Finance and Government Administration 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#

Print this section

Introduction#

Print this section

• 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#

Print this section

• Ministerial Statements of Responsibility
• Speaker's Statement of Responsibility
• Chief Executive Statements of Responsibility

Performance Information for Appropriations in Each Vote#

Print this section

• Vote Audit
• Vote Communications Security and Intelligence
• Vote Finance
• Vote Ministerial Services
• Vote Office of the Clerk
• Vote Ombudsmen
• Vote Parliamentary Service
• Vote Prime Minister and Cabinet
• Vote Revenue
• Vote Security Intelligence
• Vote State-Owned Enterprises
• Vote State Services

Statements of Forecast Service Performance of Departments#

Print this section

Forecast Financial Statements of Departments#

Print this section

• Statement of Common Accounting Policies
• Controller and Auditor-General
• Office of the Clerk of the House of Representatives
• Inland Revenue Department
• Office of the Ombudsmen
• Parliamentary Service
• Department of the Prime Minister and Cabinet
• State Services Commission
• The Treasury

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

Print this section

• Controller and Auditor-General
• Office of the Clerk of the House of Representatives
• Inland Revenue Department
• Office of the Ombudsmen
• Parliamentary Service
• Department of the Prime Minister and Cabinet
• State Services Commission
• The Treasury

Votes and Departments in Each Sector#

Print this section

Purpose and Nature of Appropriations#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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#

Print this section

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

Useful Links#

Print this section

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#

Print this section

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 Finance and Government Administration 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.

Speaker's Statement of Responsibility#

Print this section

I am satisfied that the information on future operating intentions provided by the Office of the Clerk of the House of Representatives, and Parliamentary Service and included in the Information Supporting the Estimates for the Finance and Government Administration Sector is in accordance with sections 38 and 41 of the Public Finance Act 1989 and is consistent with my requirements and performance expectations as Responsible Minister for the Office and the Service.

Chief Executive Statements of Responsibility#

Print this section

Department of the Prime Minister and Cabinet

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Department of the Prime Minister and Cabinet and for the Vote for which the Department of the Prime Minister and Cabinet is the administering department. Specifically, this information is contained in the Department of the Prime Minister and Cabinet'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.

The Treasury

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Treasury and for the Votes for which the Treasury is the administering department. Specifically, this information is contained in the Treasury'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.

State Services Commission

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the State Services Commission and for the Vote for which the State Services Commission is the administering department. Specifically, this information is contained in the State Services Commission'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.

Inland Revenue Department

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Inland Revenue Department and for the Vote for which the Inland Revenue Department is the administering department. Specifically, this information is contained in the Inland Revenue Department'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.

Chief Executive Statements of Responsibility (continued)#

Print this section

Office of the Clerk of the House of Representatives

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Office of the Clerk of the House of Representatives and for the Vote for which the Office of the Clerk of the House of Representatives is the administering department. Specifically, this information is contained in the Office of the Clerk of the House of Representatives'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.

Parliamentary Service

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Parliamentary Service and for the Vote for which the Parliamentary Service is the administering department. Specifically, this information is contained in the Parliamentary 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.

Chief Executive Statements of Responsibility (continued)#

Print this section

Controller and Auditor-General

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Controller and Auditor-General and for the Vote for which the Controller and Auditor-General is the administering department. Specifically, this information is contained in the Controller and Auditor-General'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.

Office of the Ombudsmen

In signing this statement, I acknowledge that I am responsible for the information contained in the Information Supporting the Estimates for the Finance and Government Administration Sector relating to the Office of the Ombudsmen and for the Vote for which the Office of the Ombudsmen is the administering department. Specifically, this information is contained in the Office of the Ombudsmen'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 Audit#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Speaker of the House of Representatives (M78)

ADMINISTERING DEPARTMENT: Controller and Auditor-General

MINISTER RESPONSIBLE FOR CONTROLLER AND AUDITOR-GENERAL: Speaker of the House of Representatives

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

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

• a total of $9.047 million for the Controller and Auditor-General supporting Parliament in its role of ensuring accountability for public resources, including advice to Select Committees and other bodies, undertaking the Controller function, plus undertaking and reporting on performance audits and inquiries relating to public entities
• a total of $61.855 million for providing audit services to public entities, and other audit-related assurance services.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Public entities are accountable to Parliament for their use of the public resources and powers that Parliament has conferred on them. Parliament has also legislated to require independent assurance that public entities are operating, and accounting for their performance, in accordance with Parliament's intentions.

The Public Audit Act 2001 provides for the Controller and Auditor-General (the Auditor-General) to examine and provide independent assurance to Parliament and the public on matters of authority, waste, probity, performance, and accountability and sets out her mandate and responsibilities.

The audit work carried out by the Auditor-General and the resulting assurance helps public entities to make improvements in their use of the resources and powers entrusted to them and in their accounting to Parliament and the public for their use of these.

The Auditor-General is an Officer of Parliament and is independent of executive Government and Parliament in discharging the functions of the statutory office, but is answerable to Parliament for her stewardship of the public resources entrusted to her. While the Speaker is the Vote Minister for the purposes of appropriations, the Speaker's role in relation to Offices of Parliament is not the same as that of Ministers of the Crown in relation to their departments.

The Speaker cannot contract with or direct the Auditor-General as to how she should discharge her statutory duties. Thus, the explanation of the appropriations for Vote Audit reflects the Auditor-General's perspective of the outputs that will be delivered to Parliament from Vote Audit. The appropriations in this Vote were commended to the Governor-General by the House of Representatives in an address on the recommendation of the Officers of Parliament Committee.

Objectives of the Vote

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Appropriation: Annual Audit and Assurance Services

The main purpose of an annual audit is to provide independent assurance about the fair presentation of the financial - and in many instances non-financial - information within annual reports. An audit involves a range of procedures, tests, and management and governance enquiries to support the Auditor-General's opinion.

In carrying out annual audits, auditors consider the legislative audit mandate, and recommendations for improvements in matters of authority, probity, performance, waste, and accountability may also be raised in our management letters to the governors and managers of public entities. Through annual audits, information and knowledge is gathered about public entities to assist the Auditor-General in advising Parliament and other stakeholders and in determining the performance audits and inquiries work that is carried out.

A foundation for trust in the public sector is that public entities respond to their statutory public reporting obligations and to findings resulting from audits. Public entities responses demonstrate their commitment to effective, efficient, and accountable service delivery. Therefore, the measures of intended impacts of the appropriation are that:

Note 1 - For comparative purposes, we have provided actual achievements against measures and standards for 2008/09 and 2007/08 as information is not yet available, in most instances, for 2009/10.

Note 2 - Service performance information and associated systems and controls was graded for the first time under our new framework as part of the 2008/09 audits or with audit work carried out in 2009/10.

Appropriation: Supporting Accountability to Parliament

Through annual audit, performance audit, and inquiry work, the Auditor-General has a broad overview of public entities both individually and throughout sectors. The Auditor-General supports Parliament in holding the executive to account for its use of public resources through:

• Parliamentary services - reporting to Parliament and others as appropriate on matters arising from annual and appropriation audits, reporting to and advising select committees, and advising other agencies on the requirements of Parliamentary and related accountability systems.
• The Controller function of the Auditor-General - providing independent assurance to Parliament that expenses and capital expenditure of departments and Offices of Parliament have been incurred for purposes that are lawful and within the scope, amount, and period of the appropriation or other authority. Through this output, the Auditor-General provides for the accountability of departments and Offices of Parliament for the use of funds appropriated to them within the authority granted by Parliament.

