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

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

 

Cover, Contents#

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Introduction#

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

Sector Overview#

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• Ministerial Statements of Responsibility
• Chief Executive Statements of Responsibility

Performance Information for Appropriations in Each Vote#

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• Vote Health

Statement of Forecast Service Performance of Department#

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Forecast Financial Statements of Department#

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• Statement of Common Accounting Policies
• Ministry of Health

Statement of Intent of Department (separately produced but forming part of this volume)#

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• Ministry of Health

Votes and Departments in Each Sector#

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Purpose and Nature of Appropriations#

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

Neither the Crown nor an Office of Parliament can legally incur any expense or capital expenditure - as those terms are defined in the Public Finance Act 1989 (PFA) - unless it is expressly authorised by or under an Act of Parliament.

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

Limits Created by Appropriations#

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

In most cases an appropriation also limits the amount of expenses or capital expenditure that can be incurred, and the time period within which those expenses or capital expenditure can be incurred.

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

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

Responsibility for Appropriations#

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

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

 

Types of Appropriation#

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

These appropriation types can be further differentiated by whether the expenses or capital expenditure are departmental or non-departmental transactions.

Types of Output Expense Appropriations#

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

Appropriation Period#

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The length of the appropriation period affects how appropriations are presented in the Estimates and Supplementary Estimates. Three kinds of appropriation can be distinguished on the basis of period - annual and multi-year (as referred to in the above table on types of output expense appropriations), and permanent:

• Annual Appropriations - Most appropriations listed in the Estimates and Supplementary Estimates allow expenses or capital expenditure to be incurred only during a particular financial year. The annual amounts, for which parliamentary authority is being sought, are shown in bold type in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote. The amounts for RDAs and annual DDAs are forecasts only, and so are not shown in bold type.
• Multi-Year Appropriations (MYAs) - The PFA also permits appropriations that allow expenses or capital expenditure to be incurred during a specified period that spans the whole or parts of more than one financial year, but no more than five financial years. The details of each MYA, including its commencement date and expiry date, are specified in Details of Multi-Year Appropriations in the Estimates and Supplementary Estimates for relevant Votes.
• Permanent Appropriations (sometimes referred to as permanent legislative authorities or PLAs) -Permanent appropriations are authorised by legislation other than an Appropriation Act and continue in effect until revoked by Parliament. Generally the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations that with limits set in cash terms, section 11(2) of the Public Finance Act 1989 requires that they be reported on an accrual basis. The usual legislative wording allows for expenses or capital expenditure to be incurred for the purpose specified in the legislation “without further appropriation than this section”. Details of permanent appropriations are included in Details of Annual and Permanent Appropriations in the Estimates and Supplementary Estimates for each Vote for completeness, though the amount specified is a forecast rather than a limit. The amounts of permanent appropriations are therefore not shown in bold type. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Guide to Reading Information Supporting theEstimates#

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

1 Sector Overview Information

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

2 Performance Information Relating to Appropriations in Each Vote#

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

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

Part 1 - Summary of the Vote

The Summary of the Vote comprises:

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

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

Part 2 - Details and Expected Performance for Output Expenses#

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

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

Part 3 - Details for Benefits and Other Unrequited Expenses#

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

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

Part 4 - Details for Borrowing Expenses#

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

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

Part 5 - Details and Expected Results for Other Expenses#

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Part 5 provides detail about appropriations for:

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

Part 6 - Details and Expectations of Capital Expenditure#

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This Part provides further details about appropriations for capital expenditure.

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

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

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

3 Statement of Forecast Service Performance of Departments#

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

4 Forecast Financial Statements of Departments#

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

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

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

5 Statements of Intent of Departments#

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

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

Terms and Definitions#

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

Useful Links#

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

Ministerial Statement of Responsibility#

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I am satisfied that the information on future operating intentions provided by my department and included in the Information Supporting the Estimates for the Health Sector is in accordance with sections 38, 40 and 41 of the Public Finance Act 1989 and is consistent with the policies and performance expectations of the government.

Chief Executive Statement of Responsibility#

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Ministry of Health

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

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MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Health (M36)

ADMINISTERING DEPARTMENT: Ministry of Health

MINISTER RESPONSIBLE FOR MINISTRY OF HEALTH: Minister of Health

Part 1 - Summary of the Vote

Part 1.1 - Overview of the Vote

Overview of the Vote

The Minister of Health is responsible for appropriations in the Vote for the 2010/11 financial year totalling just under $13,574 million, an increase of $858 million or 6.7% from 2009/10 (Supplementary Estimates) and covering the following.

