The Supplementary Estimates of Appropriations & Supporting Information 2013/14

The Supplementary Estimates outlines the additional expenses and capital expenditure required for the financial year about to end. The Supporting Information provides reasons for the changes to appropriations during the year, related changes in performance information and certain additional performance information for new appropriations.

Chapters of the Supplementary Estimates of Appropriations and Supporting Information 2013/14 are available in Adobe PDF and HTML.

Using PDF Files

Contents#

Introduction#

Purpose of the Supplementary Estimates of Appropriations and Supporting Information
Purpose and Nature of Appropriations
Types of Crown Revenue and Capital Receipts
Types of Movements in Departmental Net Asset Balances
Guide to Reading the Supplementary Estimates of Appropriations and Supporting Information
Useful Links
Terms and Definitions

Votes and Supporting Information#

Arts, Culture and Heritage

Attorney-General

Audit

Canterbury Earthquake Recovery

Commerce

Communications

Communications Security and Intelligence

Conservation

Consumer Affairs

Corrections

Courts

Customs

Defence

Defence Force

Economic Development

Education

Education Review Office

Employment

Energy

Environment

Finance

Food Safety

Foreign Affairs and Trade

Health

Housing

Immigration

Internal Affairs

Justice

Labour

Lands

Māori Affairs

Office of the Clerk

Official Development Assistance

Ombudsmen

Pacific Island Affairs

Parliamentary Commissioner for the Environment

Parliamentary Counsel

Parliamentary Service

Police

Primary Industries

Prime Minister and Cabinet

Revenue

Science and Innovation

Security Intelligence

Serious Fraud

Social Development

Sport and Recreation

State Services

Statistics

Tertiary Education

Tourism

Transport

Treaty Negotiations

Veterans' Affairs - Social Development

Women's Affairs

Introduction#

Purpose of the Supplementary Estimates of Appropriations and Supporting Information#

The Supplementary Estimates of Appropriations and Supporting Information (the Supplementary Estimates) provides members of Parliament with details of the terms of changes to existing appropriations and of new appropriations proposed since the Estimates for 2013/14 were finalised. The SupplementaryEstimates also shows proposed changes to departmental net asset balances.

While many of the appropriation and net asset balance changes will have already been given effect through the advance authority of Imprest Supply, they must still be appropriated or confirmed in an Appropriation Act for the current financial year.

The Supplementary Estimates is presented to the House of Representatives at the same time as the Government introduces a second or subsequent Appropriation Bill for the current financial year.