Effectiveness, efficiency, and accountability are foundations of trust in the public sector. Therefore, the intended impacts of the appropriation are that:

Appropriation: Performance Audits and Inquiries and Responsibilities under the Local Authorities (Members' Interests) Act 1968

The Public Audit Act 2001 provides the Auditor-General discretion to undertake performance audits and inquiries to examine matters concerning a public entity's use of resources, including:

• the extent to which activities are carried out effectively and efficiently
• compliance with statutory obligations
• any acts or omissions to determine whether waste has resulted or may result, and
• any act or omission showing or appearing to show a lack of probity or financial prudence by a public entity or its members, office holders, or employees.

The Auditor-General must also respond to requests for approvals in relation to pecuniary interest questions regulated by the Local Authorities (Members' Interests) Act 1968.

Performance audits, inquiries, and good practice guides allow the Auditor-General to consider and provide advice about issues of accountability, performance, waste, probity, and authority in greater depth than is appropriate within the statutory scope of an annual audit.

Effectively and efficiently performing public entities, that are accountable and operating within their authority and according to high ethical standards, are foundations for trust in the public sector. Therefore, the intended impacts of the appropriation are that:

Audit and Assurance Services RDA (M78)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

Forecasts for the 2010/11 financial year are for audit fees of $1.232 million less than 2009/10. This is the net effect of forecast fee increases and updated forecasts of percentage completion of audits across financial years.

Output Performance Measures and Standards

Audit and Assurance Services (M78)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Refer to the output performance measures and standards which apply to the main audit and assurance services output class.

Statutory Auditor Function MCOA (M78)#

Print this section

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

The basis for this multiclass output appropriation is the two output classes use the same resources and contribute to the same outcome.

Expenses and Revenue

Output Performance Measures and Standards

Note 3 - The nature, extent, and frequency of the quality assurance review is determined based on risk. The review is carried out during a three-year period.

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.1 - Departmental Other Expenses

Remuneration of Auditor-General and Deputy Auditor-General PLA (M78)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This appropriation was lower in 2009/10 due to the position of Auditor-General being vacant for part of the year.

Part 6 - Details and Expected Results for Capital Expenditure#

Print this section

Part 6.1 - Departmental Capital Expenditure

Controller and Auditor-General - Capital Expenditure PLA (M78)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Planned expenditure for 2010/11 includes additional expenditure on equipment and software, a reflection of the increased capital funding to maintain adequate equipment and technology.

Performance Information for Appropriations Vote Communications Security and Intelligence#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister Responsible for the Government Communications Security Bureau (M60)

ADMINISTERING DEPARTMENT: Government Communications Security Bureau

MINISTER RESPONSIBLE FOR GOVERNMENT COMMUNICATIONS SECURITY BUREAU: Prime Minister

Part 1 - Summary of the Vote

Part 1.3 - Trends in the Vote

Summary of Financial Activity

 

Performance Information for Appropriations Vote Finance#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Finance (M31), Minister for Infrastructure (M80), Minister for Regulatory Reform (M81)

ADMINISTERING DEPARTMENT: The Treasury

MINISTER RESPONSIBLE FOR THE TREASURY: Minister of Finance

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister of Finance is responsible for appropriations in Vote Finance for the 2010/11 financial year which covers the following:

• Nearly $29 million for policy advice on lifting New Zealand's overall economic performance and state sector performance.
• Nearly $15 million for macroeconomic policy and management which includes advice on fiscal policy and strategy; fiscal management, macroeconomic, tax and fiscal forecasting and fiscal reporting.
• Over $3,066 million for the payment of interest and other costs relating to the Crown's debt.
• Over $778 million for superannuation costs.
• $71 million for a capital payment to the Asian Development Bank.
• Over $17 million for capital investment in Landcorp Farming Limited.
• Over $17 million for New Zealand House, London costs.
• Over $2 million for the establishment of the New Zealand Productivity Commission.
• Nearly $12 million for the Crowns guarantees and indemnities.
• Nearly $2 million for Taitokerau Forests Limited.
• Over $1 million for Treasury capital expenditure.
• Over $3 million for unclaimed money and various Crown liabilities.

The Minister of Finance is also responsible for Crown revenue and receipts in the Vote for the 2010/11 financial year, which covers the following:

• A forecast of over $3,219 million in non-tax revenue.
• A forecast of $746,000 in capital receipts.

The Minister for Infrastructure is responsible for one appropriation in Vote Finance for the 2010/11 financial year which covers the following:

• Almost $5 million for policy advice and co-ordination of the Government's infrastructure activities.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Government Priorities and Outcomes - Links to Appropriations

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

The movements in departmental and non-departmental appropriations in Vote Finance, which are detailed in the Summary of Financial Activity table above, are largely due to movements in capital expenditure and movements in the Debt Servicing costs.

Details of significant movements within each appropriation category are shown below.

Departmental Output Expenses

Baselines decrease by nearly $1 million in 2010/11 in comparison to the previous year due to the following:

• One-off funding of $1.500 million approved for the first stage of the Better Administrative and Support Services (BASS) programme was approved in 2009/10. There is no approved funding for this project for 2010/11.
• There is a decrease of new funding for New Zealand Export Credit Office facility size extensions of $400,000 between years.
• The decreases above are partially offset by an increase of $1.200 million for the Establishment of the New Zealand Productivity Commission in 2010/11.

Non-Departmental Output Expenses

This appropriation category has increased slightly due primarily to the costs of the New Zealand Productivity Commission offset by the finishing of the Regulatory Responsibility Taskforce in September 2009.

Non-Departmental Benefits and Other Unrequited Expenses

The Government Superannuation Fund Authority - Subsidies to Government Superannuation Fund Scheme appropriation was reclassified as a non-departmental other expense appropriation from 2007/08. Prior to 2007/08 the movements in the appropriation were largely owing to net movements in the Crown's liability to the Government Superannuation Fund.

Non-Departmental Borrowing Expenses

Debt servicing costs trend upwards up between 2008/09 and 2010/11. This variance depends on the interest rates and amount of debt outstanding.

Non-Departmental Other Expenses

Expenditure was broadly stable until 2007/08. As noted above from 2007/08 the movement in the Government Superannuation Fund unfunded liability was recorded in non-departmental other expenses, causing the large increase in that year relative to prior years. From a peak in 2008/09, expenditure decreases, largely owing to rail-related appropriations being transferred to Vote Transport, effective 1 July 2009. The 2009/10 year includes a budget of $1,178 million for payments in respect of guarantees and indemnities.

Non-Departmental Capital Expenditure

This appropriation category comprises purchases of debt and equity by the Crown in various Crown entities, and capital additions to the Crown's physical assets. In 2008/09, capital expenditure increased again, largely owing to the purchase of Toll NZ Limited's rail business and associated costs and a New Zealand Railways Corporation capital injection for the purchase of KiwiRail, a Reserve Bank equity injection of $600 million, increased contributions to the International Monetary Fund, and an increased contribution to the New Zealand Superannuation Fund. In 2009/10, the contributions to the International Monetary Fund remained relatively stable, while the contribution to the New Zealand Superannuation Fund fell considerably. The 2010/11 estimates does not include a contribution to the New Zealand Superannuation Fund or to the International Financial Institutions (IFI's).

Crown Revenue

Non-tax Crown revenue largely comprises capital charge, interest from securities and deposits, and dividends from State-owned enterprises and Crown entities. Crown revenue is broadly stable apart from peaks in 2005/06, 2006/07 and 2009/10. These peaks are largely due to one-off special dividends from Meridian Energy Limited in 2005/06, following the sale of its Australian investments, and increased Air New Zealand dividends. The increase in 2009/10 is a result of increased dividends from Meridian Energy and Might River Power as a result of record profits during the year.