Departmental Operating Appropriations

A total of just over $216 million (1.6% of the Vote) relates to the functions of the Ministry of Health for: policy advice, administering the purchasing of national health services, performance monitoring of the funders and providers of health and disability services, developing and administering legislation and regulations related to health service facilities, providers and public safety, ministerial servicing, and information services.

Non-Departmental Operating Appropriations

A total of nearly $12,847 million (94.6% of the Vote) is for operating expenses to be incurred on behalf of the Crown and is intended to be spent as follows.

Output Expenses

These total nearly $12,815 million (94.4% of the Vote) and are to fund the purchases of health services as follows:

• Just over $10,044 million (74.0% of the Vote) to fund health services from DHBs through the DHB appropriations.
• Just over $970 million (7.1% of the Vote) to purchase national disability support services.
• Just over $517 million (3.8% of the Vote) to purchase public health services.
• Just over $905 million (6.7% of the Vote) to purchase national health services and provide clinical training for health professionals.
• Nearly $20 million (0.1% of the Vote) to manage health sector risks.
• $95 million (0.7% of the Vote) for a provision for DHB deficit support.
• Just over $182 million (1.4% of the Vote) to purchase primary health care services.
• Just over $83 million (0.6% of the Vote) to fund other health and disability services.

Other Expenses Incurred by the Crown

A total of nearly $32 million (0.2% of the Vote) is for other expenses to fund provider development, legal expenses and international health obligations including World Health Organisation (WHO) membership.

Capital Expenditure

A total of nearly $511 million (3.8% of the Vote) is to provide capital funding and will be spent as follows:

• Nearly $478 million (3.5 % of the Vote) is to provide debt or equity for District Health Boards (DHBs) or Health Sector Crown Agencies to cover new investments or for other purposes agreed by the Crown including balance sheet restructuring, or to invest in specific health sector assets.
• $15 million (0.1% of the Vote) is to provide interest-free loans to assist people in long term care.
• Just over $18 million (0.1% of the Vote) is to purchase or develop assets for use by the Ministry of Health.

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

Part 1.2 - High-Level Objectives of the Vote#

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Government Priorities and Outcomes - Links to Appropriations

The Ministry appropriations contribute to the Government's outcomes impacts and objectives as described in the Statement of Intent.

Part 1.3 - Trends in the Vote#

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Summary of Financial Activity

New Policy Initiatives

$512 million of New Initiatives

The Budget 2010 Vote Health package totals $512 million in new operating and capital initiatives in 2010/11. Over the forecast period, total operating and capital initiatives amount to $2.120 billion, of which $1.400 billion is going directly to DHBs for cost and demographic pressures. Vote Health's Budget 2010 package is funded with $420 million per year of ongoing operating funding from the Government's operating allowance, re-prioritised savings (as shown above) and time-limited funding from Vote Health's 2008/09 operating and capital underspends.

Analysis of Significant Trends

Total Vote: All Appropriations

The graph below shows that in 2010/11, Vote Health appropriations total $13,574 million, an increase of $858 million or 6.7% over the previous year.

Trends in total vote and actual expenses

Source: Ministry of Health

Departmental Output Expenses

Departmental Output Expenses

Source: Ministry of Health

The impacts of Budget policy initiatives from earlier Budgets on individual departmental output expense appropriations are detailed in Part 2.1.

Non-Departmental Output Expenses

Non-Departmental Output Expenses

Source: Ministry of Health

The increase in non-departmental output expenses in 2010/11 is due to additional funding provided for new initiatives in Budget 2010 as shown in the Budget Policy Initiatives table above, and the rephasing of expenditure for various programmes between years.

The impacts of Budget policy initiatives from earlier Budgets on individual departmental output expense appropriations are detailed in Part 2.2.

Non-Departmental Other Expenses

The non-departmental other expenses comprise around 0.2% of Vote Health and provide funding for provider development, to defend the Crown in legal claims, fund legal settlements and contribute to various international health organisations eg, the World Health Organisation.

The impact of Budget policy initiatives from earlier Budgets on individual departmental other expense appropriations are detailed in Part 5.

Departmental Capital

Further details are provided in Part 6.1.

Non-Departmental Capital

Non-Departmental Capital

Source: Ministry of Health

In 2010/11, these appropriations are largely being used to provide equity and debt for District Health Boards to develop or purchase capital assets.

