is mainly due to an increase of $158,000 in depreciation and capital charge on the Aitken Street building and expenditure of $396,000 on the Defence Capability Resourcing Review.
• The increase of $470,000 between 2006/07 and 2007/08 is mainly due to an increase of $448,000 in expenditure on the Defence Capability Resourcing Review.
• The increase of $2.716 million between 2007/08 and 2008/09 is mainly due to contract mediation relating to warranty issues of a acquisition project.
• The decrease of $984,000 between 2008/09 and 2009/10 is mainly due to an increase of $200,000 for additional project management resources, a further $420,000 to total $710,000 on the Defence Review 2009, and a reduction of $1.600 million in contact warranty issues.
• The reduction of $1,917 million in funding between 2009/10 and 2010/11 is due to the cessation of associated one-off funding of $710,000 for Defence Review 09, and the $1,200 million relating to contact warranty issues and pre-acquisition cost in the 2009/10 financial year.
• The small movement in the appropriation currently planned for years 2011/12 to 2013/14 is due to the reduced contribution to communications inter-operability project in its latter years.

Departmental Capital Expenditure

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

Non-Departmental Capital Expenditure

The movements in capital expenditure in each of the years 2005/06 to 2013/14 relates to the volume of projects underway in each financial year and changes in the forecast timing of achievement of project milestones and associated changes in the timing of payments for those milestones.

Capital Receipts

The Ministry of Defence receives Capital Receipts from the New Zealand Defence Force from the sale of defence equipment. Changes in Capital Receipts during the years 2005/06 to 2009/10 reflect the number, structure and scope of the projects undertaken on behalf of the Crown during the same time period. Years 2010/11 to 2013/14 reflect the anticipated number, structure and scope of the projects to be undertaken on behalf of the Crown during the same time period.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Audit and Assessment of Performance (M22)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

A small amount of cost savings have been identified within Audit and Assessment of Performance.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Management of Equipment Procurement (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

There will be no costs incurred in the 2010/11 year associated with the Protector procurement project. The appropriation in 2010/11 reduces by $1.007 million due to the one off costs included in 2009/10 of Protector mediation costs $800,000 and pre-acquisition costs of $207,000.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Policy Advice (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The appropriation reduces by $910,000 due to one off costs in 2009/10 for the Defence and Improved Value for Money reviews.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Ministry of Defence - Capital Expenditure PLA (M22)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The decrease in appropriation for 2010/11 is due to the timing for upgrades and replacement of information technology infrastructure.

Part 6.2 - Non-Departmental Capital Expenditure#

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Intended Impacts, Outcomes and Objectives

Defence Equipment (M22)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The appropriation for Defence Equipment varies depending upon the number and scope of projects.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual results for each non-departmental capital expenditure appropriation.

Performance Information for Appropriations Vote Defence Force#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Defence (M22)

ADMINISTERING DEPARTMENT: New Zealand Defence Force

MINISTER RESPONSIBLE FOR NEW ZEALAND DEFENCE FORCE: Minister of Defence

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Defence is responsible for appropriations in Vote Defence Force, totalling just over $2,852 million, for the 2010/11 financial year.

This includes just over $2,279 million for departmental output expenses and a capital expenditure appropriation of just under $573 million for the purchase of assets. The $2,279 million amount covers the following:

• a total of just over $2,159 million on the Navy, Army, and Air Force to provide the Government with a range of military forces to protect and advance the security and interests of New Zealand. These forces are held at appropriate levels of capability and preparedness to protect New Zealand's territorial sovereignty and to contribute to regional and global security efforts. Most of these forces will also contribute a range of services to other government departments and the New Zealand community when not committed to operations overseas. The breakdown of appropriations, by Service, is as follows:
  • Navy: just under $673 million
  • Army: just over $843 million
  • Air Force: just over $643 million

• a total of just over $78 million on Operationally Deployed Forces

• a total of just under $26 million on a Multi-Class Output Appropriation (MCOA), Miscellaneous Support Activities, that includes New Zealand Defence Force support to the Mutual Assistance Programme, the New Zealand Cadet Forces, Government-initiated Youth Development Schemes (Limited Service Volunteer courses, Service Academies and Military-style Activity Camps), and Service Military Museums

• a total of just over $16 million on military policy development, coordination and advice to the Government.

Of the total appropriation, the New Zealand Defence Force expects to recognise about $33 million in third-party revenue (Revenue Department and Revenue Other) in 2010/11. The remainder is funded from Revenue Crown.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Defence Act 1990

Under the Defence Act 1990, New Zealand's Armed Forces are raised and maintained for:

• the defence of New Zealand and the protection of its interests, whether in New Zealand or elsewhere
• the contribution of forces under collective security treaties, agreements or arrangements
• the contribution of forces to the UN or other organisations or States for operations in accordance with the principles of the charter of the UN.

The Defence Act 1990 also allows the Armed Forces to be made available for the performance of public services and assistance to the civil power in time of emergency, either in New Zealand or elsewhere.

Primary Mission of the New Zealand Defence Force

The primary mission of the NZDF remains:

"To secure New Zealand against external threat, to protect our sovereign interests, including in the Exclusive Economic Zone, and to be able to take action to meet likely contingencies in our strategic area of interest."

The following table shows how the day-to-day delivery of NZDF Output Expenses, for which appropriations are sought, are linked and contribute to the Government's priorities and outcomes for Defence.

Contribution of Appropriations to Government Priorities and Outcomes

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

The departmental appropriations in Vote Defence Force, which are detailed in the Summary of Financial Activity table in Part 1.3 above, show the significant changes recorded below.

Departmental output expense appropriations

The following changes are noted:

• The total increase in annually appropriated output expenses of almost $157 million between 2005/06 and 2006/07 is shown in the following table:

• The total increase in annually appropriated output expenses of $65 million between 2006/07 and 2007/08 is shown in the following table:

• The major items that contributed to the $222 million increase in annual departmental output expense appropriations between 2007/08 and 2008/09 are shown in the following table:

• The major items that contributed to the $121 million increase in annual departmental output expense appropriations between 2008/09 and 2009/10 are shown in the following table:

Other expenses

• The Other Expense appropriation of $1.665 million in 2006/07, by way of a write-off, was a technical adjustment to provide for asset-related costs held on the NZDF balance sheet to be written off by 30 June 2007, in accordance with Audit New Zealand advice.
• An Other Expense of $2.700 million, for expensing by 30 June 2008, related to the disposal cost of items included in the NZDF Statement of Financial Position, in accordance with Audit New Zealand advice.
• An Other Expense of $3 million, for expensing by 30 June 2009, of costs included in the NZDF Statement of Financial Position.

Comparison: 2009/10 with 2010/11

Departmental output expenses

Appropriations for the purchase of NZDF outputs for the year ending 30 June 2011 include the following Cabinet-agreed departmental output expense funding changes that were considered during the 2010 Budget process:

• An increase in 2010/11 and outyears of $35 million for depreciation.
• An expense transfer of $10 million from 2009/10 to 2010/11.
• An increase in Operationally Deployed Forces in 2010/11 of $14.048 million.