Crown Capital Receipts

Variances in Crown capital receipts are largely due to International Monetary Fund capital returns and capital withdrawals from Crown companies.

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

Print this section

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#

Print this section

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 Treasury.

Administration of Crown Borrowing PLA (M31)

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Notes

Performance targets: Administration of Crown Borrowing PLA, Administration of Derivative Transactions PLA and Administration of Investment of Public Money PLA

Performance targets have been specified as a total for activity across all three NZDMO PLA output classes, as it is more meaningful to aggregate the quantitative targets across these output classes. Measures have been cross-referenced in all three output classes.

Value-added from management of the tactical portfolios meets target level

NZDMO derives the value-added figure from its management reporting, which is calculated on a different basis from external Crown financial statement reporting. The 'tactical' portfolios are those where NZDMO is able to conduct discretionary transactions to manage risks: specifically, the liquidity, departmental and foreign exchange portfolios.

The NZDMO values its portfolio(s) by the commonly-used methodology of calculating net present values from all future cash flows using zero-coupon discount curves which are generated at least daily from current market data. Generally, no counter-party credit spreads are applied to the curves.

NZDMO uses current spot foreign exchange rates to translate foreign currency net present values to New Zealand dollars. The value-added measure is primarily used to compare current performance against historic performance. Historic performance helps guide the establishment of future targets, which are set annually taking into account changes in the external environment.

Compliance with risk management policies - performance measure

To improve transparency, the 2010/11 target explicitly identifies the number of breaches considered acceptable under existing NZDMO policy.

Average value at risk (VaR) - performance measure

The Minister of Finance has agreed to a limit for average monthly VaR across the whole of NZDMO's operations of $14 million. NZDMO's performance target for the tactical portfolios is set at 10% of the total limit, or $1.400 million.

Conditions on Use of Appropriation

Administration of Derivative Transactions PLA (M31)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Notes

Performance targets: Administration of Crown Borrowing PLA, Administration of Derivative Transactions PLA and Administration of Investment of Public Money PLA

Performance targets have been specified as a total for activity across all three NZDMO PLA output classes, as it is more meaningful to aggregate the quantitative targets across these output classes. Measures have been cross-referenced in all three output classes. The full set of measures, including targets for 2010/11 and relevant notes are published in the Administration of Crown Borrowing PLA.

Conditions on Use of Appropriation

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

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase of $1.600 million from 2009/10 to 2010/11 relates to the increased number of entities whose depositors are expected to be paid out in 2010/11.

Output Performance Measures and Standards

This Performance measure was formerly part of State Sector and Economic Performance Policy Advice and Management MCOA (M31).

Conditions on Use of Appropriation

Administration of Investment of Public Money PLA (M31)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Notes

Performance targets: Administration of Crown Borrowing PLA, Administration of Derivative Transactions PLA and Administration of Investment of Public Money PLA

Performance targets have been specified as a total for activity across all three NZDMO PLA output classes, as it is more meaningful to aggregate the quantitative targets across these output classes. Measures have been cross-referenced in all three output classes. The full set of measures, including targets for 2009/10 and relevant notes are published in the Administration of Crown Borrowing PLA.

Conditions on Use of Appropriation

Crown Guarantee Schemes (M31)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The 2010/11 appropriation relates to the Cabinet approval of $3.700 million for the extension of the Deposit Guarantee Scheme to 31 December 2011. On 10 March 2010, the Minister of Finance announced the closure of the Wholesale Funding Guarantee Facility effective from 30 April 2010.

The 2009/10 appropriation includes an expense transfer from 2008/09 of $967,000 for litigation costs that may occur.

Output Performance Measures and Standards

These performance measures were formerly part of State Sector and Economic Performance Policy Advice and Management MCOA (M31).

Current and Past Policy Initiatives

Establishment of the New Zealand Productivity Commission (M31)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

Establishment of the New Zealand Productivity Commission is a new appropriation for 2010/11.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Infrastructure Advice and Co-ordination (M80)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Conditions on Use of Appropriation

Macro Economic Policy Advice & Management MCOA (M31)#

Print this section

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

These output classes all contribute to the outcome of a stable and sustainable macroeconomic environment in New Zealand.

Expenses and Revenue

Reasons for Change in Appropriation

These appropriations have been changed to reflect Ministerial priorities.

Output Performance Measures and Standards

Average value at risk (VaR) - performance measure

The Minister of Finance has agreed to a limit for average monthly VaR across the whole of NZDMO's operations of $14 million. NZDMO's performance target for Crown lending activities is set at 10% of the total limit, or $1.400 million.

Conditions on Use of Appropriation

State Sector and Economic Performance Policy Advice and Management MCOA (M31)#

Print this section

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

These output classes all contribute to the outcomes of improving New Zealand's overall economic performance and improving state sector performance.

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in the appropriation in 2010/11 is largely a result of new funding being provided in the 2009/10 Supplementary Estimates for the benchmarking and target setting phase of the Better Administration Support Services Project.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Part 2.2 - Non-Departmental Output Expenses#

Print this section

Intended Impacts, Outcomes and Objectives

 

2025 Productivity Taskforce (M31)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in expenditure in 2010/11 reflects the expenditure phasing of the Taskforces project across three financial years.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Enquiries, Reviews and Research Into Productivity Matters (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This will be the first year of operation for this appropriation.

Output Performance Measures and Standards

Note 1 - For further information on the intended impacts, outcomes and objectives of the Non-Departmental Output Expense appropriations, please see the Statements of Intent of the Guardians of New Zealand Superannuation and New Zealand Productivity Commission.

Current and Past Policy Initiatives

Management of New Zealand House, London (M31)#

Print this section

Scope of Appropriation

Expenses

Output Performance Measures and Standards

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

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

A one-off expense of $200,000 was budgeted for in 2009/10 to perform remedial work on redundant geothermal assets at Wairakei.

Output Performance Measures and Standards

Management of the New Zealand Superannuation Fund (M31)#

Print this section

Scope of Appropriation

Expenses

Output Performance Measures and Standards

Current and Past Policy Initiatives

Summary of Service Providers for Non-Departmental Outputs#

Print this section

The above table summarises funding to be allocated through Vote Finance 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 4 - Details for Borrowing Expenses#

Print this section

Part 4.2 - Non-Departmental Borrowing Expenses

Debt Servicing PLA (M31)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change reflects interest rate movements and the amount of debt outstanding.

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Crown Residual Liabilities (M31)

Scope of Appropriation

Expenses

Expected Results

Geothermal Wells Fund (M31)#

Print this section

Scope of Appropriation

Expenses

Expected Results

Government Superannuation Appeals Board (M31)#

Print this section

Scope of Appropriation

Expenses

Expected Results

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

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Custodial, investment and administration costs are higher due to an increase in assets under fund management.

Expected Results

Government Superannuation Fund Unfunded Liability PLA (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Current service and interest unwinding costs are forecast to be higher in 2010/11 as a result of increases in CPI indexation and discount rates.

Expected Results

 

Current and Past Policy Initiatives

 

 

GST Compensation for Government Superannuation Fund and National Provident Fund recipients (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This new appropriation is a result of the Budget 2010 Tax Package.

Current and Past Policy Initiatives

Impairment of Loans to Taitokerau Forest Limited (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The impairment expense varies due to the profile of additional loan funding provided to Taitokerau Forests.

Expected Results

Current and Past Policy Initiatives

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

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease reflects marginal changes to the forecast assumptions, other than actuarial gains and losses, in the Crown's liability under section 60 of the National Provident Fund Restructuring Act 1990.