Significant appropriations existed up until 2007/08 to rollover existing Crown loans held by DHBs (ie, on the basis these loans were repaid then redrawn) or refinance private sector loans held by DHBs with Crown debt.

A decision in July 2007 to extend the criteria whereby existing Crown debt could be renewed for longer terms meant appropriations are no longer required to rollover loans in 2007/08 or 2008/09 (the $392 million initially provided for this purpose in 2007/08 was returned to the Crown).

The following table details the funding for capital projects, the refinancing and rollover of existing loans held by DHBs and other capital funding requirements since 2005/06:

Actual and estimated capital expenditure by funding stream

Part 1.4 - Reconciliation of Changes in Appropriation Structure#

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

Part 2 - Details and Expected Performance for Output Expenses#

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Part 2.1 - Departmental Output Expenses

Intended Impacts, Outcomes and Objectives

Information and Payment Services MCOA (M36)

Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

These two output expenses under this MCOA are grouped together as sector focused services and in anticipation of decisions arising out of the Ministerial Review Group. Both of these outputs form the basis of a shared service to support the health and disability system. A shared service approach will support a more unified approach that will lead to more efficient systems to reduce costs and maximise information sharing. This grouping provides a high level of transparency for these functions.

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation was established in 2010/11 to better align Vote Health's appropriations with recent changes in the role and functions of the Ministry of Health.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Regulatory and Health Emergency Response MCOA (M36)#

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Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

These three output expenses under this MCOA contribute to the Ministry's outcome of protecting and promoting good health and ensuring trust and confidence in the health and disability system by ensuring compliance with the regulatory framework; threats to the health and wellbeing of New Zealanders are identified; and appropriately managed and advisory committees supporting the Minister are maintained. This grouping better aligns these output expenses with the Ministry's outcomes and enhances transparency and accountability.

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation was established in 2010/11 to better align Vote Health's appropriations with recent changes in the role and functions of the Ministry of Health.

Output Performance Measures and Standards

Memorandum Account

Current and Past Policy Initiatives

Sector Leadership and Services MCOA (M36)#

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Scope of Appropriation

Explanation for Use of Multi-Class Output Expense Appropriation

These two output expenses under this MCOA include the functions being undertaken by the newly formed National Health Board and its Business Unit. Grouping these output expenses recognises the alignment of these functions and provides a greater degree of transparency around the government's decision to create a National Health Board.

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation was established in 2010/11 to better align Vote Health's appropriations with recent changes in the role and functions of the Ministry of Health.

Output Performance Measures and Standards

Current and Past Policy Initiatives

Strategy, Policy and System Performance (M36)#

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Scope of Appropriation

Expenses and Revenue

Reasons for Change in Appropriation

This appropriation decreases by $16 million in 2010/11 due to the realignment of departmental expenditure appropriations to the recent changes in the roles and functions in the Ministry of Health.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Ministry of Health Quality Standards for Policy Advice

This Quality Standard for Policy Advice sets out the characteristics and dimensions of policy advice that will best enable policy advice to promote well-informed high-quality decision-making by Ministers.

Judgements are required to apply and balance the quality dimensions to ensure the advice is fit-for-purpose in achieving the result sought.

Rigorous analysis

Relevant frameworks

• Appropriate analytical frameworks are used, and knowledge is up to date and informed by recent thinking and literature in the field.
• Assumptions behind the frameworks used are explicit and consideration has been given to how they will be expected to play out in the real world.
• Consideration has been given to less traditional frameworks and whether they would add innovative or useful perspectives.

Robust reasoning and logic

• Advice has a clear purpose, problem definition, evaluation of options against criteria, and assessment of risks and opportunities.
• There is a clear conclusion and action-oriented recommendations.

Evidence-based

• Analysis is supported by relevant evidence: empirical methods are sound, data gaps are identified and the level of confidence/certainty in our empirical base is explicit.
• New Zealand experience of current and past policy interventions is drawn on and, where relevant, the experience of other countries.
• Best judgement is given despite any acknowledged data imperfections.

Free and frank

• Advice is honest, impartial and politically neutral - the Ministry has a duty to alert the Minister to the possible consequences of following particular policies, whether or not such advice accords with Ministers' views.
• Good free and frank advice is offered with an understanding of its political context and the constraints within which the Minister is operating.

