Vote Transport - Supplementary Estimates 2011/12

Details of Multi-Year Appropriations#

Details of Projected Movements in Departmental
Net Assets#

Ministry of Transport

Information Supporting the Supplementary Estimates Vote Transport#

MINISTER(S) RESPONSIBLE FOR APPROPRIATIONS: Minister of Transport (M72)

ADMINISTERING DEPARTMENT: Ministry of Transport

MINISTER RESPONSIBLE FOR MINISTRY OF TRANSPORT: Minister of Transport

Part 1 - Summary of the Vote#

Part 1.3 - Trends in the Vote

Summary of Financial Activity

Analysis of Significant Trends

Tax Revenue

Vote Transport is responsible for collecting tax revenue from motor vehicle registration fees and road user charges. Revenue is forecast three times a year and increases and decreases reflected in the Crown financial statements. The change above is less than 1 percent. 

Non Tax Revenue

This represents administration fees, road tolling revenue and some infringement fees. The decrease is mainly due to a change in what fees can be charged for some services.

Appropriations

The table above explains the changes in the Vote by recipient for ease of explanation.  

Funding to the NZ Transport Agency for the NLTF - funded from tax revenue

This funding moves in line with road tax revenue. Vote Transport road tax revenue is almost unchanged as noted above, however Customs also collect this revenue.  The decrease of $95 million reflects the net effect of:

• Vote Transport forecast road tax revenue decreased by $3 million during the year
• the forecast road tax revenue collected by Customs decreased by $69 million
• the forecast expenditure decreased by $22 million to reflect the balance in the National Land Transport Fund.

Funding to the NLTF from the Crown

While the main source of funding to the National Land Transport Fund is intended to be road tax revenue, the Crown may provide additional funding. The movement of $286 million is the net of:

• $180 million for a second short-term advance facility for the NZ Transport Agency to borrow up to $90 million from the Crown for 2011/12 only, to assist it to manage seasonal fluctuations in revenue and work programming, and emergency works. The appropriation was set at $180 million to allow funds to be repaid and then redrawn if required
• $102 million for the reinstatement of local roads in Canterbury following the earthquakes, and
• $4 million balance is the recognition of surplus administration fee revenue from 2010/11 and 2011/12.

Funding for Rail

The table above appears to show that rail funding has grown by $94 million in 2011/12. However the increase is mainly due to rephasing between years and a $50.6 million accounting entry, and is not an overall increase. The table below explains the movements that have occurred during the year:

The $500 million loan for the Auckland Electric Multiple Unit package was transferred from KiwiRail to the Auckland Council during the year and the funding rephased. The $80.769 million initially appropriated for 2011/12 increased to $200 million - an increase of $119.231 million, but the loan funding in outyears decreased by this amount.

The accounting entry of $50.600 million represents the cost to the Crown of the below market interest rate of the loan to the Auckland Council.

Funding for Crown Entities

The Transport Crown entities are mainly funded by third party revenue and so receive relatively little Crown funding. The main reasons for the increase of $1.785 million are:

• $1.250 million to Maritime New Zealand to assist them to manage their business as usual activity while also managing the response to the grounding of the MV Rena. This increase was fiscally neutral to the Crown as it was a transfer within the Vote
• $293,000 million to Maritime New Zealand to fund its increased liability to capital charge, and
• $200,000 million to the NZ Transport Agency to fund the introduction of Driver Licence Stop Orders, a new enforcement tool.

Other

Other consists of funding for other activities. The main reasons for the increase of $44.051 million are:

• $35 million for the response to the MV Rena grounding. While this is managed by Maritime NZ, it has been shown separately from the Crown entity funding above, due to its unusual nature
• $7.100 million for the Motor Vehicle Register to cover lower revenue from third parties
• $1 million for an increase in the Bad Debt provision for motor vehicle registration and road user charges based on higher than usual actual costs, and
• $850,000 million for the Motor Vehicle Register running costs and $101,000 million for joint venture airports, carried forward from 2010/11.

Funding for the Ministry of Transport

The small decrease is the net of:

• $1.250 million transferred to Maritime New Zealand to assist them to manage their business as usual activity, while also managing the response to the grounding of the MV Rena
• $1.124 million carried forward from 2010/11
• $193,000 million of additional third party revenue, and 
• $200,000 million returned to the Crown representing efficiency savings.

Part 2 - Details and Expected Performance for Output Expenses#

Part 2.1 - Departmental Output Expenses#

Governance and Performance Advice for Crown Agencies (M72)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation decreased due to a fiscally neutral transfer of $650,000 to departmental output expense Policy Advice. This reflected:

• the estimated actual cost of the outputs purchased by the Minister, and
• the reprioritisation of work by the Ministry to manage the transfer of departmental funding to Maritime New Zealand to assist it with its ongoing activities following the Rena grounding.

The original cost for this output class was based on that of 2010/11, which included work on two Crown entity reviews. This expenditure was not repeated in 2011/12.

Land Transport Revenue Forecasting and Strategy (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation increased by $550,000 due to:

• a carry forward of $350,000 from 2010/11. $200,000 of this was subsequently returned to the Crown as the Ministry could manage within baseline, and
• an increase of $400,000 from a fiscally neutral transfer between output classes to reflect the forecast costs of the outputs purchased by the Minister.

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

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The appropriation increased to reflect a fee review implemented during the year to cover the costs of this activity.