Expected Results

New Zealand House, London (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

New Zealand House operating costs were reduced in 2009/10 as a result of foreign exchange rate movements and lower occupancy rates during the year.

Expected Results

Taitokerau Forests Limited Grant (M31)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

This expense varies due to the profile of the grant funding in accordance with Taitokerau forests Limited agreement.

Expected Results

Current and Past Policy Initiatives

Unclaimed Money PLA (M31)#

Print this section

Scope of Appropriation

Expenses

Expected Results

Unclaimed Trust Money PLA (M31)#

Print this section

Scope of Appropriation

Expenses

Expected Results

Reporting Mechanisms#

Print this section

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#

Print this section

Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

The Treasury - Capital Expenditure PLA (M31)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The 2010/11 budgeted capital expenditure is more than 2009/10 largely owing to the timing of routine replacement and upgrade of the Treasury's information technology.

Expected Results

The budgeted capital expenditure for the 2010/11 financial year is mainly for the routine replacement and upgrade of the department's information technology. The forecast capital expenditure will support the efficient delivery of services as set out in the Treasury's Statement of Intent.

Part 6.2 - Non-Departmental Capital Expenditure#

Print this section

Intended Impacts, Outcomes and Objectives

Asian Development Bank PLA (M31)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Cabinet has approved funding for New Zealand's subscription to the General Capital Increase at the Asian Development Bank in 2010/11.

Expected Results

 

Current and Past Policy Initiatives

Landcorp Protected Land Agreement (M31)#

Print this section

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Under the terms of the Protected Land Agreement, an initial payment of $52.200 million was paid in cash to Landcorp in 2007/08. The balance of the compensation is through the reinvestment of dividends spread over several years finalising in 2011/12.

Current and Past Policy Initiatives

New Zealand Productivity Commission Capital (M31)#

Print this section

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

This is the first year of operation of the New Zealand Productivity Commission. The appropriations form part of its establishment in 2010/11.

Expected Results

Current and Past Policy Initiatives

Taitokerau Forests (M31)#

Print this section

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Loans are made in accordance with the loan agreement.

Expected Results

Current and Past Policy Initiatives

Reporting Mechanisms#

Print this section

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 Ministerial Services#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister Responsible for Ministerial Services (M47)

ADMINISTERING DEPARTMENT: Department of Internal Affairs

MINISTER RESPONSIBLE FOR DEPARTMENT OF INTERNAL AFFAIRS: Minister of Internal Affairs

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Minister Responsible for Ministerial Services is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

Departmental Appropriations

• A total of $27.260 million (69% of total departmental appropriations in this Vote) for support services to Members of the Executive including office administration, accounting, personnel, information and communication technology, facilities management, media and advisory services, and provision of residential accommodation services.
• A total of $7.925 million (20% of total departmental appropriations in this Vote) for the provision of chauffeur-driven vehicle services for Members of the Executive, the Leader of the Opposition, former Governors-General and Prime Ministers and their spouses, the judiciary, distinguished visitors, and the provision of self-drive vehicles for Members of the Executive.
• A total of $4.430 million (11% of total departmental appropriations in this Vote) for managing guests of Government visits, receptions at international airports for the Governor-General, Members of the Executive and guests of Government; State and ministerial functions, commemorative events and national anniversaries.

Non-Departmental Appropriations

• A total of $475,000 for annuities to former Governors-General, Prime Ministers and their surviving spouses.
• A total of $20.300 million for Executive Council and Members of the Executive's salaries and allowances, Governors-General pension arrangements, travel expenses for Members of the Executive and former Governors-General and Prime Ministers.
• A total of $137,000 for depreciation on official residences for Members of the Executive.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Vote Ministerial Services provides the Government with advice and services to ensure that the Executive Government is well supported.

Contribution of Appropriations to Government Priorities and Outcomes

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

Analysis of Significant Trends

Total Vote: All Appropriations

Significant changes in departmental and non-departmental appropriations are discussed briefly below.

Vote trends in actual expenses and capital expenditure by appropriation type

Source: Department of Internal Affairs

Departmental Output Expenses

The baseline increased in 2006/07 to provide for increased Ministerial travel and additional Ministerial Services staff to support the Executive. Additional funding was provided in 2007/08 for guests of government and Sir Edmund Hillary's funeral and memorial service costs. In 2008/09 and outyears additional funding was provided to support the Executive and for the Visits and Ceremonials Office. The level of additional funding to support the Executive was higher in 2008/09 due to the change of Executive.

Benefits and Other Unrequited Expenses

In 2006/07, one-off funding of $5.850 million was provided for a technical adjustment to recognise the actuarial valuation for Annuities to Former Governors-General, Prime Ministers and their Surviving Spouses.

Non-Departmental Other Expenses

In 2006/07, expenditure increased to provide for a one-off technical adjustment to recognise the actuarial valuation of travel for former Governors-General and Prime Ministers. Additional funding was provided in 2008/09 and outyears for travel for Members of the Executive.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

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 Department of Internal Affairs.

Support Services to Members of the Executive (M47)

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Note 1 - Ratings used in all Ministerial Satisfaction Surveys are: Very Good, Good, Satisfied, Poor, Very Poor.

Current and Past Policy Initiatives

VIP Transport (M47)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Current and Past Policy Initiatives

Visits and Official Events Coordination (M47)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 3 - Details for Benefits and Other Unrequited Expenses#

Print this section

Part 3.2 - Non-Departmental Benefits and Other Unrequited Expenses

Intended Impacts, Outcomes and Objectives

Annuities to Former Governors-General, Prime Ministers and their Surviving Spouses PLA (M47)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in this appropriation is due to the recalculation of the actuarial valuation for annuities to former Governors-General, Prime Ministers and their surviving spouses in 2009/10.

Conditions on Use of Appropriation

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Depreciation (M47)

Scope of Appropriation

Expenses

Executive Council and Members of the Executive's Salaries and Allowances PLA (M47)#

Print this section

Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Governors'-General Pension Arrangements PLA (M47)#

Print this section

Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Members of the Executive's Internal and External Travel (M47)#

Print this section

Scope of Appropriation

Expenses

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Travel for Former Governors-General and Prime Ministers (M47)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in this appropriation is due to the recalculation of the actuarial valuation for travel for former Governors-General and Prime Ministers in 2009/10.

Conditions on Use of Appropriation

Performance Information for Appropriations Vote Office of the Clerk#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Speaker of the House of Representatives (M78)

ADMINISTERING DEPARTMENT: Office of the Clerk of the House of Representatives

MINISTER RESPONSIBLE FOR OFFICE OF THE CLERK OF THE HOUSE OF REPRESENTATIVES: Speaker of the House of Representatives

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Speaker of the House of Representatives is responsible for appropriations in the Vote for the 2010/11 financial year covering the following:

• A total of just over $17 million to assist the Clerk of the House to provide specialist advice on parliamentary procedure and parliamentary law, and administrative services to the Speaker and members of the House of Representatives in the performance of their duties as members of the House.
• A total of just over $1 million to assist the Clerk of the House to provide advice on inter-parliamentary relations to the Speaker and members, establish an annual programme of incoming and outgoing visits, develop and implement individual visit programmes, assist in building the capacity of the Pacific Island parliaments, support the New Zealand Parliament's contribution on global issues at international parliamentary organisations and host international parliamentary conferences.

The Clerk of the House of Representatives is the principal permanent officer of the House and carries out the functions required under section 3 of the Clerk of the House of Representatives Act 1988.