Strategic context

Strategic

• Advice is set in the context of the Ministry's results and informed by a strategic view about what is important.
• Advice is explicit about the relative importance and materiality of the issue, in fiscal, economic and strategic terms.
• Connections across policy issues are made.
• Advice considers the long-term implications of decisions and provides a perspective that goes beyond immediate impacts.

Practical

• Issues of implementation, technical feasibility, practicality and timing are considered and advice accurately identifies compliance, transitional, legislative, funding, administrative implications and costs.

Advice

Clear

• Advice is compellingly presented, brief and concise - key messages should be readily apparent to the reader.
• Easy to read - has a clear and logical structure, avoids technical jargon and uses visual devices such as charts and tables where possible.
• Pitched to suit the target audience - uses appropriate language, style and level of detail.
• Fits with previous advice and communications with the Minister.

Timely

• Reports should meet Ministers' need for advice that helps in the decision-making process (even if it means, at times, that advice is not fully developed), and indicates when a decision is required.

Politically aware

• Advice demonstrates awareness of the wider environment and political situation.
• Is based on a clear understanding of the desired outcomes of the Minister/Government.
• Relates to the perspectives of the Minister, even if suggesting something that tests their perspectives.
• Recognises choices and constraints Ministers face, and includes a range of options to address these.

Solution focused

• Advice is proactive, anticipating, and responds to Ministers' needs.
• Advice suggests a clear way forward and includes a range of practical options.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Part 2.2 - Non-Departmental Output Expenses#

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Intended Impacts, Outcomes and Objectives

Crown Health Financing Agency (M36)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

There will be no change in this appropriation in 2010/11.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Auckland DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Bay of Plenty DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Canterbury DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Capital and Coast DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Counties-Manukau DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Hawkes Bay DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Hutt DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Lakes DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - MidCentral DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Nelson-Marlborough DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Northland DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Otago DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The funding for the Otago DHB has been transferred to the newly established Southern DHB.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - South Canterbury DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Southern DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The Southern DHB was formed from the amalgamation of the Otago and Southland DHBs with effect from 1 May 2010.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Southland DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The funding for the Southland DHB has been transferred to the newly established Southern DHB.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Tairawhiti DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Taranaki DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Waikato DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Wairarapa DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Waitemata DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - West Coast DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health and Disability Support Services - Whanganui DHB (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

The performance measures are those contained in the Crown entity's Statement of Intent.

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health Services Funding (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health Workforce Training and Development (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Meningococcal Vaccine Programme (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Monitoring and Protecting Health and Disability Consumer Interests (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Advisory and Support Services (M36)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Conditions on Use of Appropriation

National Child Health Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Note 1 - The estimated eligible population is based on the number of live births (62,540) in the year ended December 2009.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Contracted Services - Other (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Note 1 - InterRAI is a collaborative network of researchers in over 30 countries committed to improving health care for persons who are elderly, frail, or disabled.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Disability Support Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Elective Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Emergency Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Maori Health Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Maternity Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Note 1 - The estimated eligible population is based on the number of live births (62,540) in the year ended December 2009.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

National Mental Health Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Primary Health Care Strategy (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Problem Gambling Services (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The appropriation reflects the expected expenditure profile on problem gambling services during the three-year programme (2007/08 to 2009/10) and the next three-year programme (2010/11 to 2012/13) on which the present gambling levy has been assessed.

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Public Health Service Purchasing (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from changes in funding arising from the current and past policy initiatives scheduled below.

Output Performance Measures and Standards

Note 1 - The estimated actual standard is for the number of women screened over a three-year period.

Note 2 - Based on a projection from the 2001 Census for eligible women aged 20-69 years (hysterectomy adjusted). Work is underway to update population data based on the 2006 Census, which may impact on reporting for 2011.

Note 3 - Provider performance for women aged 45-49 years is not subject to targets. This is because there is insufficient international data from which to derive targets for biennial screening of women under 50 years.

Note 4 - The eligible women population is based on projections from the 2001 Census. Work is currently underway to update population data based on the 2006 Census, which may impact on reporting for 2011.

Note 5 - The estimated eligible population is based on the number of live births (62,540) in the year ended December 2009.

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Scientific Advice to Support Pest Management Strategies as They Affect Public Health (M36)#

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Scope of Appropriation

Expenses

Output Performance Measures and Standards

Conditions on Use of Appropriation

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Summary of Service Providers for Non-Departmental Outputs#

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The following table summarises the resources to be allocated through Vote Health 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.