The annual departmental output expense appropriations sought for Vote Defence Force in 2010/11 exceed those for 2009/10 by $57 million. The major items and values that contribute to this increase are shown in the following table:

Other expenses

An Other Expense of $3.300 million for expensing by 30 June 2010 of costs included in the Statement of Financial Position.

An Other Expense of $90 million to provide for a write down in the value of the Royal New Zealand Navy Project Protector vessels before 30 June 2010.

Capital expenditure

The Capital Expenditure appropriations shown in the trends table between 2005/06 and 2012/13 disclose the annual payments for equipment purchases to be made to the Ministry of Defence, and for NZDF managed capital projects.

Outyears: 2011/12 - 2013/14

Subject to the outcomes of the current Defence Review, including the Value for Money Review, there are no significant forecast changes for the outyears 2011/12 - 2013/14.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Most of the NZDF's day-to-day activities in New Zealand, and for which it is funded, are designed to prepare the force elements of the Navy, Army and Air Force to contribute to operations as approved by the Government of the day. Coupled with the unavoidable uncertainty of security events, competing priorities, and the relative irreversibility of many major acquisition decisions, this makes the NZDF complex and unique compared to most other government departments. Those departments, in their day-to-day activities, are actually delivering their "end product" (their services), whereas the NZDF's ultimate "end product" is the effective contribution of NZDF force elements to operational missions. This is achieved through the NZDF Output Expense "Operationally Deployed Forces" and, in the New Zealand environment, "Multi-Agency Operations and Tasks (MAO&T)." The focus of what the NZDF does, therefore, is primarily geared to the preparation of forces and delivery of this ultimate "end product" or goal. The impacts the NZDF is striving to achieve through the delivery of current NZDF Outputs are shown in the following table:

NZDF Performance Information

Prior to detailing the expected performance of each of the NZDF's Output Expenses for which appropriations are sought, it is necessary to provide information on three essential elements of the NZDF's performance measurement process. This information is necessary for a proper understanding of the performance indicators and performance rating scale, used under the NZDF's Operational Preparedness and Reporting System (OPRES), and Employment Contexts which, together, form the basis against which 13 of the NZDF's 16 Output Expenses are assessed. Rather than repeating this information against every one of the relevant 13 Output Expenses, it is recorded here to refer back to, as required. The information is contained under the next few headings.

Indicative Key Performance Indicators and Performance Measures

The table that follows shows the indicative Key Performance Indicators (KPIs) and Performance Measures used for all Force Elements of the Navy, Army and Air Force. These are applicable to all NZDF Output Expenses relating to the Navy, Army and Air Force, which appear later in this part of the Information Supporting the Estimates of Appropriations. The table is "indicative" as the actual measures used by each of the Services do vary slightly; reflecting that the Navy and Air Force are primarily based on platforms, whereas the Army is based more on personnel. The Service-specific KPIs are detailed in appropriate NZDF directives.

Within OPRES, the performance of all force elements is assessed against four elements of preparedness - Readiness, Combat Viability, Deployability and Sustainability. Within each of these elements, measures are applied to, predominately, personnel, equipment and training - as shown in the following table:

NZDF Operational Preparedness and Reporting System (OPRES) Performance Rating Scale

The following Performance Rating Scale is used, within OPRES and in the Statement of Service Performance (SSP) tables that follow, to quantify Force Element performance standards in achieving preparedness relative to the Directed Level of Capability (DLOC). A performance rating ('P' rating) for a Force Element represents the distillation of a vast amount of underlying performance assessment at varying levels of the NZDF - from units to headquarters. In particular, it involves assessment against each of the key performance indicators, as in the table above, against all applicable Employment Contexts. The 'P' rating standards also reflect the NZDF's priorities for each force element for the financial year. For example all P1 rating standards represent priority one, all P2 rating standards represent priority two, and so on.

Note - DLOC should be seen as a band within which there are five ratings (P1 to P5). A force element that has been set a P1 rating standard is at DLOC if it achieves a P1 rating. If that force element only achieves a P2 rating, it is below its DLOC. Similarly, a force element that has been set a P2 rating standard for the year is at DLOC if it achieves a P2 rating - even though it is not "fully prepared." For reporting purposes, if a force element is below its stated "P" rating, an explanation as to why that situation has occurred, as well as what is required to return it to its stated "P" rating must be provided; this will include one or more of time, personnel, equipment or training.

External audit of the NZDF's performance

It should also be noted that, other than the NZDF's internal mechanisms for measuring performance, the following agencies also have a major role to play in evaluating the performance of the NZDF, including output performance:

• the Evaluation Division of the Ministry of Defence
• the Office of the Controller and Auditor General, and
• Audit New Zealand.

Employment contexts

Strategic guidance provides information on the circumstances in which the Government may choose to use military forces. The NZDF uses this guidance to develop geographically grouped Employment Contexts (ECs). ECs are descriptions of representative and illustrative security events for which there is a likelihood that a New Zealand Government would expect to make a military response should they occur. ECs are selected through assessment of New Zealand's geo-strategic situation and international security trends.

The ECs are chosen on the basis of their likelihood of occurrence in the near and longer terms and the consequences for New Zealand's Defence Outcomes if the NZDF was unable to provide an appropriate response. ECs include high level Operational Concepts which, in turn, drive Services' and Joint Mission Essential Tasks (JMETs), that is, those tasks that the deployed forces must be able to perform. The JMETs drive the priorities for the Services' and joint annual training activities and which determine the output parameters that need to be delivered in order to meet the Government's requirements. The ECs also designate the anticipated time (known as the Response Time) available for the final preparation of force elements for their operational deployment; this affects the level of capability that must be maintained on an annual basis. Concepts for Operations and Contingency Plans can then be developed for relevant ECs. Current EC Operational Concepts list the most likely force elements that would be involved in each security event.

These force element lists are a guide only and are not exhaustive; each security event may require the addition or deletion of some force elements. ECs provide the detail that ensures the NZDF output quality dimension is consistent with defence policy. The ECs, which are covered in more detail in the NZDF Output Plan and other NZDF-internal documents, are as listed below. The 'bolded' ECs (such as EC 1D, 2B, 4A, etc.,) are those that have been fully developed and against which the Force Elements of the NZDF, as applicable, are assessed for preparedness - as shown in the Output Expense tables that follow.

EC 1 - Security Challenges and Defence Tasks in New Zealand and its environs:

• EC 1A - Illegal exploitation of marine resources within the New Zealand EEZ, and other low-level threats to New Zealand territorial sovereignty.
• EC 1B - Natural and manmade disasters.
• EC 1C - Support to the delivery and maintenance of essential services in exceptional circumstances, including the hosting of major events.
• EC 1D - Terrorist and Asymmetric Threats.
• EC 1E - Support for Antarctic presence.