The functions of the Clerk of the House of Representatives shall be:

(a) to note all proceedings of the House of Representatives and of any committee of the House

(b) to carry out such duties and exercise such powers as may be conferred on the Clerk of the House of Representatives by law or by the Standing Orders and practice of the House of Representatives

(c) to act as the principal officer of the Office of the Clerk of the House of Representatives and, in that capacity, to manage that office efficiently, effectively, and economically

(d) to ensure that the members of the staff of the Office of the Clerk of the House of Representatives carry out their duties (including duties imposed on them by law or by the Standing Orders or practice of the House of Representatives) and maintain:

(i) proper standards of integrity and conduct, and

(ii) concern for the public interest

(e) to be responsible, under the direction of the Speaker of the House of Representatives, for the official report of the proceedings of the House of Representatives and its committees.

The Office of the Clerk, established under section 14 of the Act, assists the Clerk in carrying out these functions.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Government Priorities and Outcomes - Links to Appropriations

The outcome of the Office of the Clerk is a legislature in which members of Parliament are able to discharge their constitutional duties in respect of the consideration of legislation and other parliamentary business, and interested parties are informed and able to participate.

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

Analysis of Significant Trends

Operating expenses increased over the years 2005/06 to 2010/11 to fund a number of functions of the Office of the Clerk. The major ongoing items are:

• extensions to the AM radio broadcasting network and operating costs
• set-up and ongoing costs of in-house legal advisory services
• improvements to the publishing systems for parliamentary publications
• enhancements to the Office of the Clerk information technology
• the set-up and ongoing operating costs of the televising of Parliament
• implementation of the e-Committee system to all select committees.

There was a $2.400 million one-off appropriation in 2007/08 to fund the Asia-Pacific Parliamentary Forum meeting in Auckland in January 2008.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

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 Office of the Clerk of the House of Representatives.

Inter-Parliamentary Relations (M78)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in this appropriation is due to termination of funding from expenses carried forward into the 2009/10 year.

Output Performance Measures and Standards

Secretariat Services for the House of Representatives (M78)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in this appropriation is due to termination of funding from expenses carried forward into the 2009/10 year.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 6 - Details and Expected Results for Capital Expenditure#

Print this section

Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Office of the Clerk of the House of Representatives - Capital Expenditure PLA (M78)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

There is no change to the capital contribution. The change to the capital expenditure reflects the changes to internally funded capital expenditure plans for computer hardware and software to support business processes.

Performance Information for Appropriations Vote Ombudsmen#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Speaker of the House of Representatives (M78)

ADMINISTERING DEPARTMENT: Office of the Ombudsmen

MINISTER RESPONSIBLE FOR OFFICE OF THE OMBUDSMEN: Speaker of the House of Representatives

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Speaker is responsible for appropriations in Vote Ombudsmen in 2010/11 totalling $8.691 million (GST exclusive). This comprises:

• $7.957 million annual appropriation for the Office of the Ombudsmen
• $611,000 permanent legislative authority for Ombudsmen remuneration, and
• $123,000 permanent legislative authority for capital expenditure.

The whole of the Vote is committed to the investigation and resolution of complaints about government agencies at central, regional and local levels.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Objectives of the Vote

The appropriations in Vote Ombudsmen help fulfil Parliament's intent through the Ombudsmen Act 1975, the Official Information Act 1982, the Local Government Official Information and Meetings Act 1987, the Crimes of Torture Act 1989, the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 and the Protected Disclosures Act 2000 and make an important contribution to the maintenance and enhancement of "open" government within New Zealand. Specifically, the Ombudsmen contribute to strengthening the New Zealand system of democracy through improved public administration and access to official information, and enhanced public confidence in government administration. The dissemination of information assists the public in understanding and participating in government administration.

The appropriations will purchase the independent investigation of complaints from the public:

• under the Ombudsmen Act 1975 arising from any act, omission, decision or recommendation relating to a matter of administration and affecting any person or body of persons in his/her/its personal capacity by any government agencies at central, regional or local level
• under the Official Information Act 1982 and the Local Government Official Information and Meetings Act 1987 about decisions on requests for access to official information held by any Minister of the Crown, or any government agencies at central, regional or local level
• where justified, the recommendation of appropriate remedial action to resolve those complaints
• investigations either on a complaint made to an Ombudsman by any person or body of persons, or in the case of investigations under the Ombudsmen Act 1975, by an Ombudsman of his/her own motion
• the maintenance of the Ombudsmen's extended involvement in the investigation of complaints from prisoners in penal institutions including selected serious incidents and the monitoring of death in custody investigations conducted by Inspectors of Corrections.

Under the Crimes of Torture Act 1989:

• fulfilling the requirements as "National Preventive Mechanism" for prisons, mental health, immigration detention facilities and residences established under section 364 of the Children, Young Persons and Their Families Act 1989, and
• reporting annually to Parliament in respect of inspections undertaken under the Act.

Under the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008

• monitoring and reporting on New Zealand's implementation of the United Nations Convention on the Rights of Persons with Disabilities.

Under the Protected Disclosures Act 2000:

• to provide an employee who has made, or is considering making, a protected disclosure, information and guidance on the application of the legislation, and
• where a protected disclosure is made to an Ombudsman in their capacity as an "appropriate authority", to take such action on the matter as prescribed in the Act.

For further information on the intended impacts, outcomes and objectives of the Office of the Ombudsmen please see the Office's 2010-2013 Statement of Intent.

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

The bulk of the movement in departmental appropriations in Vote Ombudsmen which are detailed in the Summary of Financial Activity table above, are largely driven by movements in departmental output expenses required to maintain an efficient, effective and professional Ombudsmen function. More recent movements include new work responsibilities given the Ombudsmen. Details of significant movements within each appropriation are shown below.

Departmental Output Expenses

The baseline movements amounting to approximately $2.500 million during the period detailed in the Summary of Financial Activity are due to:

• the 2005/06 Estimates provided the balance of funding approved in 2004/05 for staff remuneration. Parliament also approved a budgetary provision for two additional staff to provide training and policy advice which underpins a move in the office's strategic direction towards a more pro-active positioning. In addition, funding was provided to strengthen the office "call centre" to enable its implementation of a more efficient and effective process for dealing with enquiries and more simple complaints. Funding was also provided to continue the office communications strategy that aims to increase awareness within the various ethnic communities that now make up the New Zealand population of the role fulfilled by the Ombudsmen
• the 2006/07 Estimates allow for the full year cost of additional staff approved in the previous year
• a Supplementary Estimates increase was approved for 2006/07 to meet part year office accommodation rental increases in Wellington and Auckland and preliminary costs associated with the office being host to the 2007 Information Commissioners International Conference
• the 2007/08 Estimates provide 'one-off' increases to the office baseline to meet costs associated with hosting the 2007 Information Commissioners International Conference and recruitment costs for a 3rd permanent Ombudsman. Additional funding has been provided to allow staff remuneration to more closely reflect rates paid by other government sector employers. The funding was provided half in the 2007/08 year and half in the 2008/09 year. Funding has also been provided for costs associated with the Ombudsmen being designated the "National Preventive Mechanism" for prisons, mental health, immigration detention facilities and residences established under section 364 of the Children, Young Persons and Their Families Act 1989, under the Crimes of Torture Act 1989 and an additional investigating officer. Further funding has been provided for the full year cost of increased office accommodation rentals at Auckland and Wellington
• the 2007/08 Supplementary Estimates provide 'one-off' funding for costs associated with a review of the Criminal Justice Sector, recruitment costs for a third Ombudsman, technical support to the Ombudsmen, NZAID funding to Pacific nation attendees at the 2007 Information Commissioners International Conference. Funding has also been provided to support the Ombudsmen's enhanced role within prisons
• budget increases were approved for 2008/09 to meet costs associated with the Ombudsmen being a "National Preventive Mechanism" under the Crimes of Torture Act 1989, strengthening policy, strategic planning, quality review and training capabilities and, further enhancing the Ombudsmen role in prisons to include the investigation of selected other serious incidents and monitoring of investigations of deaths in custody undertaken by the Inspectors of Corrections. Funding has also been provided for an office accommodation rental increase at Christchurch
• Parliament approved as part of the 2010/11 estimates a baseline increase to meet costs associated with the Ombudsmen's new responsibilities under the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 that gives effect to the United Nations Convention on the Rights of Persons with Disabilities. A further increase was approved for two years to address an increase in compliants received during the current economic downturn.