 

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

Part 5 - Details and Expected Results for Other Expenses#

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Part 5.2 - Non-Departmental Other Expenses

Intended Impacts, Outcomes and Objectives

International Health Organisations (M36)

Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from Current and Past Policy Initiative funding changes (see table below).

Expected Results

Current and Past Policy Initiatives

Legal Expenses (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

Expected Results

Provider Development (M36)#

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Scope of Appropriation

Expenses

Reasons for Change in Appropriation

The change in this appropriation arises from Current and Past Policy Initiative funding changes (see table below).

Expected Results

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Reporting Mechanisms#

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

Part 6 - Details and Expected Results for Capital Expenditure#

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Part 6.1 - Departmental Capital Expenditure

Intended Impacts, Outcomes and Objectives

Ministry of Health - Capital Expenditure PLA (M36)

Scope of Appropriation

Capital Expenditure

This appropriation is to maintain and enhance the Ministry's infrastructure so it can support its own operations and those of the wider Health sector.

Reasons for Change in Appropriation

The appropriation is consistent with the previous year.

Part 6.2 - Non-Departmental Capital Expenditure#

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Intended Impacts, Outcomes and Objectives

Deficit Support for DHBs (M36)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

Funding for Deficit Support for DHBs in 2010/11 will be transferred from operational funding during the year.

Expected Results

Equity for Capital Projects for DHBs and Health Sector Crown Agencies (M36)#

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Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The $329 million increase in appropriation arises from Current and past policy initiative changes (see table below), fiscally neutral transfers to other appropriations and rephasing of the expenditure through expense transfers.

Expected Results

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or the current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Health Sector Projects (M36)#

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Scope of Appropriation

Capital Expenditure

Expected Results

Loans for Capital Projects (M36)#

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Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The funding for capital projects and balance sheet reconfiguration in the Health sector is generally appropriated in the first instance to the 'Equity for Capital Projects for DHBs and Health Sector Crown Entities' capital appropriation. Once the DHB's or Health Sector Crown Entities' preference for debt for particular requirements (in full or part) is established and approved, the necessary funds are transferred to this appropriation so they can be drawn down.

Expected Results

Current and Past Policy Initiatives

These policy initiatives have been shown against their original appropriation, or the current equivalent. Subsequent changes may have been made to some of these initiatives by way of fiscally neutral transfers to other appropriations, devolution of funding to DHBs or rephasing of the expenditure through expense transfers.

Residential Care Loans (M36)#

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Scope of Appropriation

Capital Expenditure

Expected Results

Reporting Mechanisms#

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

Statement of Forecast Service Performance#

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The Statement of Forecast Service Performance of the department included in the Health Sector comprises the service performance information for all departmental output expense appropriations that are proposed to be used by that department. In this context, service performance information comprises the scope, expenses and revenue, and output performance measures and standards for each class of outputs within those departmental appropriations, as set out in Part 2.1 of the Performance Information for appropriations in the Vote.

The following table identifies the classes of outputs incorporated in the Statement of Forecast Service Performance for the department in the Health Sector.

Statement of Common Accounting Policies#

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These accounting policies have been applied in the forecast financial statements of all departments and Offices of Parliament except as outlined in the statement of entity-specific accounting policies for individual departments or Offices of Parliament.

These forecast financial statements are prepared in accordance with section 41(1)(a)-(f) of the Public Finance Act 1989. The purpose of the forecast financial statements is to facilitate Parliament's consideration of appropriations for, and planned performance of, departments and offices of Parliament. Use of this information for other purposes may not be appropriate. It is not intended that these forecast financial statements be updated subsequent to publication.

Statement of Compliance

These forecast financial statements for the year ended 30 June 2010 comply with FRS-42 Prospective Financial Statements.

Specific Accounting Policies#

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The accounting policies set out below have been applied consistently to all periods presented in these statements. These statements have been prepared on a going-concern basis. The measurement base applied is historical cost modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars, which is the entity's functional currency. All financial information presented has been rounded to the nearest thousand.

Judgements and Estimations

The preparation of forecast financial statements in conformity with FRS-42 requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and these variations may be material.

Revenue

Revenue is derived through the provision of outputs to the Crown and from services to third parties. Revenue is recognised in the forecast statement of financial performance when earned.

Leases

Operating Leases

Where substantially all of the risks and rewards of ownership are retained by the lessor, leases are classified as operating leases.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

Finance Leases

Leases which effectively transfer to the department substantially all the risks and rewards incidental to ownership of the leased items are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and the corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the department is expected to benefit from their use. The interest expense component of finance lease payments is recognised in the statement of financial performance.