Policy Advice (M72)#

Scope of Appropriation#

Expenses and Revenue#

Reasons for Change in Appropriation#

The reason for the decrease in the appropriation is the net of several factors, including:

• $1.250 million of departmental revenue transferred to Maritime New Zealand to assist it to deliver its planned work while dealing with the Rena grounding
• $200,000 returned to the Crown as an efficiency saving
• $170,000 of additional revenue from third parties.

Road User Charges Collection, Investigation and Enforcement (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased due to a carry forward from 2010/11 of $974,000 to cover the costs of the implementation of the road user charges review.

Part 2.2 - Non-Departmental Output Expenses#

Licensing Activities (M72)#

Scope of Appropriation

Reasons for Change in Appropriation

The appropriation increased to reflect additional funding to implement system changes to accommodate the new enforcement tool of Driver Licence Stop Orders.

Motor Vehicle Registry (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased because:

• $850,000 was carried forward from 2010/11, and
• an increase of $7.100 million was approved to match the reduction in revenue received from the Accident Compensation Corporation.

National Land Transport Programme PLA (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation decreased due to a transfer of $50 million to the National Land Transport Programme capital appropriation to reflect the cost of activities proposed by the NZ Transport Agency in the year.

Policy Advice on Safety Regulation and Monitoring - Maritime (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased due to:

• a $1.250 million transfer from within Vote Transport to assist Maritime NZ to deliver their planned outputs while also managing the response to the grounding of the MV Rena, and
• an increase in funding for capital charge.

Rail - Waikato Network Funding (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation decreased because due to delays, $1.591 million has been transferred to 2012/13.

Reinstatement of Local Roads in Canterbury (M72)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

This appropriation was established during the year to assist with road reinstatement following the earthquakes because the costs were beyond those that could be borne by the National Land Transport Programme without affecting its other work.

Output Performance Measures and Standards#

Search and Rescue Activities (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased because Maritime New Zealand was granted additional funding for capital charge and part of this was allocated to this appropriation.

Part 5 - Details and Expected Results for Other Expenses#

Part 5.2 - Non-Departmental Other Expenses#

Auckland Rail Development (M72)

Scope of Appropriation and Expenses

Reasons for Change in Appropriation

The funding adjustment of $20 million reflects a decision by Cabinet during the year to transfer funding from this appropriation to the Auckland Metro Rail Electric Multiple Unit package.  

At the start of 2011/12, the estimated actual for the year was $248 million.  This decreased during the year, as funding was rephased over the life of the project which had been extended to 30 June 2014 as part of Budget 11.  

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

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased to reflect the forecast level of bad debts

Loan for Auckland Metro Rail Electric Multiple Unit Package Fair Value Write-down (M72)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

This appropriation was created during the year to reflect the cost to the Crown of the below market interest rate associated with the loan for the Electric Multiple Unit package. It is an accounting entry only.

Expected Results#

Rail - Metro Rail Rolling Stock and Infrastructure (Wellington) (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased due to a carry forward of unspent funding from 2011/12.

Tauranga Maritime Incident Response (M72)#

Scope of Appropriation#

Expenses#

Reasons for Change in Appropriation#

The appropriation was created during the year to provide Maritime New Zealand with funding to manage the response to the grounding of the MV Rena off Tauranga in October 2011.

Expected Results#

Reporting Mechanisms#

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#

Part 6.1 - Departmental Capital Expenditure#

Ministry of Transport - Capital Expenditure PLA (M72)

Scope of Appropriation

Capital Expenditure

Reasons for Change in Appropriation

The appropriation decreased as expenditure was lower than forecast.

Part 6.2 - Non-Departmental Capital Expenditure#

Joint Venture Airports - Crown Contribution (M72)#

Scope of Appropriation and Capital Expenditure

Reasons for Change in Appropriation

The appropriation increased due to a transfer of unspent funding of $101,000 from the previous joint venture appropriation which expired on 30 June 1011.

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

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation decreased as a result of:

• a transfer of $50 million from the National Land Transport Programme operating appropriation to reflect the planned activities during the year
• a decrease of $73 million to reflect increased forecast revenue
• a decrease of $22 million to reflect the balance of the National Land Transport Fund.

New & Improved Infrastructure for State Highways - Crown Contribution (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

This appropriation decreased by $3 million due to the net of:

• an increase of $10 million from the recognition of actual unspent administration fee income from 2010/11 and forecast surplus from 2011/12, and
• a decrease of $7.100 million due to a transfer of funding to the Non-departmental Output Expense: Motor Vehicle Registry to cover a decrease in third party revenue.

NLTF Borrowing Facility for a Short-Term Advance in 2011/12. (M72)#

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

This appropriation was created during the year to assist the New Zealand Transport Agency to address a cash flow issue.

Expected Results#

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

Scope of Appropriation#

Capital Expenditure#

Reasons for Change in Appropriation#

This appropriation was created during the year to to replace the existing loan appropriation to KiwiRail and reflect the ownership of this rail package.

Expected Results#

Rail - New Zealand Railways Corporation Loans (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation decreased due to the transfer of the loan funding for the Auckland Electric Multiple Unit package to a separate appropriation to the Auckland Council.

Wellington Metro Rail Network Upgrade (M72)#

Scope of Appropriation#

Reasons for Change in Appropriation#

The appropriation increased due to a transfer of funding from 2012/13 to match the expenditure profile.

Reporting Mechanisms#

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