Departmental Other Expenses

Movements in Departmental Other Expenses are wholly attributable to determinations issued by the Remuneration Authority relating to Ombudsmen remuneration and to decisions by Parliament regarding the number of Ombudsmen appointed at any one time. There are presently two permanent Ombudsmen.

Capital Expenditure

Movements in the provision for capital expenditure follow:

• the 2007/08 Estimates provided a capital contribution of $73,000 to Vote Ombudsmen for accommodation alteration costs associated with the Ombudsmen being designated as a National Preventive Mechanism under the Crimes of Torture Act 1989
• an additional capital contribution of $238,000 was approved as part of the 2007/08 Supplementary Estimates to meet further accommodation alteration changes required at Wellington office and computer and furniture/fittings costs associated with the Ombudmen's enhanced role in prisons
• the reduced budgetary provision of $123,000 for 2009/10 and outyears reflects capital expenditure intentions for the foreseeable future.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Investigation and Resolution of Complaints About Government Administration (M78)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in the appropriation results from the Ombudsmen's new responsibilities under the Disability (United Nations Convention on the Rights of Persons with Disabilities) Act 2008 and an adjustment for capability maintenance.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.1 - Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Remuneration of Ombudsmen PLA (M78)

Scope of Appropriation

Expenses

Current and Past Policy Initiatives

Part 6 - Details and Expected Results for Capital Expenditure#

Print this section

Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Office of the Ombudsmen - Capital Expenditure PLA (M78)

Scope of Appropriation

Capital Expenditure

Performance Information for Appropriations Vote Parliamentary Service#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Speaker of the House of Representatives (M78)

ADMINISTERING DEPARTMENT: Parliamentary Service

MINISTER RESPONSIBLE FOR PARLIAMENTARY SERVICE: Speaker of the House of Representatives

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Speaker is responsible for appropriations in Vote Parliamentary Service for the 2010/11 financial year covering the following:

• a total of just over $67 million for purchasing support and administrative services from the Parliamentary Service
• a total of just over $41 million for covering other expenditure to support members
• a total of nearly $17 million for payment of members' salaries and allowances
• a total of just over $4 million for capital investment in the parliamentary precincts.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Objectives of the Vote

The Parliamentary Service's key objective is:

• Provision of high-quality services to Parliament.

The Parliamentary Service has five intermediate objectives. These are:

• Improve member and Party satisfaction
• Improve systems and processes
• Improve people capability
• Increase productivity
• Enhance the stewardship of the institution of Parliament

The Service's empowering legislation is the Parliamentary Service Act 2000, which states in section 7 that the principal duties of the Parliamentary Service are:

(a) to provide administrative and support services to the House of Representatives and to members of Parliament; and

(b) to administer, in accordance with directions given by the Speaker, the payment of funding entitlements for parliamentary purposes.

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Output expenses

The increase in 2010/11 and outyears is for continued provision of buildings, facilities and support to large electorates.

Other expenses

The increase in 2010/11 and outyears is for continued support to large electorates.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

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 Parliamentary Service.

Operations, Information and Advisory Services MCOA (M78)

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

MCOA established to combine similar output classes for services provided by Parliamentary Service.

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation has not changed materially.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Services to Members (M78)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation has not changed materially.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Depreciation Expense on Parliamentary Complex (M78)

Scope of Appropriation

Expenses

Members' Communications (M78)#

Print this section

Scope of Appropriation

Expenses

Members of the House of Representatives' Salaries and Allowances PLA (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - ACT (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - Green (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - Labour (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - Maori (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - National (M78)#

Print this section

Scope of Appropriation

Expenses

.

Party and Member Support - Progressive Coalition (M78)#

Print this section

Scope of Appropriation

Expenses

Party and Member Support - United Future (M78)#

Print this section

Scope of Appropriation

Expenses

Travel of Members and Others (M78)#

Print this section

Scope of Appropriation

Expenses

.

Reporting Mechanisms#

Print this section

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#

Print this section

Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Parliamentary Service - Capital Expenditure PLA (M78)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

There are many projects included in each year, and capital works are often only for a single year, so direct comparison has limited value.

Part 6.2 - Non-Departmental Capital Expenditure#

Print this section

Intended Impacts, Outcomes and Objectives

Crown Asset Management (M78)

Scope of Appropriation and Capital Expenditure

Reporting Mechanisms#

Print this section

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 Prime Minister and Cabinet#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Prime Minister (M52)

ADMINISTERING DEPARTMENT: Department of the Prime Minister and Cabinet

MINISTER RESPONSIBLE FOR DEPARTMENT OF THE PRIME MINISTER AND CABINET: Prime Minister

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

The Prime Minister is responsible for appropriations in the Vote: Prime Minister and Cabinet for the 2010/11 financial year covering the following:

• a total of over $8.440 million (26.5% of the Vote) on free and frank advice on policy issues; services to facilitate inter-departmental coordination of policy development and leadership of a more collective approach to performance across the state sector; and coordination of central government activities aimed at protecting New Zealand's domestic and external security. From the Cabinet Office, advice on constitutional policy and procedural issues for the Governor-General, and the Prime Minister and Cabinet; coordination of the Government's legislation programme; secretariat services to Cabinet, Cabinet committees and the Executive Council; and administration of the New Zealand Royal Honours system
• a total of over $3.590 million (11.3% of the Vote) on support services to the Governor-General and maintenance of the Residences
• a total of $3.780 million (11.9% of the Vote) for the provision of information and reports on events and trends affecting New Zealand's national security priorities
• a total of $335,000 (1.1%) for establishing and operating the Science Advisory Committee
• a total of $11.650 million (36.6% of the Vote) on Government House capital investment, principally the conservation (including renovation and refurbishment) of Government House, Wellington
• a total of nearly $1.280 million (4.0% of the Vote) under permanent legislative authority (Civil List Act 1979) for payments for the salary, personal allowance and travel expenses of the Governor-General
• a total of over $1.470 million (4.6% of the Vote) on departmental capital expenditure
• a total of $51,000 (0.2% of the Vote) under permanent legislative authority (NZSIS Amendment (No. 2) Act 1999) for payments to the Commissioner of Security Warrants
• a total of $1.060 million (3.3% of the Vote) for depreciation expenses on Crown assets (Government Houses and their contents)
• a total of $168,000 (0.5% of the Vote) for an ex gratia payment to the University of Auckland for the services of the Prime Minister's Chief Science Advisor.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Government Priorities and Outcomes - Links to Appropriations

Objectives of the Vote

The appropriations for Vote Prime Minister and Cabinet are directed towards the overarching objective to work to achieve good government.

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Total Vote: All Appropriations

The movements in departmental and non-departmental appropriations in Vote Prime Minister and Cabinet, which are detailed in the Summary of Financial Activity table above, are largely driven by movements in Output Expenses and Crown Capital Expenditure.

Details of significant movements within each appropriation category are detailed below.

Departmental Output Expenses

The increase in 2007/08 is largely due to one-off funding for the climate change programme.

The increase in 2009/10 is largely due to increase in funding for the establishment of the Science Advisory Committee.