Borrowing Costs

Borrowing costs are recognised as an expense when incurred.

Property, Plant and Equipment

Property, plant and equipment, other than land and buildings, is stated at cost less accumulated depreciation and impairment losses. Land and buildings are stated at fair value as determined by an independent registered valuer. Fair value is determined using market-based evidence. Land and buildings are revalued with sufficient regularity to ensure that carrying value is not materially different from fair value at the end of the reporting period. Additions between revaluations are recorded at cost. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Depreciation

Depreciation is provided on a straight-line basis so as to allocate the cost (or valuation) of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Intangible Assets

Intangible assets with finite useful lives (such as computer software) are recorded at cost less accumulated amortisation and impairment losses. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Amortisation is charged to the statement of financial performance on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Intangible assets with indefinite useful lives are not amortised, but are tested at least annually for impairment. Where there is an active market for an intangible asset, the asset is recorded at a revalued amount, being fair value less any subsequent accumulated amortisation and accumulated impairment losses.

Cash and Cash Equivalents

Cash includes cash on hand and funds on deposit with banks with an original maturity of 3 months or less.

Debtors and Other Receivables

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment charges. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired.

Inventories

Inventories held for sale or use in the production of goods and services on a commercial basis are recorded at the lower of cost and net realisable value. The cost of purchased inventory is determined using the weighted average cost method.

Inventories held for distribution for public benefit purposes are recorded at cost (calculated using the weighted average cost method) adjusted when applicable for any loss of service potential. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at the date of acquisition.

Employee Entitlements

Pension Liabilities

Obligations for contributions to defined contribution retirement plans are recognised in the statement of financial performance as they fall due.

Other Employee Entitlements

Employee entitlements to salaries and wages, annual leave, sick leave, long service leave, retiring leave and other similar benefits are recognised in the statement of financial performance when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Long-term employee entitlements are reported at the present value of the estimated future cash outflows.

Termination Benefits

Termination benefits are recognised in the statement of financial performance only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits to be settled within 12 months are reported at the amount expected to be paid. Other termination benefits are reported at the present value of the estimated future cash outflows.

Onerous Contracts

Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the obligation under the contract, a provision is recognised. The provision is stated at the present value of the future net cash outflows expected to be incurred in respect of the contract.

Foreign Currency

Foreign currency transactions are reported at the New Zealand dollar exchange rate at the date of the transaction.

Statement of Cash Flows

The following are definitions of the terms used in the statement of cash flows:

• cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with an original maturity of no more than three months
• investing activities are those activities relating to the acquisition and disposal of non-current assets
• financing activities comprise capital injections by, or repayment of capital to, the Crown, and
• operating activities include all transactions and other events that are not investing or financing activities.

Taxation

Departments and Offices of Parliament are exempt from income tax as public authorities. Accordingly no charge for income tax has been provided for.

Goods and Services Tax

These forecast financial statements are GST exclusive, except for receivables and payables in the statement of financial position, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST owing to or from the Inland Revenue Department at balance date is included as part of receivables or payables (as appropriate) in the statement of financial position.

Commitments

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities and Contingent Assets

Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.

Changes in Accounting Policies#

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Any changes in accounting policies since the date of the last audited financial statements prepared under New Zealand generally accepted accounting practice are described in the statement of entity-specific accounting policies. The last audited financial statements (30 June 2009) were prepared in accordance with NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards) as appropriate for public benefit entities.

Forecast Financial Statements Ministry of Health#

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Statement of Forecast Comprehensive Income for the year ending 30 June 2011

Statement of Forecast Changes in Taxpayers' Funds for the year ending 30 June 2011#

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Forecast Statement of Financial Position as at 30 June 2011#

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Statement of Forecast Cash Flows for the year ending 30 June 2011#

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Statement of Significant Assumptions#

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These forecast financial statements have been compiled on the basis of existing government policies and Ministerial expectations at the time the statements were finalised.

The main assumptions are as follows:

• The Ministry's activities will remain substantially the same as for the previous year.
• Operating costs are based on historical experience. The general historical pattern is expected to continue.
• Estimated year end information for 2009/10 is used as the opening position for the 2010/11 forecasts.

These assumptions are adopted as at 21 April 2010.

