Formats and related files
APPROPRIATION MINISTER(S): Minister of Finance (M31), Minister for State Owned Enterprises (M65), Minister of Science and Innovation (M84)
APPROPRIATION ADMINISTRATOR: The Treasury
RESPONSIBLE MINISTER FOR THE TREASURY: Minister of Finance
Summary of the Vote#
Overview#
The Minister of Finance is responsible for appropriations in Vote Finance for the 2014/15 financial year which cover the following:
- a total of over $38 million for the provision of services which support the performance of the State sector including fiscal reporting, forecasting and monitoring, provision of Export Credit, managing, administering and monitoring Crown Guarantee Schemes, and Crown Borrowing and Investment
- a total of nearly $35 million for the provision of economic, financial and regulatory policy advice to support decision-making by Ministers on government policy matters
- a total of over $10 million for the provision of shared services to other entities and agencies
- a total of nearly $5 million for departmental capital expenditure
- a total of over $3,622 million for the payment of interest and other costs relating to the Crown's debt
- a total of over $789 million for superannuation costs, primarily the Government Superannuation Fund
- a total of over $30 million for capital payments to International Financial Institutions
- a total of nearly $15 million for costs of administering New Zealand House, London
- a total of nearly $2 million for providing and administering grants and loans to Taitokerau Forests Limited
- a total of over $5 million for unclaimed money, managing the Crown's residual liabilities, meeting costs relating to the Landcorp Protected Land Agreement, and provisions for meeting liabilities associated with Geothermal Wells
- a total of over $13 million for the unwind of Crown Support Deed interest expense, and
- a total of over $5 million for inquiries and research into productivity-related matters.
The Minister of Finance is also responsible for Crown revenue and receipts in the Vote for the 2014/15 financial year which account for nearly $3,084 million in non-tax revenue for return on investments, including capital charge, dividends, and interest on securities and deposits.
The Minister for State Owned Enterprises is responsible for one appropriation in Vote Finance for the 2014/15 financial year which covers over $4 million for Crown company monitoring, governance, and ownership advice.
The Minister of Science and Innovation is responsible for one appropriation in Vote Finance for the 2014/15 financial year which covers nearly $500,000 for Crown Research Institutes governance and ownership advice.
Details of these appropriations are set out in Parts 2-4.
Estimates of Appropriations#
Details of Appropriations and Capital Injections#
Annual and Permanent Appropriations
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Titles and Scopes of Appropriations by Appropriation Type | Budgeted $000 | Estimated Actual $000 | Budget $000 |
Departmental Output Expenses | |||
Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA (M31)This appropriation is limited to expenses incurred in connection with administering borrowing, securities, derivative transactions and investment by the Crown, as authorised by section 65ZH of the Public Finance Act 1989. | - | - | 8,917 |
Administration of Guarantees and Indemnities given by the Crown PLA (M31)This appropriation is limited to expenses incurred in connection with administering of guarantees and indemnities given by the Crown, as authorised by section 65ZG of the Public Finance Act 1989. | 418 | 418 | 110 |
Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers (M65)This appropriation is limited to the provision of ownership, performance monitoring and governance advice to the Minister for State Owned Enterprises and other responsible Ministers in respect of the Ministers' shareholding responsibilities or as responsible Ministers for the New Zealand Lotteries Commission and Public Trust. | 5,506 | 5,479 | 4,508 |
Crown Company Monitoring Advice to the Minister of Science and Innovation and the Minister for Economic Development (M84)This appropriation is limited to the provision of ownership, performance monitoring, and governance advice to the Minister of Science and Innovation and other responsible Ministers in respect of the Ministers' shareholding responsibilities. | 483 | 480 | 484 |
Policy Advice - Finance (M31)This appropriation is limited to the provision of advice (including second opinion advice and contributions to policy advice led by other agencies) to support decision-making by Ministers on government policy matters relating to Finance. | 34,898 | 32,655 | 34,704 |
Provision of Financial Operations Services and Operational Advice (M31)This appropriation is limited to the provision of services which support the performance of the State sector, including fiscal reporting, forecasting and monitoring; provision of Export Credit; and the management, administration and monitoring of Crown Guarantee Schemes, Crown Lending, Crown Investments and Crown Bank Accounts. | 33,186 | 32,323 | 29,251 |
Provision of Financial Services to the New Zealand Local Government Funding Agency RDA (M31)This appropriation is limited to expenses incurred in connection with the provision of financial services on a commercial basis to the New Zealand Local Government Funding Agency (LGFA). | 165 | 165 | 165 |
Shared Support Services (M31)This appropriation is limited to provision of support services to other agencies. | 9,654 | 9,654 | 10,400 |
Administration of Crown Borrowing PLA (M31)This appropriation is limited to expenses incurred in connection with administering borrowing by the Crown, as authorised by section 61(1) of the Public Finance Act 1989. | 5,421 | 5,371 | - |
Administration of Derivative Transactions PLA (M31)This appropriation is limited to expenses incurred in connection with administering derivative transactions of the Crown, as authorised by section 65H(2) of the Public Finance Act 1989. | 983 | 973 | - |
Administration of Investment of Public Money PLA (M31)This appropriation is limited to expenses incurred in connection with administering the investment of public money, as authorised by section 65J(1) of the Public Finance Act 1989. | 712 | 702 | - |
Total Departmental Output Expenses |
91,426 | 88,220 | 88,539 |
Departmental Capital Expenditure | |||
The Treasury - Capital Expenditure PLA (M31)This appropriation is limited to the purchase or development of assets by and for the use of the Treasury, as authorised by section 24(1) of the Public Finance Act 1989. | 6,121 | 6,121 | 4,833 |
Total Departmental Capital Expenditure | 6,121 | 6,121 | 4,833 |
Non-Departmental Output Expenses | |||
Management of New Zealand House, London (M31)This appropriation is limited to the property management services in respect of New Zealand House, London. | 1,000 | 300 | 1,000 |
Management of the Crown's Obligations for Geothermal Wells (M31)This appropriation is limited to the management and maintenance relating to geothermal wells and associated sites and structures for which the Crown accepts responsibility. | 295 | 145 | 151 |
Management of the New Zealand Superannuation Fund (M31)This appropriation is limited to managing the New Zealand Superannuation Fund on behalf of the Crown. | 528 | 408 | 528 |
Inquiries and Research into Productivity Related Matters MCOA (M31) | 5,030 | 5,030 | - |
Inquiries into Productivity - Related MattersThis output class is limited to inquiries undertaken by the New Zealand Productivity Commission in accordance with the New Zealand Productivity Commission Act 2010. | 4,527 | 4,527 | - |
Research into and Promotion of Productivity - Related MattersThis output class is limited to the New Zealand Productivity Commission undertaking research into and promoting public understanding of productivity related matters in accordance with the New Zealand Productivity Commission Act 2010. | 503 | 503 | - |
Total Non-Departmental Output Expenses | 6,853 | 5,883 | 1,679 |
Non-Departmental Borrowing Expenses | |||
Debt Servicing PLA (M31)This appropriation is limited to the payment of borrowing expenses for the Crown's New Zealand-dollar and foreign-currency debt, authorised by section 60(1)b of the Public Finance Act 1989. | 3,554,913 | 3,554,913 | 3,622,323 |
Total Non-Departmental Borrowing Expenses | 3,554,913 | 3,554,913 | 3,622,323 |
Non-Departmental Other Expenses | |||
Crown Residual Liabilities (M31)Residual obligations arising from administration of the Crown's sale and purchase agreements with SOEs and Crown entities and from the sale of Crown investments, and for the settlement of claims against the Crown arising from exposure to asbestos. | 455 | 55 | 230 |