The increase in 2010/11 is largely due to increase in funding for the establishment of the Science Advisory Committee and for relocation of DPMC's intelligence groups to a new purpose built facility for the Government Communications Security Bureau.

Non-Departmental Capital Expenditure

This appropriation includes in particular capital additions, alterations and conservation activities at Government House Wellington in order to maintain or increase its on-going use, functionality, and heritage asset value.

The increase in 2007/08 is due to additional funding for detailed design for the proposed conservation of Government House, Wellington.

The increase in 2008/09 is due to additional funding for the conservation of Government House, Wellington.

The increase in 2009/10 is due to transfer from 2010/11 baseline. This funding is time limited until 2011/12.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

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 Department of Prime Minister and Cabinet.

Intelligence Assessments to Support National Security Priorities (M52)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The net increase in 2010/11 is a result of additional funding for relocation of DPMC's intelligence groups and a transfer of funds to Vote: Communications, Security and Intelligence, to support secure network upgrades.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Policy Advice and Secretariat and Coordination Services (M52)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in 2010/11 is due mainly to a fiscally neutral transfer to Support Services to the Governor-General and Maintenance of the Residences in 2009/10.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Science Advisory Committee (M52)#

Print this section

Scope of Appropriation

Expenses and Revenue

Output Performance Measures and Standards

Current and Past Policy Initiatives

Reasons for Change in Appropriation

In response to commitments made by the incoming government, Cabinet agreed to establish the Science Advisory Committee.

Support Services to the Governor-General and Maintenance of the residences (M52)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in 2010/11 is due mainly to a fiscally neutral transfer to Government House Capital Investment in 2009/10.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Part 5 - Details and Expected Results for Other Expenses#

Print this section

Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

Depreciation Expenses on Crown Assets (M52)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The decrease in 2010/11 is due to additional depreciation required in 2009/10 for the write off of impaired assets resulting from the conservation project for Government House, Wellington.

Ex gratia payment to the University of Auckland (M52)#

Print this section

Scope of Appropriation

Expenses

Current and Past Policy Initiatives

Reasons for Change in Appropriation

In appointing the Chief Science Advisor, Cabinet agreed to make an ex gratia payment to the University of Auckland for his time.

Fees for the Commissioner of Security Warrants PLA (M52)#

Print this section

Scope of Appropriation

Expenses

Governor-General - Remuneration and Travel PLA (M52)#

Print this section

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The increase in 2010/11 is for anticipated increases in the Governor-General's remuneration, personal allowance and travel expenses.

Reporting Mechanisms#

Print this section

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#

Print this section

Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Department of the Prime Minister and Cabinet - Capital Expenditure PLA (M52)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The net increase is due mainly to relocation of DPMC's intelligence groups.

Expected Results

Part 6.2 - Non-Departmental Capital Expenditure#

Print this section

Intended Impacts, Outcomes and Objectives

Government House - Capital Investment (M52)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The net decrease in 2010/11 is due to baseline adjustments in 2009/10 by a carry forward from 2008/09 and a fiscally neutral transfer from 2010/11 for the anticipated progress in the conservation project.

Current and Past Policy Initiatives

Reporting Mechanisms#

Print this section

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 Revenue#

Print this section

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Revenue (M57)

ADMINISTERING DEPARTMENT: Inland Revenue Department

MINISTER RESPONSIBLE FOR INLAND REVENUE DEPARTMENT: Minister of Revenue

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

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

• a total of just over $648 million on departmental output expenses including management of debt and outstanding returns, policy advice, services to inform the public about entitlements and meeting obligations, services to process obligations and entitlements, and taxpayer audit
• a total of just under $96 million for departmental capital expenditure
• a total of just under $4,430 million for non-departmental benefits and other unrequited expenses
• a total of just over $9 million for non-departmental borrowing expenses, and
• a total of just under $1,655 million for non-departmental other expenses.

The Minister of Revenue is also responsible for Crown revenue and receipts in the Vote for the 2010/11 financial year covering the following:

• a total forecast of $48,516 million on tax revenue
• a total forecast of $1,295 million on non-tax revenue, and
• a total forecast of $825 million on capital receipts.

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

Part 1.2 - High-Level Objectives of the Vote#

Print this section

Government Priorities and Outcomes - Links to Appropriations

Objectives of the Vote

Vote Revenue contributes to improving the economic and social wellbeing of New Zealanders through the provision of policy advice to Government, through the collection of revenue and through the administration of social policy programmes.

We need an effective and efficient tax administration with a stable revenue base and low compliance costs for Government to achieve its priorities. Inland Revenue is also working to continuously provide improved value for money from existing Government expenditure. Delivering efficient services that improve compliance and reduce compliance costs and being effective in our administration of social policy programmes will help give our customers the support and choices they need.

Part 1.3 - Trends in the Vote#

Print this section

Summary of Financial Activity

New Policy Initiatives

Analysis of Significant Trends

Departmental Output Expenses

Departmental Output Expenses

Source: Inland Revenue

Expenditure on Departmental Output Expenses has grown from just over $459 million in 2005/06 to an estimated amount of nearly $636 million in 2009/10 and a budgeted amount of just over $648 million in 2010/11. This is an expected increase of approximately $190 million from 2005/06 to 2010/11. The baseline for 2010/11 would be just under $622 million if funding for the Budget 2010 tax package was excluded.

The baseline growth in the years to 2008/09 is largely driven by the development of KiwiSaver. The funding decrease in 2009/10 is also largely attributable to the completion of the KiwiSaver development work and its move into ongoing delivery, as well as value for money savings delivered in Budget 2009.

The baselines in 2010/11 and the outyears increase as a result of funding for the Budget 2010 tax package (implementing policy changes and additional audit and compliance activity), as well as the long-term accommodation solution in Wellington. Overall, however, the baseline has declined since 2008/09 as the department manages cost pressures through finding efficiencies and delivering increased value for money for Government.

Departmental output expenses for 2010/11

Source: Inland Revenue

Non-Departmental Benefits and Other Unrequited Expenses

Non-Departmental Benefits and Other Unrequited Expenses

Source: Inland Revenue

Benefits and Other Unrequited Expenses includes appropriations for KiwiSaver (eg, kickstart payment, member tax credit, employer tax credit, fee subsidy and interest), Working for Families Tax Credits (eg, family tax credit, in-work tax credit, paid parental leave), research and development tax credit up to 2008/09, payroll subsidy and child support payments to custodial parents.

The increases in 2005/06 and 2006/07 are due to the introduction of new Working for Families Tax Credits. The 2007/08 year shows the first impact of KiwiSaver, with the full year impact reflected in the increase in 2008/09 (ie, first full year of the member tax credit and employer tax credit). 2009/10 and out years reflect the legislative changes to KiwiSaver (repeal of the employer tax credit and member fee subsidy and reduction in the compulsory contribution rates), a reduction in KiwiSaver kickstart payments as new membership growth declines, and the repeal of the research and development tax credit. The forecasts for Working for Families Tax Credits from 2010/11 include increases associated with the Budget 2010 tax package.

Non-Departmental Borrowing Expenses

Non-Departmental Borrowing Expenses

Source: Inland Revenue

Borrowing expenses include interest payments under the Income Equalisation, Adverse Event and Environmental Restoration Account schemes. The interest payable can vary depending on factors such as income changes in the farming, agriculture, fishing and forestry sectors in any particular year. Interest payable is also impacted by deposits set aside to mitigate adverse events and detrimental environmental affects.

Increased interest payments from 2009/10 reflect an increase in forecast deposits into the Income Equalisation and Environmental Restoration Account schemes.