EC 2 - Security Challenges to New Zealand's Interests in the South Pacific:

• EC 2A - Illegal exploitation of marine resources within South Pacific EEZs, and other low-level threats to South Pacific nations' territorial sovereignty.
• EC 2B - Natural and manmade disasters.
• EC 2C - State failure or fragility leading to internal conflict and/or humanitarian crisis.
• EC 2D - Terrorist Threats.
• EC 2E - Challenges to legitimate governments, including civil war and secessionist conflict.

EC 3 - Challenges to New Zealand and Australia Common Security Interests:

• EC 3A - Illegal exploitation of marine resources within Australia's EEZ, and other low-level threats to Australia's territorial sovereignty.
• EC 3B - Natural or manmade disasters.
• EC 3C - External aggression against Australia.
• EC 3D - Terrorist or Asymmetric Threats.

EC 4 - Security Challenges to New Zealand's Interests in the Asia-Pacific Region:

• EC 4A - Aggression to alter maritime boundaries or seize resources, or threats to freedom of navigation.
• EC 4B - Natural or manmade disasters.
• EC 4C - State failure or fragility leading to internal conflict and/or humanitarian crisis.
• EC 4D - Terrorist Threats.
• EC 4E - Weapons of Mass Destruction (WMD) proliferation.
• EC 4F - Inter-State conflict.
• EC 4G - Acts of piracy and people smuggling.

EC 5 - Security Challenges to New Zealand's Interests in Global Peace and Security:

• EC 5A - Aggression to alter maritime boundaries or seize resources, or threats to freedom of navigation.
• EC 5B - Unresolved conflict or conflict resolution process where protagonists have sought third party resolution assistance.
• EC 5C - State failure or fragility leading to internal conflict and/or humanitarian crisis.
• EC 5D - Terrorist Threats (the "War against Terrorism").
• EC 5E - WMD proliferation.
• EC 5F - Contravention of international norms that triggers a multi-national response.
• EC 5G - Major breakdown in international security leading to wide-scale war.

Services in Support of the Community - including Multi-Agency Operations and Tasks (MAO&T)

General

The NZDF has the capacity to deliver a range of services in support of other government departments, the community, and foreign and defence policy objectives, while conducting the training activities needed to maintain the DLOC for operational employment.

Approval levels for the provision of these services range from Cabinet/Ministerial level for significant events to unit commanders for minor local support tasks. Generally, tasks will be approved on the direction of the Chief of Defence Force, a Service Chief (Navy/Army/Air Force), or the Commander Joint Forces NZ. Details are contained in Defence Force Orders 1 (DFO 1), Chapter 13 - Assistance to Community Organisations.

Some general services are pre-planned or are, at least, reasonably predictable. Such tasks include ceremonial support, and planned assistance to the NZ Antarctic Programme, the NZ Police and other government departments. The frequency of other tasks, primarily of an emergency nature such as search and rescue, assistance to civil defence and fire fighting, are, obviously, less predictable. The NZDF maintains elements at specified degrees of notice (DON) for response to such emergencies.

The main NZDF elements that are to be available for emergency tasks, listed by Service, are shown in the following table:

Note 1 - EOD only as Improvised Explosive Device Disposal (IEDD) comes under Output Expense: Special Operations Forces.

Multi-Agency Operations and Tasks (MAO&T)

The term Multi-Agency Operations and Tasks (MAO&T) is used in many of the NZDF output performance tables contained in this document. The term is used within the relevant tables to draw a clear distinction between "general support" to the community and the more formal, pre-planned support to specific government departments and agencies, under the whole of government approach to, for example, protection of the New Zealand EEZ and border security.

MAO&T refers to the formal operational support and training for such operations and tasks that the NZDF (Navy, Army and Air Force) provides, and that are being developed, with other government departments and agencies - such as the Ministry of Fisheries, NZ Customs Service, NZ Police, Ministry of Foreign Affairs and Trade, Department of Conservation, Maritime New Zealand (MNZ), and related agencies. The Navy and Air Force, in particular, work closely, individually and/or collectively, with such agencies. The National Maritime Coordination Centre (NMCC), sponsored by the NZ Customs Service (host agency), coordinates the maritime-related MAO&T. The Government continues to emphasise the general direction and increased importance of the civilian/military requirements associated with the NZ EEZ and border control.

The NZDF continues to work closely with other government departments and agencies to plan formal arrangements for these requirements. Also, work is progressing on developing more robust measures to assess the quality of NZDF assistance on MAO&T. The reporting of MAO&T, such as in the NZDF Annual Report, will be, by exception, against the table below.

A list of indicative NZDF MAO&T, general support to the government and the community, and tasks in support of foreign and defence policy objectives are listed in the following table. The scale and frequency of such tasks, unless pre-programmed, are not forecast. However, a summary of actual support provided is required for reporting purposes, and will be included in the Annual Report of the NZDF.

List of indicative MAO&T and general support

Fixed Wing Transport Forces (M22)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $16.427 million to $244.441 million in 2010/11. This increase relates to the introduction into service of the upgraded C-130 Hercules aircraft.

Output Performance Measures and Standards

Land Combat Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $20.051 million to $405.762 million in 2010/11. This increase mainly relates to a redistribution of overhead costs based on asset values.

Output Performance Measures and Standards

Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Note 1 - Definitions of LTG and CATG:

• A LTG is designed to have a deployed strength of up to 260 personnel to conduct primarily humanitarian and disaster relief, and stability and support tasks. It can include combat, combat service support (CSS) and limited combat support (CS) elements. If manoeuvre based, it may be light infantry, motorised or composite. The LTG is supported by Information Operations (IO) and enhanced communications, intelligence and Geospatial Information Systems (GIS) capabilities. The LTG will be available for operations across Employment Contexts 1 to 5 (inclusive), however, it is designed primarily for the EC 1 and 2 environment. This task group is based around a single sub-unit sized element.
• A CATG allows for a scaleable group of up to 560 personnel providing a range of combined arms capabilities, including combat, combat support (CS) and combat service support (CSS); it may be light infantry, motorised, or composite based. The scale of the deployed force will be dependent on the amount of local, coalition or contractor resources available in theatre to support the force. In a worst case, the CATG must be largely self-sufficient for independent operations. The CATG is based around two or more sub-unit sized elements. The CATG will be available for operations across Employment Contexts 1 to 5 (inclusive). The task group is based around two or more sub-unit sized elements.

Note 2 - Not Applicable (N/A) is recorded against the LTG and the CATG for 2009/10 as these elements, especially in terms of size/strength, were not applicable to that period.

Land Combat Service Support Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Land Combat Support Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Maritime Patrol Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Military Hydrography, and Hydrographic Data Collection and Processing for LINZ (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Military Policy Development, Coordination and Advice (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $1.994 million to $16.334 in 2010/11. This increase is due mainly to a military intelligence initiative met from NZDF resource reprioritisation.