Geothermal Wells Fund (M31)This appropriation is limited to meeting the costs of one-off unforeseen events relating to those geothermal wells for which the Crown accepts responsibility. | 500 | - | 500 |
Government Superannuation Appeals Board (M31)This appropriation is limited to the expenses of the Government Superannuation Appeals Board in performing its functions under the Government Superannuation Fund Act 1956. | 50 | 50 | 50 |
Government Superannuation Fund Authority - Crown's Share of Expenses PLA (M31)This appropriation is limited to the Crown's share of the expenses of the Government Superannuation Fund Authority relating to the management and administration of the Government Superannuation Fund and the schemes, authorised by sections 15E and 95 of the Government Superannuation Act 1956. | 27,856 | 27,856 | 28,523 |
Government Superannuation Fund Unfunded Liability PLA (M31)This appropriation is limited to the net increase (excluding actuarial gains and losses) in the Crown's liability to the Government Superannuation Fund and the specified superannuation contribution withholding tax on employer contributions by the Crown, authorised by section 95AA of the Government Superannuation Act 1956. | 619,174 | 619,174 | 735,397 |
Impairment of Loans to Taitokerau Forest Limited (M31)This appropriation is limited to the expense incurred on the impairment of new loans to Taitokerau Forests Limited. | 200 | - | 200 |
Landcorp Protected Land Agreement - Operating (M31)This appropriation is limited to providing for operating costs incurred under the Landcorp Protected Land Agreement. | 4,857 | 1,857 | 2,000 |
National Provident Fund Schemes - Liability Under Crown Guarantee PLA (M31)This appropriation is limited to the net increase (excluding actuarial gains and losses) in the Crown's liability for benefits payable to members of National Provident Fund schemes under the Crown guarantee in section 60 of the National Provident Fund Restructuring Act 1990. This appropriation is authorised by section 66 of the National Provident Fund Restructuring Act 1990. | 26,000 | 26,000 | 25,000 |
New Zealand House - Renegotiation of Lease Arrangements (M31)This appropriation is limited to activities to re-gear the lease on New Zealand House in London (including The Royal Opera Arcade and Her Majesty's Theatre). | 200 | 200 | 1,000 |
New Zealand House, London (M31)This appropriation is limited to the operational costs of New Zealand House, London. | 12,800 | 11,800 | 12,000 |
Taitokerau Forests Limited Grant (M31)This appropriation is limited to grants to Taitokerau Forests Limited for on-payment to forest owners, payable upon harvest of the forests. | 244 | 244 | 200 |
Unclaimed Money PLA (M31)This appropriation is limited to the repayment of money authorised by section 74(5) of the Public Finance Act 1989. | 250 | 150 | 250 |
Unclaimed Trust Money PLA (M31)This appropriation is limited to the repayment of money authorised by section 70(2) of the Public Finance Act 1989. | 250 | 50 | 250 |
Unwind of Discount Rate used in the Present Value Calculation of Payment under Crown Deed of Support with AMI (M31)This appropriation is limited to the expense incurred in unwinding the discount rate used in the present value calculation of the liability as the liability nears settlement. | 15,295 | 15,295 | 13,497 |
Impairment of Learning Media Funding Facility (M31)This appropriation is limited to impairment of a funding arrangement in Learning Media. | 7,700 | 4,100 | - |
New Zealand Aluminium Smelters - Electricity Agreement Incentive Payment (M31)This appropriation is limited to the provision of an incentive payment to New Zealand Aluminium Smelters on the execution of a revised electricity agreement with Meridian Energy Limited | 30,000 | 30,000 | - |
Payment in respect of Export Credit Office Guarantees and Indemnities PLA (M31)This appropriation is limited to payments by the Crown under export credit guarantees or indemnities given under Section 65ZD of the Public Finance Act 1989, as authorised by section 65ZG of that Act. | 527 | 527 | - |
Payments in respect of Guarantees and Indemnities PLA (M31)This appropriation is limited to payments by the Crown under a guarantee or indemnity given under section 65ZD of the Public Finance Act 1989, as authorised by section 65ZG of that Act. | 83 | 83 | - |
Solid Energy New Zealand Limited - Redeemable Preference Shares Impairment (M31)This appropriation is limited to the impairment of investment in the redeemable preference shares in Solid Energy New Zealand Limited. | 25,000 | 25,000 | - |
Total Non-Departmental Other Expenses |
771,441 | 762,441 | 819,097 |
Non-Departmental Capital Expenditure | |||
International Financial Institutions PLA (M31)This appropriation is limited to capital expenditure for shares subscribed to by New Zealand as a member of International Financial Institutions, authorised by section 5 of the International Finance Agreements Act 1961. | 212,000 | 212,000 | 30,500 |
Landcorp Protected Land Agreement - Capital (M31)This appropriation is limited to providing for capital investments incurred under the Landcorp Protected Land Agreement. | 4,409 | 4,409 | 2,000 |
New Zealand House, London, capital (M31)This appropriation is limited to capital expenditure in relation to New Zealand House, London. | 750 | 750 | 750 |
Taitokerau Forests (M31)This appropriation is limited to the provision of loans to Taitokerau Forests Ltd for forest management and development. | 1,700 | 1,700 | 1,300 |
Crown Asset Management Limited (CAML) Equity Injection (M31)This appropriation is limited to the capital injection for CAML to purchase and manage assets of receiverships under the Deposit Guarantee Scheme and other residual Crown assets. | 10,000 | 10,000 | - |
Learning Media Funding Facility (M31)This appropriation is limited to provision of a funding arrangement to address the liquidity of Learning Media. | 7,700 | 4,100 | - |
Solid Energy New Zealand Limited - Loan Facilities (M31)This appropriation is limited to the provision of a loan facility and a stand-by facility to Solid Energy New Zealand Limited. | 130,000 | 130,000 | - |
Solid Energy New Zealand Limited - Redeemable Preference Shares (M31)This appropriation is limited to the subscription of redeemable preference shares in Solid Energy New Zealand Limited by the Crown. | 25,000 | 25,000 | - |
Total Non-Departmental Capital Expenditure | 391,559 | 387,959 | 34,550 |
Multi-Category Expenses and Capital Expenditure | |||
Inquiries and Research into Productivity Related Matters MCA (M31)The overarching purpose of this appropriation is to provide for inquiries into, and research and promotion of, productivity related matters. | - | - | 5,030 |
Non-Departmental Output Expenses | |||
Inquiries into Productivity - Related MattersThis category is limited to inquiries undertaken by the New Zealand Productivity Commission in accordance with the New Zealand Productivity Commission Act 2010. | - | - | 4,527 |
Research into and Promotion of Productivity - Related MattersThis category is limited to the New Zealand Productivity Commission undertaking research into and promoting public understanding of productivity related matters in accordance with the New Zealand Productivity Commission Act 2010. | - | - | 503 |
Total Multi-Category Expenses and Capital Expenditure | - | - | 5,030 |
Total Annual and Permanent Appropriations |
4,822,313 | 4,805,537 | 4,576,051 |
Multi-Year Appropriations
| Type, Title, Scope and Period of Appropriations | Appropriation, Adjustments and Use | $000 |
|---|---|---|
Departmental Output Expenses | ||
Implementation of Mixed Ownership Model (M31)This appropriation is limited to the policy, operational, and transactional work to implement the Mixed Ownership Model. Commences: 15 December 2011 Expires: 30 June 2015 | Original Appropriation | 46,802 |
| Adjustments for 2012/13 | - | |
| Adjustments to 2013/14 | (17,485) | |
| Adjusted Appropriation | 29,317 | |
| Actual to 2012/13 Year End | 16,984 | |
| Estimated Actual for 2013/14 | 10,160 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 2,173 | |
Non-Departmental Other Expenses | ||
Direct Sale costs for Implementing the Mixed Ownership Model (M31)This appropriation is limited to the direct sales costs of implementing the Mixed Ownership Model. Commences: 15 December 2011 Expires: 30 June 2015 | Original Appropriation | 56,000 |
| Adjustments for 2012/13 | - | |
| Adjustments to 2013/14 | 6,485 | |
| Adjusted Appropriation | 62,485 | |