Purpose and Nature of Appropriations#

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

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

Limits Created by Appropriations#

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

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

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

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

Responsibility for Appropriations#

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

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

Types of Appropriation#

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

Types of Appropriation Table
Appropriation Type	Transaction Status	Description
Output Expenses	Departmental	Authorises expenses to be incurred by a department or an Office of Parliament in supplying a specified category of outputs (goods and services).
	Non-Departmental	Authorises expenses to be incurred by the Crown (excluding departments) in purchasing a specified category of outputs (goods and services) from Crown entities or other third parties.
Benefits and Other Unrequited Expenses	Non-Departmental	Authorises expenses to be incurred by the Crown (excluding departments) in transferring resources (generally to individuals for their personal benefit) for which the Crown receives nothing directly in return. (From 1 July 2014 this appropriation type is renamed Benefits or Related Expenses.) Examples include the Jobseeker Support and Emergency Benefit, Student Allowances and various scholarships and awards.
Borrowing Expenses	Departmental	Authorises the incurring of interest or other financing expenses for loans made to a department or an Office of Parliament, or public securities (undertakings that represent part of the public debt) issued by a department or an Office of Parliament. In practice, limitations on the rights of departments to borrow or issue securities and limitations on how Offices of Parliament can be funded mean that this type of appropriation is unlikely to be used.
	Non-Departmental	Authorises the incurring of interest or other financing expenses for loans made to the Crown (excluding departments), or public securities (undertakings that represent part of the public debt) issued by the Crown. Crown debt management is centralised, which means that most debt-servicing expenses appear in Vote Finance.
Other Expenses	Departmental	Authorises expenses to be incurred by a department or an Office of Parliament that are not either output expenses or borrowing expenses. Other expenses should be used only for events that cannot be related back to output production, such as redundancy costs arising from a government decision to cease purchasing certain types of outputs, or a loss on sale of assets made surplus by departmental restructuring.
	Non-Departmental	Authorises expenses to be incurred by the Crown (excluding departments) that are not structured or managed as output expenses, benefits and other unrequited expenses, or borrowing expenses. Other expenses is the residual appropriation type, which should not be used where an appropriation could be better classified or managed as one of the other appropriation types (eg, as output expenses). Examples include disposal of an asset for less than market value, grants to community organisations, subscriptions for membership of international bodies and remuneration of independent statutory officers.
Capital expenditure	Departmental	Authorises capital expenditure to be incurred by a department or an Office of Parliament to acquire or develop assets for the use of the department.
	Non-Departmental	Authorises capital expenditure to be incurred by the Crown (excluding departments) to acquire or develop Crown assets, including the purchase of equity, or making a loan to a person or organisation that is not a department.
Expenses or Capital Expenditure Incurred by an Intelligence and Security Department	Departmental	Authorises both expenses and capital expenditure to be incurred by the New Zealand Security Intelligence Service or the Government Communications Security Bureau.
Multi-Category Appropriations (MCA)	Departmental or Non-Departmental	The 2013 amendments to the PFA provided for this new type of appropriation. An MCA allows separate categories of departmental output expenses, non-departmental output expenses, departmental other expenses, non-departmental other expenses, or non-departmental capital expenditure to be grouped together in one appropriation provided all the categories contribute to a single overarching purpose.

Types of Output Expense Appropriations#

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

Types of Output Expense Appropriations Table
Output Expense Appropriation Type and Authority	Description, Constraints on Form and Typical Application
Standard Output Expense Appropriation (section 7(1)(a), Public Finance Act 1989)	Departmental or non-departmental: Authorises a department or an Office of Parliament to incur expenses in supplying a specified class of outputs (goods and services), or the Crown (excluding departments) to incur expenses to purchase a specified class of outputs. Annual or multi-year: The authority lapses at the end of the financial year or multi-year period specified. Single output class only: The scope is limited to a single class of outputs (defined as a grouping of similar outputs). Amount limited by Appropriation Act: The amount of a standard output expense appropriation is limited to a set amount of New Zealand dollars specified in an Appropriation Act. Typical application: The normal or default form for an output expense appropriation, used for a wide range of outputs for which the flexibility offered by the other types of output expense appropriation is not required.
Multi-Class Output Expense Appropriation (MCOA) (section 7(3)(b), Public Finance Act 1989)	Departmental or non-departmental: Authorises a department or an Office of Parliament to incur expenses in supplying more than one specified class of outputs (goods and services), or the Crown (excluding departments) to incur expenses to purchase more than one specified class of outputs. A proposed MCOA must be approved by the Minister of Finance before it is presented in the Estimates. The information supporting the Estimates must explain why the Minister has allowed those classes of outputs to be grouped in one appropriation. Annual or multi-year: The authority lapses at the end of the financial year or multi-year period specified. Multiple output classes: The scope of an MCOA is determined by the combined scope of each of the output classes included in that appropriation. Amount limited by Appropriation Act: The amount of an MCOA is limited to a set amount of New Zealand dollars specified in an Appropriation Act. The amount of expense that can be incurred in relation to each component output class is flexible within the total amount of the MCOA, although expenses must be separately forecast and reported for each individual class in the Estimates, Information Supporting the Estimates and the department's annual report. Typical application: An MCOA is used where it is appropriate to give the Minister or department ongoing discretion over the output mix across two or more classes of outputs. Such discretion will most commonly be sought where the output classes contribute to a common outcome, or use a common or closely related set of inputs or processes, and the circumstances that determine the appropriate output choice or mix are likely to vary during the appropriation period. All MCOAs expire at the end of 2013/14, as a 2013 amendment to the PFA effectively replaces MCOAs with MCAs (refer to the last row of the previous table).
Revenue-Dependent Appropriations (RDA) (section 21(1), Public Finance Act 1989)	Departmental only: Authorises a department or an Office of Parliament to incur expenses in supplying a specified class of outputs (goods and services) that are not paid for directly by the Crown. A proposed RDA must be approved by the Minister of Finance, before it is presented in the Estimates. Each class of outputs for which an RDA is approved is listed in an Appropriation Act for the relevant financial year. Annual only: The authority lapses at the end of the financial year specified. Single output class only: The scope of an RDA is limited to a single class of outputs (defined as a grouping of similar outputs). Amount limited by amount of revenue earned: The amount of an RDA is limited tothe amount of revenue earned by a department or an Office of Parliament from other departments or from parties other than the Crown during a financial year. The Minister of Finance can further direct a department to incur expenses to a level lower than the amount of revenue earned, though such directions are rare. Typical application: An RDA provides flexibility to respond to unanticipated changes in the level of external demand for a class of outputs, where the full cost of the outputs is met by external parties and not the Crown.