Output Performance Measures and Standards

Note 1 - Characteristics of "quality advice":

• Purpose. The aims of papers are clearly stated and answers the questions the Minister has raised.
• Logic. The assumptions behind the advice are explicit, the argument is logical and supported by facts.
• Accuracy. The facts in the paper are accurate and all material facts have been included.
• Options. An adequate range of options has been presented and each is assessed for benefits, costs and consequences to the government and the community.
• Consultation. Evidence of adequate consultation with interested parties and possible objections to proposals have been identified.
• Practicality. The format meets Cabinet Office requirement, the material is effectively and concisely summarised, has short sentences in plain English, and is free from spelling and grammatical errors.

Mine Countermeasures (MCM) and MCM Diving Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $1.637 million to $24.854 million for 2010/11. The decrease relates to the decommissioning of HMNZS KAHU and a change in the maintenance plan for HMNZS MANAWANUI.

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Miscellaneous Support Activities MCOA (M22)#

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Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

Outputs of a miscellaneous and disparate nature that do not individually justify separate Departmental Output Expense recognition have been grouped to provide for improved transparency and accountability.

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $3.805 million to $25.517 million in 2010/11.

The increase relates to:

• a decrease of $1.691 million in Support to Limited Service Volunteer Scheme due to a decision to transfer activities to a new Support to Youth Development appropriation
• an increase of $342,000 to $2.388 million in Support to Mutual Assistance Programme (MAP) input costs
• a decrease of $187,000 to $3.399 million in Support to Cadet Forces input costs
• a decrease of $1.037 million to $6.260 million in Support to Military Museums reflects a technical reallocation of the NZDF capital charge, and
• an increase of $6.378 million to $13.470 million for the Support to Youth Development appropriation as a result of a transfer from the Support to Limited Service Volunteer Scheme and new baseline funding.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Naval Combat Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Naval Helicopter Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note 1 - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Naval Patrol Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $25.256 million to $127.452 million in 2010/11. The increase reflects the reflects the introduction into service of the offshore patrol vessels for the Navy and to provide for enhanced Multi-Agency Operations and Tasks.

Output Performance Measures and Standards

Naval Support Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Operationally Deployed Forces Annual (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $17.180 million to $78.446 million for 2010/11. The decrease reflects the impact of both planned draw down and for some missions, that a commitment to continue has yet to be confirmed.

Output Performance Measures and Standards

Rotary Wing Transport Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Special Operations Forces (M22)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $4.137 million to $71.251 million in 2010/11. This increase relates to increased input costs for Special Operations Forces.

Output Performance Measures and Standards

Note - Details of the Key Performance Indicators (KPIs) that underlie the performance standards, the Performance Rating Scale, and Employment Contexts (ECs) are explained earlier in this part.

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

New Zealand Defence Force - Capital Expenditure PLA (M22)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Capital expenditure costs are unique according to year. This appropriation will recognise a $183.084 million increase over the final 2009/10 estimate, mainly as a result of payments made to the Ministry of Defence (MoD) for Specialist Military Equipment (SME) purchases.

Expected Results

Performance Information for Appropriations Vote Foreign Affairs and Trade#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Foreign Affairs (M34)

ADMINISTERING DEPARTMENT: Ministry of Foreign Affairs and Trade

MINISTER RESPONSIBLE FOR MINISTRY OF FOREIGN AFFAIRS AND TRADE: Minister of Foreign Affairs

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Foreign Affairs is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

• a total of nearly $358 million on purchasing services in the spheres of foreign affairs and trade from the Ministry of Foreign Affairs and Trade
• a total of over $13 million on purchasing Antarctic research and support from the New Zealand Antarctic Institute
• a total of $4 million to the Asia New Zealand Foundation for the promotion of Asian skills and relationships
• a total of over $1 million to the Pacific Cooperation Foundation for the promotion of mutual understanding and constructive linkages between New Zealanders and other countries and people of the Pacific
• a total of nearly $57 million on subscriptions to international organisations
• a total of over $1 million on payments in accordance with the Diplomatic Privileges and Immunities Act 1968
• a total of over $66 million on departmental capital expenditure.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Vote Foreign Affairs and Trade provides the Government with policy advice, advocacy, representation and other services directed at managing, advancing and protecting New Zealand's foreign affairs and trade interests in its relations with other countries and groups of countries and in its membership of international institutions. The Vote contributes in key ways to the achievement of the Government's driving goal to grow the economy in order to deliver greater prosperity, security and opportunities to all New Zealanders.

Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

Significant changes in departmental and non-departmental appropriations in Vote Foreign Affairs and Trade are discussed briefly below.

Trends in total voted and actual expenses and capital expenditure

Source: MFAT

The table of departmental and non-departmental flows reflects the impact of periodic property revaluations; and one-off capital contributions. The underlying trend, however, is an overall increase in the amount appropriated for outputs and other expenses mainly reflecting capability funding, higher property values, the introduction of tax on overseas terms and conditions of service in 2006/07 and approved new initiatives.

Departmental Output Expenses

Departmental OutputExpenses

Source: MFAT

The key changes from 2005/06 to 2010/11 are as follows:

• Funding Increases: total $111.092 million mainly for additional resources to deepen the Ministry's capability and capacity through additional staff, increases in support infrastructure and cost increases ($91.030 million), a new post in Cairo in 2005/06 ($2.785 million), a new post in Dili in 2006/07 ($1.963 million), a new post in Warsaw ($663,000) in 2004/05, and implementing security enhancements to ensure staff and their families and property are safe, secure and protected ($5.620 million).
• Fiscally Neutral Changes: the main changes since 2005/06 include: decrease in foreign exchange rate movements ($1.018 million), decrease arising from the rate of capital charge lowered from 8.0% to 7.5% ($1.683 million), higher capital charge and depreciation following revaluation of properties ($7.896 million), higher capital charge arising from retention of surplus on unrealised derivative gain ($752,000), increase arising from the introduction of tax on overseas terms and conditions ($32.676 million) in 2006/07 and transfer of chanceries and residences back to the Ministry from the Treasury in 2005/06 ($8.009 million).

Performance Improvement Actions

There are two Performance Improvement Actions for this Vote. They are:

1. Offshore Review

During 2009/10 the Ministry of Foreign Affairs and Trade led a Review of NZ Inc's Offshore Network. The Review was conducted on the basis that any changes proposed should be fiscally neutral and within the overall funding available to NZ Inc for offshore representation and activities for the forecast period. The proposed changes impacting on Vote Foreign Affairs and Trade are reflected in the New Policy Initiatives table and are fiscally neutral. They comprise both reallocations of resources to take advantage of any new trade and economic opportunities and improvements to the way that NZ Inc works onshore and offshore. Any significant adjustments to New Zealand's representation at specific locations will be announced by the Government in due course once partner governments have been informed.

During 2010/11 a detailed plan to implement the decisions on the Review will be developed and started, and benchmarks established for measuring improved performance and service delivery over time.

2. Organisational Transformation

The Ministry of Foreign Affairs and Trade is undertaking a comprehensive organisational change programme, covering strategy, performance measures, people, technology and knowledge management, culture and values and structure. This programme affects both the organisation's votes and its results are expected to be medium term in nature. It is therefore covered in detail in the Ministry's SOI.