| Actual to 2012/13 Year End | 21,511 | |
| Estimated Actual for 2013/14 | 38,974 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 2,000 | |
Loyalty Bonus Scheme Related to Initial Public Offers (M31)This appropriation is limited to expenses incurred by allocating shares under a loyalty bonus scheme to eligible investors in initial public offers. Commences: 01 March 2013 Expires: 30 June 2016 | Original Appropriation | 40,000 |
| Adjustments for 2012/13 | - | |
| Adjustments to 2013/14 | 12,100 | |
| Adjusted Appropriation | 52,100 | |
| Actual to 2012/13 Year End | 24,677 | |
| Estimated Actual for 2013/14 | 22,000 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 5,423 |
Capital Injection Authorisations
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| The Treasury - Capital Injection (M31) | 4,392 | 4,105 | 700 |
Supporting Information#
Part 1 - Vote as a Whole#
1.1 - New Policy Initiatives
| Policy Initiative | Appropriation | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Analysis for Outcomes: Better use of the Data to Improve Outcomes | Provision of Financial Operations Services and Operational Advice Output Expenses | 2,080 | 2,380 | 2,380 | 2,380 | 2,319 |
| Transitional support services costs associated with the transfer of emergency management functions to The Department of the Prime Minister and Cabinet | Departmental Capital Injection | 1,072 | - | - | - | - |
| Financial implications for support services associated with the transfer of emergency management functions to The Department of the Prime Minister and Cabinet | Departmental Capital Injection | 167 | - | - | - | - |
| Learning Media Funding Facility | Learning Media Funding Capital Expenditure | 7,700 | - | - | - | - |
| Impairment of Learning Media Funding Facility Other Expenses | 7,700 | - | - | - | - | |
| Solid Energy NZ Ltd Funding | Solid Energy NZ Ltd Loan Facility Capital Expenditure | 130,000 | - | - | - | - |
| Solid Energy NZ Ltd Redeemable Preference Shares Capital Expenditure | 25,000 | - | - | - | - | |
| Impairment of Redeemable Preference Shares Other Expenses | 25,000 | - | - | - | - | |
| Electricity Incentive Payment | NZ Aluminium Smelters Electricity Agreed Incentive Payment Other Expenses | 30,000 | - | - | - | - |
| Additional Resource for Social Housing Work | Policy Advice - Finance Output Expenses | 1,942 | 2,817 | - | - | - |
| Total Initiatives | 230,661 | 5,197 | 2,380 | 2,380 | 2,319 |
1.2 - Trends in the Vote#
Summary of Financial Activity#
| 2009/10 | 2010/11 | 2011/12 | 2012/13 | 2013/14 | 2014/15 | 2015/16 | 2016/17 | 2017/18 | ||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Actual $000 | Actual $000 | Actual $000 | Actual $000 | Budgeted $000 | Estimated Actual $000 | Departmental Transactions Budget $000 | Non- Departmental Transactions Budget $000 | Total Budget $000 | Estimated $000 | Estimated $000 | Estimated $000 | |
Appropriations | ||||||||||||
| Output Expenses | 66,104 | 66,600 | 78,918 | 84,742 | 105,252 | 105,068 | 88,539 | 1,679 | 90,218 | 87,735 | 84,694 | 84,710 |
| Benefits or Related Expenses | - | - | - | - | - | - | N/A | - | - | - | - | - |
| Borrowing Expenses | 2,284,955 | 3,040,302 | 3,441,282 | 3,662,184 | 3,554,913 | 3,554,913 | - | 3,622,323 | 3,622,323 | 3,714,666 | 4,084,040 | 4,149,060 |
| Other Expenses | 687,060 | 2,436,638 | 703,691 | 745,918 | 839,838 | 865,007 | - | 819,097 | 819,097 | 851,062 | 884,449 | 919,167 |
| Capital Expenditure | 306,508 | 943,443 | 264,849 | 96,923 | 397,680 | 445,467 | 4,833 | 34,550 | 39,383 | 48,985 | 29,885 | 29,885 |
| Intelligence and Security Department Expenses and Capital Expenditure | - | - | - | - | - | - | - | N/A | - | - | - | - |
| Multi-Category Expenses and Capital Expenditure (MCA) | ||||||||||||
Output Expenses | - | 1,210 | 4,691 | 5,028 | 5,030 | 5,030 | - | 5,030 | 5,030 | 5,030 | 5,030 | 5,030 |
Other Expenses | - | - | - | - | - | - | - | - | - | - | - | - |
Capital Expenditure | - | - | - | - | - | - | N/A | - | - | - | - | - |
Total Appropriations | 3,344,627 | 6,488,193 | 4,493,431 | 4,594,795 | 4,902,713 | 4,975,485 | 93,372 | 4,482,679 | 4,576,051 | 4,707,478 | 5,088,098 | 5,187,852 |
Crown Revenue and Capital Receipts | ||||||||||||
| Tax Revenue | - | - | - | - | - | - | N/A | - | - | - | - | - |
| Non-Tax Revenue | 3,679,686 | 3,527,438 | 3,552,646 | 3,318,217 | 3,240,590 | 3,240,590 | N/A | 3,062,556 | 3,062,556 | 3,224,839 | 3,412,331 | 3,461,893 |
| Capital Receipts | 22,667 | 176,205 | 947 | 130,941 | 38,698 | 38,698 | N/A | 21,169 | 21,169 | - | 602 | 198,602 |
Total Crown Revenue and Capital Receipts | 3,702,353 | 3,703,643 | 3,553,593 | 3,449,158 | 3,279,288 | 3,279,288 | N/A | 3,083,725 | 3,083,725 | 3,224,839 | 3,412,933 | 3,660,495 |
Note - where restructuring of the vote has occurred then, to the extent practicable, prior years information has been restated as if the restructuring had occurred before the beginning of the period covered.
Adjustments to the Summary of Financial Activity table due to Vote Restructuring#
| 2009/10 Adjustments $000 | 2010/11 Adjustments $000 | 2011/12 Adjustments $000 | 2012/13 Adjustments $000 | 2013/14 Budgeted Adjustments $000 | 2013/14 Estimated Actual Adjustments $000 | |
|---|---|---|---|---|---|---|
Appropriations | ||||||
| Output Expenses | - | (1,210) | (4,691) | (5,028) | (5,030) | (5,030) |
| Benefits or Related Expenses | - | - | - | - | - | - |
| Borrowing Expenses | - | - | - | - | - | - |
| Other Expenses | - | - | - | - | - | - |
| Capital Expenditure | - | - | - | - | - | - |
| Intelligence and Security Department Expenses and Capital Expenditure | - | - | - | - | - | - |
| Multi-Category Expenses and Capital Expenditure (MCA) | ||||||
| Output Expenses | - | 1,210 | 4,691 | 5,028 | 5,030 | 5,030 |
| Other Expenses | - | - | - | - | - | - |
| Capital Expenditure | - | - | - | - | - | - |
Total Appropriations | - | - | - | - | - | - |
Crown Revenue and Capital Receipts | ||||||
| Tax Revenue | - | - | - | - | - | - |
| Non-Tax Revenue | - | - | - | - | - | - |
| Capital Receipts | - | - | - | - | - | - |
Total Crown Revenue and Capital Receipts | - | - | - | - | - | - |
The prior year information in the Summary of Financial Activity table has been restated to reflect the current Vote structure. Funding for this activity started in 2010/11.
1.3 - Analysis of Significant Trends#
Analysis of Significant Trends#
Total Vote: All Appropriations
The movements in Departmental and Non-Departmental appropriations in Vote Finance, which are detailed in the Summary of Financial Activity table above, are largely due to movements in capital expenditure and debt servicing costs.
Significant movements within each appropriation category are shown below.
Output Expenses
The forecasted reduction from 2014/15 reflects the completion of the Mixed Ownership Model programme. The programme has covered 3 financial years: $6.600 million in 2011/12, $10.300 million in 2012/13 and $12.300 million is budgeted in 2013/14.
In 2014/15 output expenses will increase by $2 million for the Financial Operation's Business Information Hub change programme. This will be the first full year of operations of the Analysis for Outcomes programme, and the Gateway and Major Project Monitoring activities that transferred from State Services Commission from 1 December 2013.
In 2011/12 an increase of $4 million was primarily due to the costs of the New Zealand Productivity Commission which was operating for its first full financial year.
The increase between 2010/11 and 2011/12 was due to an increase in funding of nearly $6 million for establishment of the Mixed Ownership Model programme and $5 million transferred from Vote State Owned Enterprises and Vote Crown Research Institutes. These increases were partially offset by the decreased administration costs in relation to the Crown Deposit Guarantee Scheme of nearly $5 million.
Non-Departmental Borrowing Expenses
Debt servicing costs trend upwards between 2008/09 and 2013/14. These costs are expected to increase due to the interest rates and the amount of debt outstanding.
Non-Departmental Other Expenses
The most significant fluctuations in this category relates to the valuation of the Crown's unfunded liability under the Government Superannuation Scheme which is expected to rise in 2013/14 by $9 million and $118 million in 2014/15. The valuation decreased in 2011/12 by $134 million.
Expenditure increased in 2013/14 only due to the new appropriations for the New Zealand Aluminium Smelter Electricity Agreement Incentive payment of $30 million and for the impairment of Solid Energy Redeemable Preference Shares of $25 million.