Factors that could lead to material differences between the forecast financial statements and the 2008/09 actual financial statements include:

• Changes to the baseline budget through new initiatives, or technical adjustments.

Statement of Entity-Specific Accounting Policies#

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Department - Specific Accounting Policies

The Ministry of Health has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of Ministry of Health, prepared in accordance with section 38 of the Public Finance Act 1989.

Ministry of Health is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Ministry of Health is a public benefit entity.

Statement of Entity Specific Accounting Policies

Depreciation

Depreciation is charged on a straight-line basis at rates calculated to allocate the cost or valuation of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life. Typically, the estimated useful lives of different classes of property, plant and equipment.

Intangible assets

Intangible assets with finite lives are subsequently recorded at cost less any amortization and impairment losses. Amortisation is charged to the Statement of Financial Performance on a straightline basis over the useful life of the asset. Typically, the estimated useful lives of these assets are as follows:

Cost allocation

Direct costs are those costs directly attributed to an output. Indirect costs are those costs that cannot be identified in an economically feasible manner with any one specific output.

Direct costs are charged directly to outputs while indirect costs are charged to outputs based on the level of activity associated with relevant cost drivers.

Depreciation is charged to Business Units on the basis of asset utilisation with the balance being charged as indirect costs. Direct personnel costs are allocated to the output expenses with the balance being charged as indirect costs.

Statement of Entity-Specific Accounting Policies#

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The Ministry of Health has applied the accounting policies set out in Statement of Accounting Policies Standard included in this document, except as stated below.

Reporting Entity

These are the prospective financial statements of Ministry of Health, prepared in accordance with section 38 of the Public Finance Act 1989.

Ministry of Health is a Government Department as defined by section 2 of the Public Finance Act 1989. For the purposes of financial reporting Ministry of Health is a public benefit entity.

Authorisation Statement

These forecast financial statements for the year ended 30 June 2011 comply with FRS-42 Prospective Financial Statements.

Specific Accounting Policies

The accounting policies set out below have been applied consistently to all periods presented in these statements. These statements have been prepared on a going-concern basis. The measurement base applied is historical cost modified by the revaluation of certain assets and liabilities as identified in this statement of accounting policies.

The accrual basis of accounting has been used unless otherwise stated. These financial statements are presented in New Zealand dollars, which is the entity's functional currency. All financial information presented has been rounded to the nearest thousand.

Judgements and Estimations

The preparation of forecast financial statements in conformity with FRS-42 requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and these variations may be material.

Leases

Operating Leases

Where substantially all of the risks and rewards of ownership are retained by the lessor, leases are classified as operating leases.

Lease payments under operating leases are recognised as an expense on a straight-line basis over the lease term.

Finance Leases

Leases which effectively transfer to the department substantially all the risks and rewards incidental to ownership of the leased items are classified as finance leases. These are capitalised at the lower of the fair value of the asset or the present value of the minimum lease payments. The leased assets and the corresponding lease liabilities are recognised in the statement of financial position. The leased assets are depreciated over the period the department is expected to benefit from their use. The interest expense component of finance lease payments is recognised in the statement of financial performance.

Borrowing Costs

Borrowing costs are recognised as an expense when incurred.

Property, Plant and Equipment

Property, plant and equipment, other than land and buildings, is stated at cost less accumulated depreciation and impairment losses. Land and buildings are stated at fair value as determined by an independent registered valuer. Fair value is determined using market-based evidence. Land and buildings are revalued with sufficient regularity to ensure that carrying value is not materially different from fair value at the end of the reporting period. Additions between revaluations are recorded at cost. Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Depreciation

Depreciation is provided on a straight-line basis so as to allocate the cost [or valuation] of an item of property, plant and equipment, less any estimated residual value, over its estimated useful life.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Leasehold improvements are capitalised and the cost is amortised over the unexpired period of the lease or the estimated useful life of the improvements, whichever is shorter.

Items under construction are not depreciated. The total cost of a capital project is transferred to the appropriate asset class on its completion and then depreciated.

Intangible Assets

Intangible assets with finite useful lives (such as computer software) are recorded at cost less accumulated amortisation and impairment losses.

Any capitalisation thresholds applied are set out in the statement of entity-specific accounting policies.

Amortisation is charged to the statement of financial performance on a straight-line basis over the estimated useful life of the asset.

The estimated useful lives are set out in the statement of entity-specific accounting policies.

Intangible assets with indefinite useful lives are not amortised, but are tested at least annually for impairment.