Appropriation Period#

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

Annual Appropriations - Most appropriations allow expenses or capital expenditure to be incurred only during a particular financial year. The amounts for RDAs are forecasts only.
Multi-Year Appropriations (MYAs) - The PFA also permits appropriations that allow expenses or capital expenditure to be incurred during a specified period that spans the whole or parts of more than one financial year, but no more than five financial years.
Permanent Appropriations (sometimes referred to as permanent legislative authorities or PLAs) - Permanent appropriations are authorised by legislation other than an Appropriation Act and continue in effect until revoked by Parliament. Generally the authorising legislation will impose limits on the scope of the appropriation and not its amount. For those appropriations with limits set in cash terms, section 11(2) of the PFA 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”. The scope of a permanent appropriation will reference the relevant section of the authorising legislation.

Types of Crown Revenue and Capital Receipts#

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

Types of Crown Revenue and Capital Receipts Table
Crown Revenue Type	Transaction Type	Description
Tax Revenue	Non-Departmental	Tax payable to the Crown, such as Income Tax, GST and Fringe Benefit Tax
Non-Tax Revenue	Non-Departmental	Revenue earned by the Crown from its investing and other operating activities. Examples include interest income, capital charges and dividends from State-owned enterprises.
Capital Receipts	Non-Departmental	Capital received by the Crown: when loans are raised (which appear in Vote Finance) or repayments of principal are made on debts owed to the Crown (for example, in Vote Social Development), or when capital assets are sold.

Types of Movements in Departmental Net Asset Balances#

Information on types of movements in each department's net asset balance appears at the end of the Vote containing appropriations that belong to a department's responsible Minister. The movements reconcile a department's estimated opening and projected closing net asset balances. The projected closing net asset balance sets an upper bound on the amount of the Crown's accumulated net investment in a department throughout the financial year.

Types of Movements in Departmental Net Asset Balances
Movement Type	Description
Capital Injections	Investment by the Crown in a department, which increases the department's closing net asset balance.
Capital Withdrawals	Returns of capital by a department to the Crown, which reduce the department's closing net asset balance.
Surplus to be Retained/(Deficit Incurred)	The net surplus forecast to be retained by a department from its operations for a financial year in accordance with section 22(1) of the PFA, or the forecast deficit for the department. A surplus or deficit will, respectively, increase or decrease the department's closing net asset balance.
Other Movements	Any other adjustment required to ensure that the amount of a department's authorised net asset balance is not a forecast but an upper bound within which the department must operate throughout the financial year. Such movements may include offsets to forecast deficits (if any), to ensure that net assets remain within approved limits should the deficit be less than forecast. Other movements may include offsets to forecast withdrawals, to ensure that net assets remain within approved limits until the capital is withdrawn.