The 2010/11 year includes $1,186 million for payments in respect of guarantees and indemnities, $150 million for other costs associated with the Deposit Guarantee Scheme, $335 million for impairment of Crown's interest in AMI and nearly $44 million for payments to the Earthquake Commission as a result of the September 2010 Canterbury Earthquake.
Departmental Capital Expenditure
The Departmental capital expenditure increased by over $2 million in 2013/14 for central agencies shared services within the Treasury to support the transition of emergency management functions to the Department of the Prime Minister and Cabinet from 1 April 2014.
There is an increase of $700,000 in each of 2013/14 and 2014/15 for the Financial Operation's Business Information Hub, the replacement system for the operation of the debt funding and investment portfolio activities.
In 2011/12 departmental IT assets were transferred from the State Service Commission and the Department of the Prime Minister and Cabinet with the introduction of shared services across the three agencies.
Non-Departmental Capital Expenditure
This appropriation category comprises purchases of debt and equity by the Crown in various Crown entities, and capital additions to the Crown's physical assets.
In 2013/14 capital budget is available for a Solid Energy loan facility and preference shares totalling $155 million and $7.700 million for Learning Media Limited.
Contributions to the International Monetary Fund have fluctuated between $212 million in 2013/14, $157 million in 2011/12 and $183 million in 2010/11.
There was a one-off increase of $500 million in 2010/11 for the establishment of Capital Asset Management Limited and a capital increase in the Asian Development Bank of $65 million.
In 2009/10 there was a contribution to the New Zealand Superannuation Fund of $250 million.
Crown Revenue
Non-tax Crown Revenue largely comprises capital charge, interest from securities and deposits, and dividends from State-Owned Enterprises and Crown Entities, and are broadly stable. These are removed when consolidated into the Financial Statements of Government.
Crown Capital Receipts
Variances in Crown Capital Receipts are largely due to International Monetary Fund capital returns, repayment of loans, and capital withdrawals from Crown companies.
1.4 - Reconciliation of Changes in Appropriation Structure#
| Old Structure | New Structure | |||||
|---|---|---|---|---|---|---|
| 2013/14 Appropriations in the 2013/14 Structure | 2013/14 (Current) $000 | Appropriations to which Expenses (or Capital Expenditure) have been Moved from or to | Amount Moved $000 | 2013/14 Appropriations in the 2014/15 Structure | 2013/14 (Restated) $000 | 2014/15 $000 |
Departmental Output Expenses | ||||||
| Administration of Crown Borrowing PLA | 5,421 | Merged into Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA | 5,421 | Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA | 7,116 | 8,917 |
| Administration of Derivative Transactions PLA | 983 | Merged into Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA | 983 | |||
| Administration of Investment of Public Money PLA | 712 | Merged into Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA | 712 | |||
| Inquiries and Research into Productivity Related Matters MCOA | 5,030 | Inquiries and Research into Productivity Related Matters MCA | 5,030 | Inquiries and Research into Productivity Related Matters MCA | 5,030 | 5,030 |
| Total | 12,146 | 12,146 | 12,146 | 13,947 | ||
Explanations of the reasons for changing the appropriation structure are noted in the details of each appropriation in Parts 2-4.
Part 2 - Details of Departmental Appropriations#
2.1 - Departmental Output Expenses#
Administration of Crown Borrowing, Securities, Derivative Transactions and Investment PLA (M31)
Scope of Appropriation
Expenses and Revenue
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | - | - | 8,917 |
| Revenue from the Crown | - | - | 8,914 |
| Revenue from Others | - | - | 3 |
Comparators for Restructured Appropriation
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Vote, Type and Title of Appropriation | Budgeted $000 | Estimated Actual $000 | Budget $000 |
| Vote Finance | |||
| Departmental Output Expenses | |||
| Administration of Crown Borrowing PLA | 5,421 | 5,421 | 6624 |
| Administration of Derivative Transactions PLA | 983 | 983 | 1442 |
| Administration of Investment of Public Money PLA | 712 | 712 | 851 |
| Total | 7,116 | 7,116 | 8,917 |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve the administration of the Crown's financing requirements so as to raise sufficient funds to finance the Crown's cash deficit while minimising the cost to the Crown of such borrowing.
How Performance will be Assessed and End of Year Reporting Requirements
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
Existing measures | |||
| New core borrowing is achieved at an acceptable cost relative to a dynamic benchmark, as defined within the Portfolio Management Policy. | New core borrowing cost is less than 25 basis points over the benchmark | New core borrowing cost is less than 25 basis points over the benchmark | New core borrowing cost is less than 25 basis points over the benchmark |
| Compliance with risk management policies and parameters for portfolio management and debt issuance. | No more than four breaches | No more than four breaches | No more than four breaches |
| Number of settlement errors, and financial value of losses arising from settlement errors. | No more than six errors; losses do not exceed $10,000 | No more than six errors; losses do not exceed $10,000 | No more than six errors; losses do not exceed $10,000 |
Expiring measures | |||
| Tender efficiency: Average domestic bond tender cover ratio. | Average tender cover ratio is greater than 2 | Average tender cover ratio is greater than 2 | Expired measure |
| Tender efficiency: Average range of successful bids in domestic bond tenders. | Average range of successful bids is less than 5 basis points | Average range of successful bids 6 or 7 basis points | Expired measure |
| Tender efficiency: The tender process is successful. | Less than 10% of tenders result in an under allocation of volume, due to insufficient bids or unacceptable bid levels | Less than 10% of tenders result in an under allocation of volume, due to insufficient bids or unacceptable bid levels | Expired measure |
| Losses incurred from the credit-related sale of securities, or from default by a counter-party have been actioned in line with the operating guidelines prescribed by the Portfolio Management Policy. | No losses | No losses | Expired measure |
| Borrowing programme is spread across the year. | Cumulative borrowing volume YTD is within 10% of the projected timing profile | Cumulative borrowing volume YTD is within 10% of the projected timing profile | Expired measure |
Replacement measure | |||
| Borrowing programme is spread across the year. | N/A | N/A | Issued bonds volume variance to average requirement does not fall more than 10% behind the full year programme volume |
Note - In 2013/14 and prior years this set of measures has been used to report on the performance of three separate PLAs: Administration of Crown Borrowing, Administration of Derivative Transactions, and the Administration of Investment of Public Money. As of 1 July 2014 these have been merged into one PLA intended for the same purposes.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| SSRSS and KiwiSaver funding removal | 2012/13 | (121) | (121) | (121) | (121) | (121) |
| Efficiency savings | 2012/13 | (73) | (68) | (66) | (66) | (66) |
Note - Combination of previous three PLAs.
Reasons for Change in Appropriation
This new appropriation is the result of merging 3 permanent legislative authority appropriations into one from 1 July 2014 following amendments to the Public Finance Act 1989. The increase in appropriation reflects the increase in funding to implement and operate the new Business Information Hub system which will assist in the management of debt and investments.
Conditions on Use of Appropriation
| Reference | Conditions |
|---|---|
| Section 65ZH of the Public Finance Act | Any expenses incurred in connection with any of the following matters may be incurred without further appropriation, and must be paid without further authority, than this section: (a) negotiating the borrowing of money by the Crown: (b) undertaking, managing, servicing, converting, or repaying borrowing described in paragraph (a): (c) issuing a public security in respect of the Crown: (d) executing, redeeming, or varying a public security described in paragraph (c): (e) negotiating a derivative transaction of the Crown: (f) managing, servicing, or making payments under a derivative transaction described in paragraph (e): (g) negotiating an investment referred to in section 65I: (h) placing, managing, servicing, or converting an investment referred to in section 65I. |
Administration of Guarantees and Indemnities given by the Crown PLA (M31)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 418 | 418 | 110 |
| Revenue from the Crown | 418 | 418 | 110 |
| Revenue from Others | - | - | - |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to achieve efficient and effective administration of the Crown's Guarantees and Indemnities, including the Wholesale and Retail Deposit Guarantee Schemes.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Meet our legal obligations under the Wholesale Guarantee Funding Facility and Retail Deposit Guarantee Scheme. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| SSRSS and KiwiSaver funding removal | 2012/13 | (22) | (22) | (22) | (22) | (22) |
| Efficiency savings | 2012/13 | (9) | (9) | (9) | (9) | (9) |
Reasons for Change in Appropriation#
The decrease reflects the reduction in residual litigation costs.