Non-Departmental Other Expenses

Non-Departmental Other Expenses

Source: MFAT

Non-departmental other expenses have increased by $19.943 million from 2005/06 to 2010/11. The key changes have been:

• The cost of New Zealand's membership to international organisations has increased by $22.470 million, from $34.198 million in 2005/06 to $56.668 million in 2010/11. This increase mainly reflects higher assessed contributions to UN peacekeeping activities, partially offset by exchange rate movements.
• A decrease of $2 million arising from a one-off funding payment in 2005/06 to victims of Hurricane Katrina.

Departmental Capital Expenditure

Departmental Capital Expenditure

Source: MFAT

• In 2005/06 the Ministry received $2.834 million for the establishment of a new post in Cairo, Egypt, $2.751 million for capital expenditure in chanceries and residences previously rented from Treasury, $2.379 million to fit-out new chanceries in Los Angeles and Shanghai, $1.993 million to design and implement a global Emergency Response and Consular Management Information System and $10.023 million to implement the capital recommendations of security assessments of New Zealand Government owned and leased properties offshore driven by security and safety needs.
• In 2006/07 the Ministry received $3.429 million to upgrade the New Zealand Consulate-General in Dili to an Embassy, $7 million first tranche for capital expenditure to construct chanceries in Ankara, Honiara and Suva and establish a lower classified Local Area Network (LAN) alongside the Ministry's current single Confidential LAN, and $1 million for capital expenditure to implement the capital plan in chanceries and residences previously rented from Treasury.
• In 2007/08 the Ministry received $750,000 for Apia Chancery agency accommodation, a further $3.169 million to upgrade the New Zealand Embassy in Dili, $14.550 million second tranche for capital expenditure to construct chanceries in Ankara, Honiara and Suva and establish a lower classified Local Area Network (LAN) alongside the Ministry's current single Confidential LAN, and $1 million for capital expenditure to implement the capital plan in chanceries and residences previously rented from Treasury.
• Refer to Part 6.1 for details of the capital expenditure the Ministry will receive in 2010/11.

Non-Departmental Capital Expenditure

Non-DepartmentalCapital Expenditure

Source: MFAT

• The New Zealand Antarctic Institute received $1.500 million in 2006/07, $2.400 million in 2007/08, $800,000 in 2008/09 and $300,000 in 2009/10 to maintain the Scott Base buildings and services infrastructure.

Crown Revenue and Receipts Trends

Crown Revenue and Receipts Trends

Source: MFAT

• In 2007/08 the Ministry received a refund of $1.466 million for fringe benefit tax overpaid in a previous financial year.
• The decrease in Crown revenue and receipts reflects a reduction in the number and value of payments Tokelau is asking the Ministry to process on its behalf.

Analysis by Appropriation Type: 2010/11 and 2009/10 Compared

Departmental output expenses

Annual appropriations are expected to increase by $9.144 million (2.6%) in 2010/11 relative to 2009/10. The increase is mainly attributable to an increase in baseline resources to deepen the Ministry's capacity through additional staff, increases in support infrastructure and increases in contributions to various funds ($8.977 million), lower overseas costs caused by the depreciation of the New Zealand dollar ($7.595 million), increases arising from the FEALAC Science and Technology Working Group ($188,000), one-off contribution to global alliance on agriculture greenhouse gas mitigation research ($3.500 million), one-off contribution to the Rugby World Cup 20111 Office ($2.300 million), one-off contribution to the Global Environment Facility ($500,000), one-off transfer to Vote State Services to fund the Identity Verification Service ($593,000) and a decrease by $157,000 for market access forestry.

Non-departmental other expenses

Annual appropriations are expected to increase by $2.700 million (17.0%) in 2010/11 relative to 2009/10. New Zealand Antarctic Institute funding has increased by $750,000 for the International Trans-Antarctic Scientific Experiment partly offset by a decrease of $50,000 for vacating the Chair of the Antarctic Treaty's Committee for Environmental Protection. Asia New Zealand Foundation's baseline funding has increased by $2 million to restore funding to previous levels.

Non-departmental other expenses

The annual appropriation is expected to increase by $5.400 million (10.5%) in 2010/11 relative to 2009/10 reflecting increased payments for Subscriptions to International Organisations due to increases in payments to the United Nations for its regular budget assessment and for UN peacekeeping missions mandated by the Security Council.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Administration of Diplomatic Privileges and Immunities (M34)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $1.512 million to $1.971 million for 2010/11. The movement arises from:

• an increase by $18,000 from a funding package for response to foreign and trade policy changes
• a decrease by $3,000 as a result of decisions arising from the baseline review
• an increase by $1.522 million from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off transfer of $2,000 in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• a decrease by $3,000 from a review of NZ Inc's Offshore Network
• a decrease by $30,000 from a Capability Review to support organisational change and Government priorities.

Output Performance Measures and Standards

Note 1 - This measure of quantity is demand driven.

Note 2 - This measure could be considered to be demand driven. Estimates for the 2009/10 financial year are based on the assumption that the quantity of advice will be relatively constant in the absence of reliable trend information to the contrary.

Note 3 - A detailed assessment tool for analysis and advice is yet to be fully developed. The percentage target is therefore nominal. The measure may need to be updated in supplementary information if it is not possible to develop an assessment model that produces a measure of this nature. Because the target is not based on an understanding of past performance or the performance of other entities against the same tool, it is not possible to provide an estimated actual standard for the 2009/10 financial year that is not potentially misleading.

Note 4 - The Ministry has lowered its standards for timeliness on these outputs, because we have judged that setting a 100% standard creates a perverse incentive to prioritise timeliness over other qualities, such as quality, or efficiency of service. There is also the potential for a 100% target to distort reporting, because any single failure represents a failure to achieve the target for the year.

Note 5 - The information on Ministerial services provided here is not disaggregated by output expense class. This performance information is not therefore repeated in each output expense class. Ministerial services can be provided under any of the Ministry's output expense classes. These quantity measures are demand driven. Quantity estimates are based on analysis of year to date information, and available trend data. Trends for Ministerial correspondence and Official Information Act requests are relatively stable. Parliamentary questions, however, fluctuate significantly from year to year. This results in the very large range provided.

Note 6 - Twenty working days is the statutory deadline for responding to requests for information under the Official Information Act. Requests can, however, be extended under Section 15A of the Act "for a reasonable period of time having regard to the circumstances". The 40 working day deadline (twice the statutory deadline) is an attempt to represent the potential for extensions to be notified.

Quality standard for analysis and advice

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Consular Services (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $7.298 million to $24.114 million for 2010/11. The movement arises from:

• an increase by $1.173 million from a funding package for response for foreign and trade policy changes
• a decrease by $951,000 as a result of decisions arising from the baseline review
• a decrease by $191,000 from foreign exchange and overseas inflation
• an increase by $7.850 million from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off transfer of $103,000 in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• a decrease by $651,000 from a review of NZ Inc's Offshore Network
• a decrease by $35,000 from a Capability Review to support organisational change and Government priorities.