Guide to Reading the Supplementary Estimates of Appropriations and Supporting Information#

The Supplementary Estimates of Appropriation and Supporting Information contains this Introduction and, for each Vote, details of appropriations, schedules of departmental net asset balances, and supporting information.

Votes that do not require any changes to the Estimates for the current financial year are not included in this document. However, their appropriation details are included in the on-line Summary Tables: www.treasury.govt.nz/budget/2014/summarytables/suppestimates

Layout of Each Vote#

The Supplementary Estimates presents Votes in alphabetic order (Vote ACC to Vote Women's Affairs). If particular information is not applicable to a Vote or a specific appropriation or type, or is otherwise unavailable, the relevant heading is not included.

Supplementary Estimates

The title page for each Vote for which there are changes specifies the Minister(s) responsible for existing and proposed appropriations in the Vote, the administering department for the Vote, and the responsible Minister for that department.

Tables containing the following information (where applicable) are then provided on each appropriation referred to in the Appropriation (2013/14 Estimates) Act 2013 and Appropriation (2013/14 Supplementary Estimates) Bill, other current appropriations, and departmental net assets:

Annual and Permanent Appropriations - The type, title, scope and amount of each annual and permanent appropriation. Any changes to the annual amounts, for which parliamentary authorisation is sought in the Appropriation (2013/14 Supplementary Estimates) Bill, are shown in bold type.As permanent appropriations have already been approved by Parliament, their amounts are forecasts, not a limit, so are not shown in bold type.
Multi-Year Appropriations (MYAs) - The type, title, scope and amount of each MYA, including any adjustments since originally appropriated, amounts incurred or estimated for particular years, and the estimated remaining balance.
Details of Projected Movements in Departmental Net Assets - Information on the opening and closing balances of, and movements in, the net assets of each department is included in the Vote that contains appropriations belonging to a department's responsible Minister.

The Supporting Information for each Vote follows immediately after the Supplementary Estimates for that Vote.

Supporting Information (where applicable)

Part 1 - Vote as a Whole

Part 1.2 Summary of Financial Activity - A table showing changes since the beginning of the financial year.

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. This table is used only when information additional to that provided for an appropriation under the Reasons for Change heading is required.

Part 1.5 Relationship between individual Appropriations and the Work Programme - An optional table to be used to describe the work in a new Vote or when the relationship between individual new appropriations and the work programmeis not readily apparent from the other information provided on each appropriation.

The order of Parts 2 - 4 of the supporting information on each appropriation is the same as that used for the 2014/15 Estimates of Appropriations, with all departmental appropriations presented first, followed by non-departmental appropriations and then by multi-category appropriations. This ordering differs from that used in the 2013/14 Information Supporting the Estimates, where information was ordered by appropriation types. The following table shows how the Supplementary Estimates structure relates to that used in the 2013/14 Information Supporting the Estimates.

Supplementary Estimates Structure 2013/14		Estimates Structure 2013/14
Part #	Part Name	Part #	Part Name
2.1	Departmental Output Expenses	2.1	Departmental Output Expenses
2.2	Departmental Other Expenses	5.1	Departmental Other Expenses
2.3	Departmental Capital Expenditure and Capital Injections	6.1	Departmental Capital Expenditure
3.1	Non-Departmental Output Expenses	2.2	Non-Departmental Output Expenses
3.2	Non-Departmental Benefits and Other Unrequited Expenses	3.2	Non-Departmental Benefits and Other Unrequited Expenses
3.3	Non-Departmental Borrowing Expenses	4.2	Non-Departmental Borrowing Expenses
3.4	Non-Departmental Other Expenses	5.2	Non-Departmental Other Expenses
3.5	Non-Departmental Capital Expenditure	6.2	Non-Departmental Capital Expenditure
4	Multi Category Expenses and Capital Expenditure	N/A	Did not exist in the Estimates

This information in Parts 2 to 4 includes (depending on appropriation type):

for existing appropriations that are increased or decreased - the reasons for that change
for new appropriations:
- intended impacts, outcomes and objectives
- details of expenses and revenue for departmental output expenses appropriations, and of expenses or expenditure for other appropriations
- reasons for changes
- output performance measures and standards for output expense appropriations
- expected results (performance information) for non departmental other expenses and capital expenditure, and
- reporting mechanisms for non departmental other expenses and capital expenditure.