Conditions on Use of Appropriation#
| Reference | Conditions |
|---|---|
| Section 65ZG of the Public Finance Act | Any money paid by the Crown under a guarantee or indemnity given under section 65ZD and any expenses incurred by the Crown in relation to the guarantee or indemnity may be incurred without further appropriation, and must be paid without further authority, than this section. |
Crown Company Monitoring Advice to the Minister for State-Owned Enterprises and Other Responsible Ministers (M65)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 5,506 | 5,479 | 4,508 |
| Revenue from the Crown | 5,506 | 5,479 | 4,508 |
| Revenue from Others | - | - | - |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to ensure appropriate financial and social returns, and long-term value is achieved from the State-owned enterprises, Crown entity companies (CECs) and Crown entities monitored under this appropriation.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Board appointments completed for State-Owned Enterprises' directors and directors for other entities. | 53 State-Owned Enterprises' directors and 52 directors/board members for other entities | 64 State-Owned Enterprises' directors and 64 directors/board members for other entities | 38 State-Owned Enterprises' directors and 29 directors/board members for other entities |
| Technical quality of operational advice papers regarding ownership, performance monitoring and governance as assessed through the general Treasury policy advice quality assessment process. | At least an average of 70% | 66% | At least an average of 70% |
| Annual Portfolio Report produced, which enables assessment of Crown company and Crown Financial Institution performance. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Statement of Estimated and Forecast Net Worth of Entities Owned#
The Minister for State Owned Enterprises is the responsible Minister for the Government's ownership interests in SOEs (the Minister of Finance is the other shareholding Minister). Other Ministers are responsible for the Government's ownership interest in Crown entity companies (CECs) and Crown entities (in most cases the Minister of Finance is the other shareholding Minister). The estimated net worth (total assets less total liabilities) of SOEs, CECs and Crown entities that are monitored under this appropriation are listed in the table below.
Changes in net worth result from the net effects of profit (after tax), dividends paid, and capital injections or withdrawals. The data for these organisations are based on forecasts provided for inclusion in the 2014 Budget.
The figures below are the best available at present.
| Entities | Balance Date | 2013 Actual Net Worth $000 | 2014 Estimated Net Worth $000 | 2015 Estimated Net Worth $000 |
State-Owned Enterprises | ||||
| Airways Corporation of New Zealand Ltd | 30 June | 67,705 | 77,925 | 90,389 |
| Animal Control Products Ltd | 30 June | 5,478 | 5,501 | 5,536 |
| AsureQuality Ltd | 30 June | 37,290 | 35,394 | 36,336 |
| Kordia Group Ltd | 30 June | 93,425 | 90,676 | 93,777 |
| Landcorp Farming Ltd | 30 June | 1,317,327 | 1,355,522 | 1,365,580 |
| Meteorological Service of New Zealand Ltd | 30 June | 16,906 | 16,179 | 18,219 |
| New Zealand Post Ltd | 30 June | 942,332 | 1,034,561 | 1,153,920 |
| KiwiRail Holdings | 30 June | 1,226,798 | 1,260,099 | 1,121,231 |
| New Zealand Railways Corporation Ltd (KiwiRail Group) | 30 June | 3,273,450 | 3,266,398 | 3,244,946 |
| Quotable Value New Zealand Ltd | 30 June | 17,905 | 22,945 | 16,545 |
| Solid Energy New Zealand Ltd | 30 June | 91,539 | 111,876 | 53,272 |
| Transpower New Zealand Ltd | 30 June | 1,437,178 | 1,423,389 | 1,475,302 |
Crown Entity Companies | ||||
| Southern Response Earthquake Services Ltd | 30 June | 5,051 | (30,871) | 45,566 |
| Crown Asset Management Ltd | 30 June | 116,786 | 35,171 | 22,388 |
| Radio New Zealand Ltd | 30 June | 49,370 | 49,735 | 49,758 |
| Television New Zealand Ltd | 30 June | 185,910 | 199,156 | 223,128 |
| Crown Fibre Holdings Ltd | 30 June | 240,837 | 328,739 | 458,383 |
| Health Benefits Ltd | 30 June | 38,218 | 38,140 | 59,430 |
| Crown Irrigation Investments Ltd | 30 June | Not Available - Established 1 July 2013 | 583 | 583 |
| The Network for Learning Ltd | 30 June | 1,878 | 3,260 | 560 |
Crown Entities | ||||
| Accident Compensation Corporation | 30 June | (2,253,162) | 237,070 | 1,111,978 |
| Housing New Zealand Corporation | 30 June | 13,324,116 | 13,401,497 | 13,475,106 |
| New Zealand Lotteries Commission | 30 June | 28,475 | 27,485 | 27,485 |
| Public Trust | 30 June | 37,626 | 39,358 | 39,591 |
| Earthquake Commission | 30 June | (1,370,430) | (1,022,830) | (988,217) |
| New Zealand Superannuation Fund | 30 June | 22,548,170 | 25,156,934 | 27,033,893 |
| Fairway Resolution Services | 30 June | 3,816 | 4,441 | 4,158 |
Crown's share of the Crown Companies reported at value calculated by the equity method | 100% of Equity | 100% of Equity | 100% of Equity | |
| Christchurch International Airport Ltd (25% share) | 30 June | 668,430 | 630,594 | 644,708 |
| Dunedin International Airport Ltd (50% share) | 30 June | 44,332 | 44,606 | 46,080 |
| Hawkes Bay Airport Ltd (50% share) | 30 June | 13,789 | 17,049 | 17,895 |
Mixed Ownership Model companies | ||||
| Mighty River Power (51.76% share) | 30 June | 3,181,748 | Not Available | Not Available |
| Genesis Power Ltd (52.50% share) | 30 June | 1,949,710 | Not Available | Not Available |
| Meridian Energy Ltd (51.02% share) | 30 June | 4,688,000 | Not Available | Not Available |
| Air New Zealand Ltd (52.80% share) | 30 June | 1,816,000 | Not Available | Not Available |
Entities the Crown has a partial interest in | ||||
| Tamaki Redevelopment Company Ltd | 30 June | 5,165 | Not Available | Not Available |
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Monitoring of ACC and Housing NZ Corporation | 2012/13 | 1,361 | 1,361 | 1,361 | 1,361 | 1,361 |
| SSRSS and KiwiSaver funding removal | 2012/13 | (34) | (34) | (34) | (34) | (34) |
| Efficiency Savings | 2012/13 | (50) | (50) | (50) | (50) | (50) |
Reasons for Change in Appropriation#
A one-off transfer into 2013/14 for increased monitoring resources ceases in 2014/15.
Conditions on Use of Appropriation#
| Reference | Conditions |
|---|---|
| Operational Advice to Government | The Treasury applies a random sampling approach to assess the technical quality of operational and policy advice. This process will ensure that at least one stream of operational advice from the Crown Ownership Monitoring Unit is selected. |
Crown Company Monitoring Advice to the Minister of Science and Innovation and the Minister for Economic Development (M84)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 483 | 480 | 484 |
| Revenue from the Crown | 483 | 480 | 484 |
| Revenue from Others | - | - | - |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to ensure appropriate financial and social returns, and long-term value is achieved from Crown research institutes and Crown entities monitored under this appropriation.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Board appointments completed for Crown Research Institutes and other entities. | 23 directors | 20 directors | 25 directors |
| Technical quality of operational advice papers regarding ownership, performance monitoring and governance as assessed through the general Treasury policy advice quality assessment process. | At least an average of 70% | 66% | At least an average of 70% |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Statement of Estimated and Forecast Net Worth of Entities Owned#
The Minister of Science and Innovation and the Minister of Economic Development are responsible Ministers for the Government's ownership interests in CRIs and some Crown entities (the Minister of Finance is the other shareholding Minister). The estimated net worth (total assets less total liabilities) for CRIs and the larger Crown entities, which are monitored under this appropriation, are listed in the table below.