Output Performance Measures and Standards

Note 1 - These quantity measures are demand driven. Because we do not hold a single long-term data set for consular services, the number of consular cases is difficult to forecast accurately. For notarial services and general consular advice, there is significant annual variance and no clear trend.

Note 2 - This measure could be considered to be demand driven. Estimates for the 2009/10 financial year are based on the assumption that the quantity of advice will be relatively constant in the absence of reliable trend information to the contrary.

Note 3 - It is not possible to provide an estimated actual standard of performance for the current calendar year, because no similar or comparable measure has been taken. The SSC's Common Measurement Tool allows for comparisons to be made across departments on responses to a set of 8 standard questions that can be applied to the performance of any government service. The target represents a service level the Ministry hopes it is already meeting.

Note 4 - The Ministry does not currently collect data on the timelines for incorporating lessons learned into emergency management procedures. It is not therefore possible to provide an estimate that is not potentially misleading.

Current and Past Policy Initiatives

Pacific Security Fund (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $8,000 to $3.240 million for 2010/11. This movement arises from :

• a decrease by $29,000 from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off transfer of $9,000 in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• a one-off decrease of $19,000 in 2009/10 from a review of NZ Inc's Offshore Network
• a decrease by $7,000 from a Capability Review to support organisational change and Government priorities.

Output Performance Measures and Standards

Note - The Ministry has maintained these measures for the 2010/11 financial year. Development of a more robust measurement methodology will be part of ongoing efforts to further develop the Ministry's performance measures.

Current and Past Policy Initiatives

Policy Advice and Representation - International Institutions (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will increase by $10.394 million to $65.258 million for 2010/11. This movement arises from:

• an increase by $3.623 million from a funding package for response to foreign trade and policy changes
• a decrease by $1.005 million as a result of decisions arising from the baseline review
• a decrease by $857,000 from foreign exchange and overseas inflation movements
• an increase by $7.327 million from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off transfer of $500,000 in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• an increase by $1.063 million from a review of NZ Inc's Offshore Network
• a decrease by $257,000 from a Capability Review to support organisational change and Government priorities.

Output Performance Measures and Standards

Note 1 - As recorded in the Ministry's international treaties list. This list includes international agreements led by the Ministry as well as agreements led by other agencies. The Ministry is engaged in all these treaties at some point but the amount of work entailed varies from large multi-party agreements where the Ministry is the lead negotiator, to small-scale arrangements led by other departments. The figure also excludes the Ministry's ongoing involvement in the functioning of and decision-making in already established international organisations.

Note 2 - This measure could be considered to be demand driven. Estimates for the 2009/10 financial year are based on the assumption that the quantity of advice will be relatively constant in the absence of reliable trend information to the contrary.

Note 3 - The assessment tool will be a survey of peers from other government departments involved in negotiation of international agreements with the Ministry. The survey has yet to be designed in detail and therefore the percentage target is nominal. The measure may need to be updated in supplementary information if it is not possible to develop an assessment model that produces a measure of this nature. Because the target is not based on an understanding of past performance or the performance of other entities against the same tool, it is not possible to provide an estimated actual standard for the 2009/10 financial year that is not potentially misleading. The quality standard is set out below.

Quality Standard for Negotiation

Current and Past Policy Initiatives

Policy Advice and Representation - Other Countries (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $9.368 million to $248.926 million for 2010/11. This movement arises from:

• an increase by $17,000 for Dili upgrading to Embassy status
• an increase by $17.406 million from a funding package for response to foreign and trade policy changes
• a one-off transfer of $593,000 in 2009/10 to Vote State Services to fund the Identity Verification Service
• a decrease by $11.322 million as a result of decisions arising from the baseline review
• a one-off decrease of $500,000 in 2009/10 for the Ministry's contribution to the Global Environment Fund
• a one-off increase of $157,000 in 2009/10 for Market Access Forestry
• an increase by $19,000 from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• an increase by $1.077 million from resources for WTO, CEPs/FTAs
• a decrease by $6.158 million from foreign exchange and overseas inflation movements
• a decrease by $93,000 arising from a transfer to Vote Communication Security for the GCSB New Zealand Intelligence Community Network Enhancement (NZICNet) project
• an increase by $188,000 arising from the FELAC Science and Technology working group
• a decrease by $16.439 million from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off decrease of $3.500 million in 2009/10 for the global alliance on agricultural greenhouse gas mitigation research
• a one-off transfer of $1.683 million in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• a decrease by $441,000 from a review of NZ Inc's Offshore Network
• an increase by $329,000 from a Capability Review to support organisational change and Government priorities
• a decrease by $70,000 to establish and fund the NZ Productivity Commission.

Output Performance Measures and Standards

Note 1 - As recorded in the Ministry's international treaties list. This list includes international agreements led by the Ministry as well as agreements led by other agencies. The Ministry is engaged in all these treaties at some point but the amount of work entailed varies from large multi-party agreements where the Ministry is the lead negotiator, to small-scale arrangements led by other departments. The figure of 51 excludes 30 Double Taxation Agreements led by the Internal Revenue Department as these have the potential to distort the data in an area where the Ministry's involvement is light.

Note 2 - As recorded in the Ministry's inwards visits list. This list covers only major visits to New Zealand. It does not distinguish between visits for which Executive Government Support in the Department of Internal Affairs manages logistics and planning, and those supported wholly by the Ministry.

Note 3 - Includes travel supported by the Ministry of the Minister of Foreign Affairs and Trade, Minister of Trade and Prime Minister only. The Ministry also supports travel by other Ministers. This number represents trips taken, not countries visited. It counts visits by multiple Ministers separately (eg, travel by all three Ministers to APEC meetings in November 2009 is counted as three visits).

Note 4 - This measure could be considered to be demand driven. Estimates for the 2009/10 financial year are based on the assumption that the quantity of advice will be relatively constant in the absence of reliable trend information to the contrary.

Note 5 - The assessment tool will be a desktop review of a sample of visits managed by the Ministry. The measurement tool for the review is yet to be designed in detail and therefore the percentage target is nominal. The measure may need to be updated in supplementary information if it is not possible to develop an assessment model that produces a measure of this nature. Because the target is not based on an understanding of past performance or the performance of other entities against the same tool, it is not possible to provide an estimated actual standard for the 2009/10 financial year that is not potentially misleading. The quality standard is set out below.

Quality standard for visits management

Current and Past Policy Initiatives

Policy Advice and Representation - Other Countries PLA (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $22,000 to $21,000 for 2010/11. This decrease is the result of a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Promotional Activities - Other Countries (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $180,000 to $500,000 for 2010/11. The movement arises from:

• an increase by $20,000 from a funding package for responses to foreign and trade policy changes
• a decrease by $1,000 as a result of decisions arising from the baseline review
• a decrease by $209,000 from a new structure for capturing direction of effort data and aligning this to departmental output expense appropriations
• a one-off transfer of $3,000 in 2009/10 to the Ministry of Economic Development for the Rugby World Cup 2011 Office
• an increase by $7,000 from a review of NZ Inc's Offshore Network

Output Performance Measures and Standards

Note - The Ministry has maintained these measures for the 2010/11 financial year. Development of a more robust measurement methodology will be part of ongoing efforts to further develop the Ministry's performance measures.