Where there is an active market for an intangible asset, the asset is recorded at a revalued amount, being fair value less any subsequent accumulated amortisation and accumulated impairment losses.

Cash and Cash Equivalents

Cash includes cash on hand and funds on deposit with banks with a maturity of 3 months or less from date of acquisition.

Debtors and Other Receivables

Debtors and other receivables are initially measured at fair value and subsequently measured at amortised cost using the effective interest rate, less impairment charges. Allowances for estimated irrecoverable amounts are recognised when there is objective evidence that the asset is impaired.

Inventories

Inventories held for sale or use in the production of goods and services on a commercial basis are recorded at the lower of cost and net realisable value. The cost of purchased inventory is determined using the weighted average cost method.

Inventories held for distribution for public benefit purposes are recorded at cost (calculated using the weighted average cost method) adjusted when applicable for any loss of service potential. Where inventories are acquired at no cost, or for nominal consideration, the cost is the current replacement cost at the date of acquisition.

Employee Entitlements

Pension Liabilities

Obligations for contributions to defined contribution retirement plans are recognised in the statement of financial performance as they fall due.

Other Employee Entitlements

Employee entitlements to salaries and wages, annual leave, sick leave, long service leave, retiring leave and other similar benefits are recognised in the statement of financial performance when they accrue to employees. Employee entitlements to be settled within 12 months are reported at the amount expected to be paid. Long-term employee entitlements are reported at the present value of the estimated future cash outflows.

Termination Benefits

Termination benefits are recognised in the statement of financial performance only when there is a demonstrable commitment to either terminate employment prior to normal retirement date or to provide such benefits as a result of an offer to encourage voluntary redundancy. Termination benefits to be settled within 12 months are reported at the amount expected to be paid. Other termination benefits are reported at the present value of the estimated future cash outflows.

Onerous Contracts

Where the benefits to be derived from a contract are lower than the unavoidable costs of meeting the obligation under the contract, a provision is recognised. The provision is stated at the present value of the future net cash outflows expected to be incurred in respect of the contract.

Foreign Currency

Foreign currency transactions are reported at the New Zealand dollar exchange rate at the date of the transaction.

Statement of Cash Flows

The following are definitions of the terms used in the statement of cash flows:

• cash and cash equivalents include cash on hand, cash in transit, bank accounts and deposits with a maturity of no more than three months from date of acquisition
• investing activities are those activities relating to the acquisition and disposal of non-current assets
• financing activities comprise capital injections by, or repayment of capital to, the Crown, and
• operating activities include all transactions and other events that are not investing or financing activities.

Taxation

Departments and Offices of Parliament are exempt from income tax as public authorities. Accordingly no charge for income tax has been provided for.

Goods and Services Tax

These forecast financial statements are GST exclusive, except for receivables and payables in the statement of financial position, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, then it is recognised as part of the related asset or expense.

The net amount of GST owing to or from the Inland Revenue Department at balance date is included as part of receivables or payables (as appropriate) in the statement of financial position.

Commitments

Future expenses and liabilities to be incurred on contracts that have been entered into at balance date are disclosed as commitments to the extent that there are equally unperformed obligations.

Contingent Liabilities and Contingent Assets

Contingent liabilities are disclosed if the possibility that they will crystallise is not remote. Contingent assets are disclosed if it is probable that the benefits will be realised.

Changes in Accounting Policies#

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Any changes in accounting policies since the date of the last audited financial statements prepared under New Zealand generally accepted accounting practice are described in the statement of entity-specific accounting policies. The last audited financial statements (30 June 2009) were prepared in accordance with NZ IFRS (New Zealand Equivalents to International Financial Reporting Standards) as appropriate for public benefit entities.

Notes to the Financial Statements#

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Note 1 - Revenue - Other

Note 2 - Operating Expenses#

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Note 3 - Debtors and Other Receivables#

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Note 4 - Reconciliation of Net Surplus to Net Cashflows from Operating Activities#

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Note 5 - Property, Plant and Equipment#

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Note 6 - Intangible Assets#

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Purpose of Information Supporting the Estimates#

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

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

The Information Supporting the Estimates is organised into 10 volumes by sector, each of which covers one or more Votes. The scope of each sector and the allocation of Votes to a sector reflect a balancing of three desired characteristics - namely that each volume should, where possible:

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

The number of sectors and coverage of each sector was set in consultation with the Finance and Expenditure Committee. The 10 sectors are:

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