Changes in net worth result from the net effects of profit (after tax), dividends paid, and capital injections or withdrawals. The data for these organisations are based on forecasts provided for inclusion in the 2014 Budget.
| Balance date | 2013 Actual Net Worth $000 | 2014 Estimated Net Worth $000 | 2015 Forecasted Net Worth $000 | |
Entities for which we undertake a secondary monitoring role with the Ministry of Business, Innovation and Employment | ||||
| AgResearch Ltd | 30 June | 213,193 | 211,139 | 218,949 |
| Institute of Environmental Science & Research Ltd | 30 June | 39,118 | 39,118 | 39,118 |
| Institute of Geological & Nuclear Sciences Ltd | 30 June | 27,746 | 27,746 | 27,746 |
| Landcare Research New Zealand Ltd | 30 June | 27,774 | 27,774 | 27,774 |
| National Institute of Water & Atmospheric Research Ltd | 30 June | 100,436 | 100,436 | 100,436 |
| Scion | 30 June | 29,222 | 29,222 | 29,222 |
| The New Zealand Institute for Plant & Food Research Ltd | 30 June | 71,821 | 71,821 | 71,821 |
| Research & Education Advanced Network NZ Ltd | 30 June | 23,166 | 23,166 | 23,166 |
| New Zealand Venture Investment Fund Ltd | 30 June | 95,900 | 95,900 | 95,900 |
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| SSRSS and KiwiSaver | 2012/13 | (11) | (11) | (11) | (11) | (11) |
| Efficiency savings | 2012/13 | (10) | (9) | (9) | (9) | (9) |
Conditions on Use of Appropriation#
| Reference | Conditions |
|---|---|
| Operational advice to Government | The Treasury applies a random sampling approach to assess the technical quality of operational and policy advice. This process will ensure that at least one stream of operational advice from the Crown Ownership Monitoring Unit is selected. |
Implementation of Mixed Ownership Model (M31)#
Scope of Appropriation and Expenses#
| Type, Title, Scope and Period of Appropriations | Appropriations, Adjustments and Use | $000 |
|---|---|---|
Implementation of Mixed Ownership Model (M31)This appropriation is limited to the policy, operational, and transactional work to implement the Mixed Ownership Model.Commences: 15 December 2011 Expires: 30 June 2015 | Original Appropriation | 46,802 |
| Adjustments to 2012/13 | - | |
| Adjustments for 2013/14 | (17,485) | |
| Adjusted Appropriation | 29,317 | |
| Actual to 2012/13 Year End | 16,984 | |
| Estimated Actual for 2013/14 | 10,160 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 2,173 |
Revenue#
| Budget $000 | |
|---|---|
| Revenue from the Crown to end of 2014/15 | 26,970 |
| Revenue from Others to end of 2014/15 | 174 |
| Total Revenue | 27,144 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to achieve a deepening of capital markets, an enhancement of capital market disciplines and reduced pressure on the Crown to borrow for capital projects.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Technical quality of operational advice papers regarding ownership, performance monitoring and governance as assessed through the general Treasury policy advice quality assessment process. | At least an average of 70% | At least an average of 70% | At least an average of 70% |
| Sufficient domestic demand is created such that 85 - 90% of shares are held by New Zealanders. | Achieved | Achieved | Achieved |
| The process for each Initial Public Offering exceeds an agreed reserve value. | Achieved | Achieved | Achieved |
| The costs of the sale programme do not exceed 2% of the sale proceeds. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Setting up the Implementation of Mixed Ownership Model | 2011/12 | 15,313 | 1,000 | - | - | - |
Reasons for Change in Appropriation#
Changes in the appropriation reflect the timing of the partial asset sale programme and the attributions of costs across the related appropriations.
Policy Advice - Finance (M31)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 34,898 | 32,655 | 34,704 |
| Revenue from the Crown | 34,866 | 32,623 | 34,692 |
| Revenue from Others | 32 | 32 | 12 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to enable and facilitate Ministerial decision-making that achieves for New Zealand improved economic performance; a high performing State sector; and a stable and sustainable macroeconomic environment.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
Existing measures | |||
| Technical quality of policy advice papers assessed by a survey with a methodical robustness of 90% (see Note 1). | At least an average of 70% | At least an average of 70% | At least an average of 70% |
| The satisfaction of the Minister of Finance with the policy advice service, as per the common satisfaction survey. | At least 70% | At least 70% | At least 70% |
| The total cost per hour of producing outputs. | $159 | $158 | $159 |
| The welfare system operates further in line with the investment approach, based on the external valuation (see Note 2). | Achieved | Achieved | Achieved |
| Budget decisions are in line with short-term fiscal intentions in the Budget Policy Statement (BPS). | Achieved | Achieved | Achieved |
| Significant Regulatory Impact Statements meet most or all of Regulatory Impact Analysis Requirements. | 90% | 85% | 90% |
| Tax revenue forecast error on one-year-ahead forecasts. | Less than +/- 3% | Less than +/- 3% | Less than +/- 3% |
| Production of advice that provides options which allow the Government to deliver a credible fiscal strategy consistent with the fiscal prudence provisions of the Public Finance Act 1989. Where this advice is underpinned by modelling, major models are externally Quality Assured and, where appropriate, assumptions are tested with suitably qualified external experts. | Achieved | Achieved | Achieved |
Expiring measures | |||
| The percentage of agencies who receive "strong" or "well-placed" PIF ratings for Working for Others. | 55% | 50% of all reviewed agencies in the consolidated report. | Expired measure |
| The long-term fiscal statement (published in July 2013) is credible and robust. | Achieved | Achieved | Expired measure |
| The Treasury remains amongst the top two forecasters of the New Zealand economy in forecasting GDP and CPI over a rolling 10-year period. | Achieved | Achieved | Expired measure |
Note 1 - The higher the robustness score, the stronger the methodological quality of the completed assessment.
Note 2 - Through its Vote role and role as the external monitor of Work and Income (a division of the Ministry of Social Development), the Treasury will help to ensure:
- a plan for implementing the Investment Approach has been fully developed
- ongoing valuations of the benefit system are completed, and
- progress is made on providing the Ministry of Social Development with flexibility over funding to enable it to allocate resource in accordance with the valuation.
Standards of Policy Advice#
| Reference | Conditions |
|---|---|
| Quality Standards for Policy Advice | This Quality Standard for Policy Advice sets out the characteristics or dimensions of policy advice that will best enable it to promote well-informed, high-quality decision-making by Ministers. However, the quality dimensions below are not a checklist and not all dimensions will be equally important in every case - judgements are required at the outset about how to apply and balance the quality dimensions to ensure a particular piece of advice is fit for purpose in achieving the result sought. When undertaking a piece of work, explicit consideration needs to be given to the following:
|
Dimensions of Policy Advice#
| Advice Analytically Rigorous (Analysis): | Set in a Wider Strategic Context (Applied Analysis): | Customer-focused and Persuasive (Advice): |
Relevant Frameworks
| Strategic
| Clear and well-writtenAdvice is compellingly presented. It is:
|
Robust Reasoning and LogicAdvice has a clear purpose, problem definition, evaluation of options against criteria, and assessment of risks and opportunities. We come to a conclusion and give action-oriented recommendations. | Practical
| TimelyAdvice is timed for when it can have the greatest influence and for when it best helps in the decision-making process (even if it means, at times, that advice is not fully developed). It should indicate when a decision is required (unless there is no deadline). |
Evidence-basedAnalysis is supported by relevant evidence:
| Public Sector ConsultationMinisters receive advice that enables them to engage with their colleagues on a fully informed basis because:
| Politically Aware AdviceAdvice:
|
Free and frankOur advice is honest, impartial and politically neutral - we have a duty to alert Ministers 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. | Perspectives of wider stakeholders
| Solution-focusedWe are proactive, anticipating, as well as responding to, Ministers' needs. Advice is action-oriented and suggests a clear way forward ("Here is what you can do" as well as "Here is a problem") and includes a range of practical options (first best advice, but also second and third). |
Effective communicationWe communicate our advice based on how to most effectively engage with the customer, including:
|
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Social Housing work | 2013/14 | 1,942 | 2,817 | - | - | - |
| Monitoring of Phase 2 of Welfare Reforms | 2013/14 | 750 | 750 | - | - | - |
| SSRSS and KiwiSaver funding removal | 2012/13 | (916) | (916) | (916) | (916) | (916) |
| Efficiency Savings | 2012/13 | (585) | (522) | (522) | (522) | (512) |
Reasons for Change in Appropriation#
The decrease relates to the cessation of one-off transfers into 2013/14 for project work. This was partially offset by savings in 2013/14 associated with the monitoring of phase 2 of Welfare Reforms.