Current and Past Policy Initiatives

Services for Other New Zealand Agencies Overseas (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation will decrease by $482,000 to $13.599 million for 2010/11. This movement arises from:

• a decrease by $389,000 from foreign exchange and overseas inflation movements
• a decrease by $93,000 in the level of services purchased by other departments and agencies

Output Performance Measures and Standards

Note 1 - Other government agencies co-located at Ministry posts offshore are New Zealand Trade and Enterprise, the New Zealand Defence Force, Immigration New Zealand, Tourism New Zealand, Customs, Police, the Ministry of Education, the Ministry of Research, Science and Technology, the Ministry of Agriculture and Forestry, and Treasury.

Note 2 - The Ministry provides services directly for the Department of Internal Affairs, and for Immigration New Zealand.

Note 3 - The assessment tool will be a survey of partners who receive services from the Ministry. The survey has yet to be designed in detail and therefore the percentage target is nominal. The measure may need to be updated in supplementary information if it is not possible to develop an assessment model that produces a measure of this nature. Because the target is not based on an understanding of past performance or the performance of other entities against the same tool, it is not possible to provide an estimated actual standard for the 2009/10 financial year that is not potentially misleading.

Conditions on Use of Appropriation

Part 2.2 - Non-Departmental Output Expenses#

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Intended Impacts, Outcomes and Objectives

Antarctic Research and Support (M34)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will increase by $700,000 to $13.168 million for 2010/11. This movement arises from:

• a decrease of $50,000 for administrative support for Antarctica New Zealand's candidate vacating the Chair of the Antarctic Treaty's Committee for Environmental Protection
• an increase of $750,000 from an expense transfer to fund the International Trans-Antarctic Scientific Experiment (ITASE).

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Pacific Cooperation Foundation (M34)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Promotion of Asian Skills and Relationships (M34)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will increase by $2 million to $4 million for 2010/11. This movement arises from an increase in baseline funding for the Foundation.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Summary of Service Providers for Non-Departmental Outputs#

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The above table summarises funding to be allocated through Vote Foreign Affairs and Trade to non-departmental providers, along with an indication of the mechanism to be used for reporting actual performance and (where determined) the length of the funding commitment.

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Disbursements Made and Exemptions from Taxation PLA (M34)

Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Subscriptions to International Organisations (M34)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation will increase by $5.400 million to $56.688 million for 2010/11. This movement arises from increased payments for Subscriptions to International Organisations due to increases in payments to the United Nations for its regular budget assessment and for UN peacekeeping missions mandated by the Security Council.

Current and Past Policy Initiatives

Reporting Mechanisms#

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The above table indicates the mechanisms to be used for reporting actual performance for each non-departmental other expenses appropriation.

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Ministry of Foreign Affairs and Trade - Capital Expenditure PLA (M34)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

This appropriation will increase by $33.639 million to $66.098 million for 2010/11. Capital spending has been re-phased to future years due to delays in starting, progressing and completing various capital projects.

Performance Information for Appropriations Vote Official Development Assistance#

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Foreign Affairs (M34)

ADMINISTERING DEPARTMENT: Ministry of Foreign Affairs and Trade

MINISTER RESPONSIBLE FOR MINISTRY OF FOREIGN AFFAIRS AND TRADE: Minister of Foreign Affairs

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Foreign Affairs is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

• A total of nearly $30 million for Management of the Official Development Assistance (ODA) Programme.
• A total of nearly $10 million for Strategic Advice and Evaluation.
• A total of $97 million for contributions to international organisations.
• A total of nearly $33 million for contributions to non-government organisations.
• A total of over $103 million from the multi-year appropriation for Global Development Assistance.
• A total of nearly $252 million from the multi-year appropriation for Pacific Development Assistance.

Details of these appropriations are set out in Parts 2-6 below.

Part 1.2 - High-Level Objectives of the Vote#

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Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

Significant changes in departmental and non-departmental appropriations in Vote ODA are discussed briefly below:

Trends in total voted and actual expenses

Source: MFAT

Total Vote expenses have increased from $347.908 million in 2005/06 to $524.530 million in 2010/11, an increase of $176.622 million. This is due to an increase of $160.412 million for Official Development Assistance programmes and an additional $16.210 million departmental output expense for managing the increased programmes.

Departmental Output Expenses

Departmental Output Expenses

Source: Ministry of Foreign Affairs and Trade

Output expenses have increased from $23.353 million in 2005/2006 to $39.563 million in 2010/11 providing additional capability to effectively manage the increased level of Official Development Assistance during this period. The rate of increase has now slowed with the expectation of reducing departmental output expenses as a percentage of ODA expenditure.

Performance Improvement Actions

The Ministry of Foreign Affairs and Trade's Performance Improvement Actions relevant to this Vote are aimed at improving the value for money and effectiveness of ODA. They are:

Short Term Deliverables:

• Line by line review of departmental costs to verify the cost effectiveness of ODA delivery.
• Opportunities identified to improve cost-effectiveness in planning, monitoring and evaluation.
• Progressive shift in the ratio of ODA going from small, administratively expensive aid projects to larger, higher impact, more comprehensive initiatives.
• Securing the services of sufficient suitably qualified staff and consultants with commercial management capabilities to manage the increasing number of aid activities requiring such expertise.

Medium Term Impact Measures:

• The percentage of ODA required to administer aid activities reduces by at least 12% between 2009/10 and 2012/13 (a saving of at least $6 million per annum from 2012/13).
• ODA activities show year on year increases in median size and year on year decreases in the number of activities managed.

Progress to date:

• The number of activities managed through ODA has reduced by 9% from more than 854 in 2007/08 to around 776 in 2009/10 and the median size of activities has increased marginally over the same period by 18% from $114,000 to $135,000.
• MFAT is in the first of a four year programme to reduce the percentage of ODA required to administer aid activities by 12%. To date, MFAT has achieved a reduction of 3%.
• The reintegration of NZAID into the Ministry has seen a reduction in 'back office' corporate support costs for the International Development Group of the Ministry of around 23% on a budget of $2.04 million.
• A line by line review of departmental costs will take place before 30 June 2010.
• Options are currently being developed to grow commercial and economic development expertise within the International Development Group of the Ministry.

Non-Departmental Other Expenses to be Incurred by the Crown

Non-Departmental Other Expenses to be Incurred by the Crown

Source: Ministry of Foreign Affairs and Trade

The appropriations for other expenses consist of two multi-year appropriations and two annual appropriations. While both appropriation types have increased over recent years, the multi-year appropriations received greater increases as New Zealand increased Vote ODA progressively to achieve previously agreed ODA: GNI targets. From 2009/10 budget increases for Vote ODA are based on performance and delivery of outcomes, rather than ODA: GNI targets.