Useful Links#

The suite of documents presented to the House on Budget day can be accessed in the Budgets section of the website: www.treasury.govt.nz/budget/2014
The Summary Tables, which are available online, provide a high-level perspective and comparative “ready reference” for all appropriations (annual, permanent and multi-year). They cover:
- aggregates for all Votes - showing totals for the Estimates and Supplementary Estimates for 2013/14 with respect to each type of appropriation and of Crown revenue and capital receipts
- each appropriation type and total appropriations for each Vote - showing totals of the Estimates and Supplementary Estimates for 2013/14
- current-year revenue-dependent appropriations
- multi-year appropriations by Vote, appropriation type and period
- Crown revenue and Crown capital receipts for 2013/14 associated with each Vote, and
- net assets of each department - showing the projected closing balance for 2013/14.

For inclusion in the Summary Tables, MYAs are converted into actual or forecast amounts for each financial year.

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

Terms and Definitions#

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

Terms and Definitions Table
Term	Definition
Appropriation	An appropriation is a parliamentary authorisation for the Crown or an Office of Parliament to incur expenses or capital expenditure.
Appropriation scope	One of the defining terms of an appropriation that establishes limits on the activities for which the Crown or an Office of Parliament is authorised to incur expenses or capital expenditure under that appropriation.
Capital expenditure	The cost of assets acquired or developed including any ownership interest in entities, but excluding inventory.
Crown revenue and capital receipts	Flows accounted for as revenue and capital receipts on behalf of the Crown rather than as departmental revenue.
Department	Generally references to Departments also include an Office of Parliament as provided in section 26E(4) of the PFA.
Expenses	Amounts consumed or losses of service potential or future economic benefits, other than those relating to capital withdrawals, in a financial year. Expenses are an accrual concept measured in accordance with generally accepted accounting practice.
GST	Goods and services tax. Appropriations are stated GST-exclusive.
MCA	Multi-category appropriation.
MCOA	Multi-class output expense appropriation.
MYA	Multi-year appropriation.
N/A	Not applicable.
Office of Parliament	There are three Offices of Parliament - the Controller and Auditor General, the Office of the Ombudsmen, and the Parliamentary Commissioner for the Environment. Each is headed by an Officer of Parliament.
Outcomes	States or conditions of society, the economy or the environment, including changes in those states or conditions.
Outputs	Goods or services supplied by departments and other entities to external parties. Outputs are a variety of types, including policy advice, administration of contracts and grants, and the provision of specific services.
PFA	Public Finance Act 1989.
PLA	Permanent legislative authority - a traditional term for a permanent appropriation, ie, one that is authorised for an indefinite period by legislation other than an Appropriation Act.
Minister	The Minister responsible for specific appropriations being sought within a Vote. As several Ministers may now be responsible for different appropriations within a single Vote, each appropriation will have a tag (M1, M2, etc) identifying the Minister responsible for that line item.
RDA	Revenue-dependent appropriation - as authorised by section 21(1) of the PFA 1989.
Responsible Minister	The Minister responsible for the financial performance of a department or Crown entity. In relation to an Office of Parliament, the Office of the Clerk of the House of Representatives, and the Parliamentary Service, the Speaker is the responsible Minister.
Revenue from the Crown	Revenue earned by a department from the Crown for the provision of outputs to or on behalf of the Crown. These flows are accounted for as departmental revenue. Revenue from the Crown is eliminated for purposes of reporting the Crown's overall financial performance and position.
Revenue from Others	Revenue earned by a department from other departments and from third parties. Revenue from other departments is eliminated for purposes of reporting the Crown's overall financial performance and position.
Vote	A grouping of one or more appropriations that are the responsibility of one or more Ministers of the Crown and are administered by the one department or Office of Parliament.