Provision of Financial Operations Services and Operational Advice (M31)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 33,186 | 32,323 | 29,251 |
| Revenue from the Crown | 29,772 | 28,909 | 27,050 |
| Revenue from Others | 3,012 | 3,012 | 2,201 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to improve economic performance and financial stewardship across the State Sector, export and financial markets, through provision of relevant and timely operational support, services and advice.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
Existing measures | |||
| Management of liabilities and investigation of mechanisms to discharge the Crown's obligations in a timely manner ensuring any costs from the materialisation of liabilities are contained (see Measurement Standards). | Achieved | Achieved | Achieved |
| Agencies comply with Cabinet's capital approval requirements and the Better Business Cases standard. | 100% | 100% | 100% |
| All new significant operating expenditure proposals received during the budget process are subject to cost benefit analysis (or similar) (see Measurement Standards). | 100% | 100% | 100% |
| Improvement in Benchmarking Administrative and Support Services effectiveness and efficiency indicators. | Achieved | Achieved | Achieved |
| Audit opinion issued by the Controller and Auditor-General on the Financial Statements of Government. | Unqualified | Unqualified | Unqualified |
| Two Economic and Fiscal Updates produced, clearly explained and with conclusions tested with external panels. | Achieved | Achieved | Achieved |
| Monthly Financial Statements of Government produced in accordance with the PFA requirements and free from material errors. | Achieved | Achieved | Achieved |
| Compliance with risk management policies and parameters for management of Crown lending and Crown bank accounts. | No breaches | No breaches | No breaches |
| Provide advice to Ministers on the risk status of major monitored projects and options for mitigation of those risks, through the tri-annual reporting process for all monitored projects and through interim briefings as required. | 100% of advice and reports are provided | Achieved | 100% of advice and reports are provided |
| Maintain Gateway as the essential assurance methodology for major capital investments in the system. | Complete at least 13 Gateway reviews in 2013/14, and 85% of Senior Responsible Owners agree "Review was beneficial and will impact positively on the outcome of the programme/project" and "Report's recommendations will enable me to achieve improvements in the project's outcomes." | 17 Reviews completed between December 2013 and June 2014 and at least 85% of Senior Responsible Owners agree "Review was beneficial and will impact positively on the outcome of the programme/project" and "Report's recommendations will enable me to achieve improvements in the project's outcomes." | Complete at least 24 reviews and 85% of Senior Responsible Owners agree "Review was beneficial and will impact positively on the outcome of the programme/project" and "Report's recommendations will enable me to achieve improvements in the project's outcomes." |
Expired measures | |||
| Agencies' or Sectors' Four-year Plans outline a credible medium-term plan for living within baselines and delivering the Government's priorities. | 100% | 40% | Expired measure |
| Asset performance indicators developed for key social assets. | Key indicators agreed, collected, and used in analysis | Achieved | Expired measure |
| Infrastructure State of the Nation report produced by 30 June. | Achieved | Achieved | Expired measure |
New measures | |||
| National Infrastructure Plan 2015 produced by 30 June 2015. | N/A | N/A | Achieved |
Replacement measures | |||
| Enhance the collection and use of agreed asset based performance information. | N/A | N/A | Achieved |
| Percentage of Four-year Plans submitted by agencies that meet the criteria expected of a credible medium term strategic plan. | N/A | N/A | 60% target |
New Zealand Export Credit Office | |||
Existing measures | |||
| New export credit policies underwritten. | 82 | 70 | 80 |
| New exports supported. | $305 million | $275 million | $300 million |
| New exposure of export credit policies. | $125 million | $110 million | $120 million |
| Compliance with International Guidelines (OECD and WTO) and Delegated Mandate. | 100% | 100% | 100% |
| Forecast total external engagements in 2011/12. | 370 | 380 | 420 |
Expiring measures | |||
| Operating Expense/Earned Premium plus Application Fees ratio. | Maintained or declining | Declining (65%) | Expired measure |
| Complaints received regarding delivery of services or complaints are due to issues outside of NZECO's mandate. | None | None | Expired measure |
| Claims and Provisions/Total exposure and undrawn commitments ratio. | Lower than or comparable to other ECA long-run ratios of between 4% - 9% | Not achieved | Expired measure |
New measures | |||
| Five-year Loss Ratio (Claims Paid & Reserved / Premium Earned. | N/A | N/A | lower than 35% |
| Since inception Loss Ratio (Total Claims Paid & Reserved /Total Premium Earned). | N/A | N/A | lower than 35% |
Note - The Gateway function was transferred to the Treasury from the State Services Commission from 1 December 2013. 2013/14 numbers represent performance from that date.
Measurement Standards#
| Reference | Conditions |
|---|---|
| Management of liabilities and investigation of mechanisms to discharge the Crown's obligations in a timely manner ensuring any costs from the materialisation of liabilities are contained. | The output class covers the management and resolution of contingent or actual liabilities associated with various Crown commitments and assets - for instance, gas and geothermal reserves, Treaty settlements and New Zealand House. In some cases, the Treasury is a provider of second-opinion advice rather than a lead agency on these matters. |
| All new significant operating expenditure proposals are subject to cost benefit analysis (or similar). | The analysis should cover:
|
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Optimise Finance Initiative | 2012/13 | 1,036 | - | - | - | - |
| SSRSS and KiwiSaver funding removal | 2012/13 | (123) | (123) | (123) | (123) | (123) |
| Efficiency Savings | 2012/13 | (36) | (33) | (33) | (33) | (33) |
| Analysis for Outcomes: Better use of the Data to Improve Outcomes | 2013/14 | 2,080 | 2,380 | 2,380 | 2,303 | 2,319 |
Reasons for Change in Appropriation#
The decrease in this appropriation for 2014/15 is mainly due to the removal of one-off funding in 2013/14 for the Optimise Finance project of $1.600 million, recoverable expenditure of $1.500 million and expense transfers for a range of projects of $2.200 million. These are partially offset by increases for the full year operation of Analysis for Outcomes, and Gateway and Major Project Monitoring activities that transferred from the State Services Commission from 1 December 2013.
Provision of Financial Services to the New Zealand Local Government Funding Agency RDA (M31)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 165 | 165 | 165 |
| Revenue from the Crown | - | - | - |
| Revenue from Others | 165 | 165 | 165 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to deliver high quality administrative services to the New Zealand Local Government Funding Agency to enable them to optimise the debt funding terms and conditions for participating Local Authorities.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Agreed service level standards are met. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Shared Support Services (M31)#
Scope of Appropriation#
Expenses and Revenue#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 9,654 | 9,654 | 10,400 |
| Revenue from the Crown | - | - | - |
| Revenue from Others | 9,654 | 9,654 | 10,400 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to achieve quality, efficient support services for other agencies.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Service level standards are met to the standards and timeframes agreed with the three central agencies. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Reasons for Change in Appropriation#
The increase in this appropriation for 2014/15 is due to the shared support services provided through the Treasury for emergency management functions that became part of the Department of Prime Minister and Cabinet from 1 April 2014.
2.3 - Departmental Capital Expenditure and Capital Injections#
The Treasury - Capital Expenditure PLA (M31)#
Scope of Appropriation
Capital Expenditure
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Forests/Agricultural | - | - | - |
| Land | - | - | - |
| Property, Plant and Equipment | 1,946 | 1,946 | 2,593 |
| Intangibles | 4,175 | 4,175 | 2,240 |
| Other | - | - | - |
Total Appropriation | 6,121 | 6,121 | 4,833 |
What is Intended to be Achieved with this Appropriation
This appropriation is intended to achieve the renewal, upgrade or redesign of assets in support of the delivery of Treasury services.
How Performance will be Assessed and End of Year Reporting Requirements
Expenditure is in accordance with the Treasury capital asset management plan.
End of Year Performance Reporting
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Capital Injections and Movements in Departmental Net Assets
The Treasury
| Details of Net Asset Schedule | 2013/14 Estimated Actual $000 | 2014/15 Projected $000 | Explanation of Projected Movements in 2014/15 |
|---|---|---|---|
| Opening Balance | 8,957 | 12,660 | |
| Capital Injections | 4,105 | 700 | Ongoing development of the Business Information Hub system which will assist in the management of debt and investments. |
| Capital Withdrawals | - | - | |
| Surplus to be Retained (Deficit Incurred) | (402) | - | |
| Other Movements | 402 | - | |
Closing Balance | 13,062 | 13,360 |
Part 3 - Details of Non-Departmental Appropriations#
3.1 - Non-Departmental Output Expenses#
Management of New Zealand House, London (M31)
Scope of Appropriation
Expenses
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 1,000 | 300 | 1,000 |
What is Intended to be Achieved with this Appropriation
The appropriation is intended to achieve property management services in respect of New Zealand House, London.
End of Year Performance Reporting
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental output expense is less than $5 million.