Non-Departmental Other Expenses

Non-Departmental Other Expenses

Source: Inland Revenue

Other expenses includes appropriations relating to bad debt write-offs and the impairment of student loan, child support, general tax, and family support debt.

In 2005/06 and 2006/07 these appropriations were calculated under New Zealand Financial Reporting Standards (NZ FRS) and from 2007/08 these appropriations have been calculated under New Zealand equivalents to International Financial Reporting Standards (NZ IFRS). The large increase in Other Expenses in 2008/09 was due to high impairments for tax and student loans in that year. Impairments and bad debts are forecast to be lower in 2009/10 and outyears, compared to 2008/09.

The forecast movements from 2009/10 onwards are due to increases in the impairment of child support debt as well as bad debt write-offs for tax debt. The former is due to compounding penalties and the latter reflects the flow-on impact of the recent economic environment.

Tax Revenue

Tax Revenue

Source: Inland Revenue

Tax revenue incorporates income taxes, goods and service tax, fringe benefit tax, withholding taxes and other revenues. The increase in actual and estimated tax revenue from 2005/06 to 2007/08 reflects economic growth. The reduction in the company tax rate, changes in personal tax and the impact of a slowing economy can be seen in 2008/09 and 2009/10. The forecasts from 2010/11 reflect a strengthening economy.

Non-Tax Revenue

Non-Tax Revenue

Source: Inland Revenue

Non-tax revenue incorporates child support collections from non-custodial parents, student loan interest unwind, and unclaimed monies. The increase from 2008/09 reflects forecast growth in child support receipts from non-custodial parents.

Capital Receipts

Capital Receipts

Source: Inland Revenue

Capital receipts include student loan capital repayments and deposits into the Adverse Event Income Equalisation, Income Equalisation and Environmental Restoration Account schemes. There was a downward trend in net payments into the Income Equalisation scheme between 2004/05 and 2006/07. However, this trend has reversed and we are seeing a significant increase in deposits into the schemes in 2008/09. The growth in receipts also reflects a forecast increase in student loan borrower repayments, which are in part, due to the voluntary repayment bonus scheme which was introduced in 2008/09.

Performance Improvement Actions

A major focus for Inland Revenue is transforming the way it works. The department will aim to improve efficiency while maintaining the integrity of the tax and social policy systems, and maximising compliance and revenue. In the future, Inland Revenue will administer a growth-enhancing tax system that:

• is easy to comply with, at minimal cost
• has high levels of compliance and revenue collection
• provides customers with certainty, and
• provides speedy responses to customers.

These long-term goals are designed to transform Inland Revenue by 2014. The department will:

• capture only the data it needs for assessments, calculations and risk assessments
• provide only the information customers need, when they need it, in accessible formats and, generally, electronically
• eliminate, as far as possible, reactive enquiries from customers through clear guidance, automated transactions, increasing use of intermediaries, and customers managing their own accounts online, and
• increase proactive compliance through using increased knowledge of its customers to intervene early, often using outbound calling, as well as through faster rulings, fewer disputes and faster resolution.

Achieving transformation will take planned and sequenced steps over the coming years. Inland Revenue's top priorities for 2010-11 include:

• simplifying customer interactions - improving PTS and PAYE processes
• strengthening and renewing its IT infrastructure - including modernising FIRST
• student loan redesign
• improved debt management
• moving more businesses and customers to online services
• faster rulings and improved disputes resolution, and
• developing the skills and capability of its workforce.

Part 2 - Details and Expected Performance for Output Expenses#

Print this section

Part 2.1 - Departmental Output Expenses

Intended Outcomes, Impacts and the link to our Appropriations

Performance Standards Applying to Departmental Output Expenses

When reviewing and determining our performance targets for the coming year, a number of factors are taken into consideration:

• level of funding
• government priorities
• strategic direction
• current and historical performance
• forecast performance, predicting future demand
• policy changes, and
• providing better public services.

This document and the Statement of Intent include previous year targets and estimated year-end actuals to provide comparison and context for our performance measures. We will also be including notes where appropriate to add further contextual information (such as the total number of debt cases on hand relating to the measure of the number of debt cases we are going to clear).

The performance targets are set out in the following sections.

Management of Debt and Outstanding Returns (M57)

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The net increase in appropriation is due to a number of funding decisions, with the Budget 2010 tax package - implementing policy changes and the Budget 2010 tax package - additional audit and compliance accounting for most of the movement of $8.206 million. Other initiatives that affect the movement in this appropriation materially include the long-term accommodation solution in Wellington as well as the operating pressures contingency. The latter is funded for 2009/10 only.

Output Performance Measures and Standards

Note 1 - There were 353,300 debt cases on hand at 30 June 2009. The increase in the 2010/11 standard relates to additional funding for the 2010 Budget tax package - additional audit and compliance activity initiative.

Note 2 - Target reduction reflects lower cash expectations in the current environment and cost increases associated with debt collection.

Note 3 - Target reduction reflects change in measurement methodology from assessments due from 1992 to assessments due over the last five years.

Current and Past Policy Initiatives

Where initiatives have been extended or varied in later budget cycles, the original and changed entries have been merged under a single name.

Policy Advice (M57)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The decrease in the appropriation is mainly due to the operating pressures contingency initiative affecting only 2009/10. Partly offsetting this decrease is additional funding approved for a number of initiatives, including the long-term accommodation solution in Wellington and the Budget 2010 tax package - implementing policy changes. The appropriation increased by $61,000 as a result of the latter of these initiatives.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Where initiatives have been extended or varied in later budget cycles, the original and changed entries have been merged under a single name.

Services to Inform the Public About Entitlements and Meeting Obligations (M57)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in this appropriation reflects multiple initiatives, including the Budget 2010 tax package - implementing policy changes and the Budget 2010 tax package - additional audit and compliance activity. The other initiatives that materially increase this appropriation include the long-term accommodation solution in Wellington, the tax relief for redundancy payments, the implementation of tax and KiwiSaver changes as well as the value for money initiative from Budget 2009. The increases are partly offset by the operating pressures contingency, which applies only to 2009/10.

Output Performance Measures and Standards

Note 4 - The change in the target 2010/11 budget standard for paper correspondence and electronic enquiries response timeliness does not reflect a degradation in service, rather a change in measurement methodology, with the timeliness of registrations now being measured separately and KiwiSaver scheme provider requests for confirmation being excluded.

Note 5 - The significant drop in volumes relates to a change in the definition of correspondence, with KiwiSaver scheme provider requests for confirmation now recorded as self-help contacts.

Current and Past Policy Initiatives

Where initiatives have been extended or varied in later budget cycles, the original and changed entries have been merged under a single name.

Services to Process Obligations and Entitlements (M57)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The reduction in this appropriation reflects multiple decisions over time. The major initiatives where the funding is reducing or not continuing into 2010/11 include the tax relief for redundancy payments, transform Inland Revenue, implementing tax and KiwiSaver changes, standardised business reporting, KiwiSaver enhancements and the operating pressures contingency. The decreases are partly offset by other initiatives, most notably the bonus for voluntary student loan repayments and to a lesser extent the Budget 2010 tax package - implementing policy changes.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Where initiatives have been extended or varied in later budget cycles, the original and changed entries have been merged under a single name.

Taxpayer Audit (M57)#

Print this section

Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

The increase in the appropriation is mainly due to funding for the Budget 2010 tax package - additional audit and compliance activity, the Budget 2010 tax package - implementing policy changes as well as the long-term accommodation solution in Wellington. This is partly offset by funding that is reducing or not being continued past 2009/10. The main of these initiatives are litigations and complex transactions audit and the operating pressures contingency.

Output Performance Measures and Standards