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

For further information on the intended impacts, outcomes and objectives of the departmental output expense appropriations, please see Part 5.2 "Non-Departmental Other Expenses"; and the Statement of Intent for the Ministry of Foreign Affairs and Trade.

Management of Official Development Assistance Programme (M34)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation increase of $552,000 is due to the reprioritisation of capability and the appointment of a development advisor in Afghanistan.

Output Performance Measures and Standards

Note 1 - The quality standard for programme management (set out below) is new and is expected to undergo revision. It is not possible to provide an estimated actual standard of performance for the current year, because no similar or comparable measure has been taken. The target represents a service level the Ministry hopes it is already meeting.

Note 2 - The New Zealand aid programme received a new mandate in 2009 requiring a change of focus to sectors directly supporting sustainable economic development. The Ministry's ability to identify and manage new, effective and efficient ODA activities in these sectors is a significant indicator of the quality of this departmental output. From calendar year 2008 to 2009 the percentage increased from 24% to 29%.

Note 3 - A key threat to the effectiveness of ODA has been identified as "fragmentation" of the programme into a large number of small activities. The Ministry's ability to identify and manage a smaller number of larger activities is a key indicator of the quality of this departmental output. One of the Ministry's Performance Improvement Actions is to pursue a progressive shift in the ratio of ODA going from small, administratively expensive aid projects to larger, higher impact, more comprehensive initiatives.

Note 4 - Research internationally has shown that aid is most effective and has sustainable benefits when it can be delivered through long-term commitments to partner country programmes and priorities, using partner systems and priorities whenever possible. For example, research by the United Kingdom Department for International Development, and available on its website, has shown value for money improves by 20% when such approaches are used. Such approaches are described in MFAT as "high order aid modalities". A number of related indicators are specified in the Paris Declaration on Aid Effectiveness, to which all OECD donors and many other countries and institutions are committed. The Ministry's ability to manage ODA in accordance with this internationally agreed best practice is a key indicator of the quality of this departmental output. The Ministry is a world leader in systematically tracking these indicators, but data quality remains variable and for the first few years this indicator is used results should be used with caution. While the budget standard given above is for "progress" for the sake of space, a more detailed set of quantitative targets is provided in the Paris Declaration itself. These more detailed targets are used as the basis of reporting. For example, there is a target for the use of "programme-based approaches" to reach 66% of expenditure of bilateral aid to the public sector aid; and for use of partner financial and procurement systems to increase to around 80% (exact targets depending on the 2005 baseline).

Quality standard for programme management - programme level

Quality standard for programme management - activity level

Current and Past Policy Initiatives

Strategic Evaluation and Advice (M34)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation increase of $316,000 is due to the appointment of a development advisor in Afghanistan and additional funding to monitor the increasing size of development assistance programmes arising from increased ODA.

Output Performance Measures and Standards

Note 1 - Each of the 30-33 ODA programmes administered by the Ministry is governed by a strategic framework e.g. the "Samoa Country Strategy". Keeping these strategic frameworks up to date, reflecting New Zealand government policy and partner priorities is important for achieving development results and is an indicator of the quality of the Ministry's strategic evaluation and advice on the aid programme. The Ministry's 2008/09 Annual Report noted that 7 out of 33 programmes were overdue for new strategies and that the issue was being addressed urgently.

Note 2 - An important component of the Ministry's strategic evaluation and advice on ODA is the commissioning and management of reviews and evaluations of individual ODA activities and of thematic or sectoral issues. The results of these reviews and evaluations are used to improve programme management, and also inform the MFAT Annual Report. The Ministry's evaluation strategy includes intentions to increase the focus on monitoring while decreasing the number of reviews. The number of evaluations is expected to stay relatively static. Hence the number of reviews and evaluations, while a good indicator of the quantity of output, is not necessarily a "more is better" situation. Reviews and evaluations are available from the NZAID website.

Note 3 - A detailed assessment tool for policy advice is yet to be fully developed. The percentage target is therefore nominal. The measure may need to be updated in supplementary information if it is not possible to develop an assessment model that produces a measure of this nature. Because the target is not based on an understanding of past performance or the performance of other entities against the same tool, it is not possible to provide an estimated actual standard for the 2009/10 financial year that is not potentially misleading.

Note 4 - This indicator refers to the quality of the reviews and evaluations, commissioned by MFAT, of NZAID programmes and activities. Most reviews and evaluations are at the activity (eg project) level. Monitoring, review and evaluation of NZAID activities are vital sources of the information on contribution to outcomes and value for money in the Ministry's Annual Report. They are also essential for identifying and learning lessons and improving effectiveness and efficiency. Because of this, the quality of the Ministry's evaluation processes is an important indicator of the quality of the Ministry's overall management of ODA and is carefully monitored. Since careful, rigourous monitoring began it has become clear that the eventual target of 100% compliance with good practice standards for evaluations is not realistic in the short term; hence the 2010/11 target has been reduced to seventy percent, already a significant improvement from estimated current quality. The quality of reviews and evaluations improved in 2008 compared with previous years. Forty-one percent of the 2008 evaluations and reviews were assessed as "satisfactory or good in all or many respects" compared with 22 percent in 2007. The figure provided for 2009/10 in the table above is only a rough estimate.

Note 5 - Quantity measures for Ministerial services are demand driven.

Note 6 - In 2008/09 it was discovered that less than half of replies to Ministerial correspondence were delivered to the Minister's office within the 10 working day deadline, with the median late period eight days. The issue is receiving management attention, and this indicator has been selected as a suitable proxy of overall timeliness of Ministerial services.

Quality standard for analysis and advice

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

The impacts and outcome of these appropriations are measured by the Ministry of Foreign Affairs and Trade (MFAT) using a performance reporting framework that assists in the management of Official Development Assistance (ODA). The four appropriations are managed through 30-32 programmes (such as the Samoa programme, the Pacific Growth programme, or the multilateral agencies programme), each of which has a strategic framework that specifies appropriate objectives and development outcomes. Progress towards these programme objectives and the contribution of New Zealand's ODA is monitored and rated annually, with results printed in the MFAT Annual Report.

Each of the programmes consists of a number of ODA activities, of which there are around 780 in total. Each of these activities has its own objectives and monitoring and evaluation arrangements. There are extensive reporting obligations for MFAT's implementing partners and a requirement that MFAT regularly assess progress and quality of the activities it administers. Results, including from MFAT's reviews and evaluations of activities, are reported in aggregate in the MFAT Annual Report.

The Annual Report provides information against the following indicators of contribution to outcomes:

• Progress towards economic and human development targets for key partner countries.
• Progress towards the internationally-agreed Millennium Development Goals for key partners.
• Progress towards outcomes identified in programme strategies, including the percentage of objectives rated excellent, good, adequate and unsatisfactory; and representative examples of objectives with each rati