Service Providers
Services are provided through Jones Lang International Property Consultants, London.
Management of the Crown's Obligations for Geothermal Wells (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 295 | 145 | 151 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve management and maintenance relating to geothermal wells and associated sites and structures for which the Crown accepts responsibility.
End of Year Performance Reporting#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental output expense is less than $5 million.
Service Providers#
Services will be provided by Aurecon Limited and other providers if required.
Reasons for Change in Appropriation#
The reduction in 2014/15 reflects the cessation of a short term increase in 2013/14 due to an expense transfer from 2012/13 for remedial work on redundant geothermal assets at Wairakei.
Management of the New Zealand Superannuation Fund (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 528 | 408 | 528 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the management and administration of the Guardians of New Zealand Superannuation Fund.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| The Guardians of New Zealand Superannuation manage and administer the Fund in accordance with their Statement of Intent. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Government Superannuation Fund Authority in their 2014/15 Annual Report to be tabled in the House.
3.3 - Non-Departmental Borrowing Expenses#
Debt Servicing PLA (M31)#
Scope of Appropriation
Expenses
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 3,554,913 | 3,554,913 | 3,622,323 |
What is Intended to be Achieved with this Appropriation
The appropriation is intended to achieve the payment of borrowing expenses for the Crown's New Zealand-dollar and foreign-currency debt, authorised by section 60(1)b of the Public Finance Act 1989.
Reasons for Change in Appropriation
The change reflects forecast interest rate movements and the amount of debt outstanding.
3.4 - Non-Departmental Other Expenses#
Crown Residual Liabilities (M31)#
Scope of Appropriation
Expenses
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 455 | 55 | 230 |
What is Intended to be Achieved with this Appropriation
The appropriation is intended to achieve the administration of residual obligations arising from the Crown's sale and purchase agreements with SOEs and Crown entities and from the sale of Crown investments, and for the settlement of claims against the Crown arising from exposure to asbestos.
End of Year Performance Reporting
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental other expense is less than $5 million.
Reasons for Change in Appropriation
An expense transfer of $225,000 was approved from 2012/13 to reflect the uncertain nature of expenditure in addressing the obligations associated with residual Crown liabilities.
Direct Sale costs for Implementing the Mixed Ownership Model (M31)#
Scope of Appropriation and Expenses#
| Type, Title, Scope and Period of Appropriations | Appropriations, Adjustments and Use | $000 |
|---|---|---|
Direct Sale costs for Implementing the Mixed Ownership Model (M31)This appropriation is limited to the direct sales costs of implementing the Mixed Ownership Model.Commences: 15 December 2011 Expires: 30 June 2015 | Original Appropriation | 56,000 |
| Adjustments to 2012/13 | - | |
| Adjustments for 2013/14 | 6,485 | |
| Adjusted Appropriation | 62,485 | |
| Actual to 2012/13 Year End | 21,511 | |
| Estimated Actual for 2013/14 | 38,974 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 2,000 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to achieve a deepening of capital markets, an enhancement of capital market disciplines and reduced pressure on the Crown to borrow for capital projects.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Sufficient domestic demand is created such that 85 - 90% of shares are held by New Zealanders. | Achieved | Achieved | Achieved |
| The process for each initial Public Offering exceeds an agreed reserve value. | Achieved | Achieved | Achieved |
| The costs of the sale programme do not exceed 2% of the sale proceeds. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Minister of Finance in the Treasury's 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Direct Sale costs for Implementing the Mixed Ownership Model | 2011/2012 | 6,000 | - | - | - | - |
Reasons for Change in Appropriation#
Direct sale costs of implementing the Mixed Ownership Model have been aligned with the timing of partial asset sales.
Geothermal Wells Fund (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 500 | - | 500 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve meeting the costs of one-off unforeseen events relating to those geothermal wells for which the Crown accepts responsibility.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental output expense is less than $5 million.
Government Superannuation Appeals Board (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 50 | 50 | 50 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the on-going operations of the Government Superannuation Appeals Board.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for payments of board fees, disbursements and allowances. Performance information relating to the administration of the payment is provided under the Provision of Financial Operations Services and Operational Advice appropriation.
Government Superannuation Fund Authority - Crown's Share of Expenses PLA (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 27,856 | 27,856 | 28,523 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the management and administration of the Government Superannuation Fund and the schemes, authorised by sections 15E and 95 of the Government Superannuation Act 1956 through payment of the Crown's share of the expenses of the Government Superannuation Fund Authority.
How Performance will be Assessed and End of Year Reporting Requirements#
Performance information for this appropriation will be reported by the Government Superannuation Fund Authority in the Government Superannuation Fund Authority in their 2014/15 Annual Report to be tabled in the House.
Reasons for Change in Appropriation#
The Crown's share of expenses for the management and administration of the Government Superannuation Fund Unfunded Liability was increased to reflect the latest forecast of expenses following the 28 February 2014 Government Superannuation Fund revaluation.
Government Superannuation Fund Unfunded Liability PLA (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 619,174 | 619,174 | 735,397 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to recognise the Crown's liability to the Government Superannuation Fund and the specified superannuation contribution withholding tax on employer contributions by the Crown as authorised by section 95AA of the Government Superannuation Act 1956 in accordance with generally accepted accounting practice.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for technical accounting treatment of the Crown's liability.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Budget 2010 Tax Package | 2011/12 | 17,000 | - | - | - | - |
Reasons for Change in Appropriation#
The increase in this appropriation for 2014/15 reflects the valuation of the liability based on the 28 February 2014 Government Superannuation Fund revaluation.
Impairment of Loans to Taitokerau Forest Limited (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 200 | - | 200 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to provide for the impairment of new loans to Taitokerau Forests Limited in accordance with generally accepted accounting practice.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the technical accounting treatment under the loan agreement with Taitokerau Forests Limited.
Landcorp Protected Land Agreement - Operating (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 4,857 | 1,857 | 2,000 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve providing for operating costs incurred under the Landcorp Protected Land Agreement.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s.15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental other expense is less than $5 million.
Reasons for Change in Appropriation#
The decrease in appropriation reflects an expense transfer into 2013/14 from 2012/13 to address additional costs and lower offsetting revenue associated with the drought in February 2013.
Loyalty Bonus Scheme Related to Initial Public Offers (M31)#
Scope of Appropriation and Expenses#
| Type, Title, Scope and Period of Appropriations | Appropriations, Adjustments and Use | $000 |
|---|---|---|
Loyalty Bonus Scheme Related to Initial Public Offers (M31)This appropriation is limited to expenses incurred by allocating shares under a loyalty bonus scheme to eligible investors in initial public offers.Commences: 01 March 2013 Expires: 30 June 2016 | Original Appropriation | 40,000 |
| Adjustments to 2012/13 | - | |
| Adjustments for 2013/14 | 12,100 | |
| Adjusted Appropriation | 52,100 | |
| Actual to 2012/13 Year End | 24,677 | |
| Estimated Actual for 2013/14 | 22,000 | |
| Estimated Actual for 2014/15 | - | |
| Estimated Appropriation Remaining | 5,423 |
What is Intended to be Achieved with this Appropriation#
This appropriation is intended to achieve the implementation of a Loyalty Bonus Share Issue from Initial Public Offers.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Sufficient domestic demand is created such that 85 - 90% of shares are held by New Zealanders. | Achieved | Achieved | Achieved |
| The process for each Initial Public Offering exceeds an agreed reserve value. | Achieved | Achieved | Achieved |
| The costs of the sale programme do not exceed 2% of the sale proceeds. | Achieved | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Minister of Finance in the Treasury's 2014/15 Annual Report.
Current and Past Policy Initiatives#
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Loyalty Bonus Scheme Related to Initial Public Offers - Genesis | 2013/14 | 1,100 | - | - | - | - |
Reasons for Change in Appropriation#
This appropriation was established to cover the costs of running a Loyalty Bonus Share Issue from Initial Public Offers as part of the partial asset sale programme. It has been used in the Mighty River Power in 2012/13 and Genesis Initial Public Offers in 2013/14.
National Provident Fund Schemes - Liability Under Crown Guarantee PLA (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 26,000 | 26,000 | 25,000 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the recognition of the net increase (excluding actuarial gains and losses) in the Crown's liability for benefits payable to members of National Provident Fund schemes under the Crown guarantee in section 60 of the National Provident Fund Restructuring Act 1990. This appropriation is authorised by section 66 of the National Provident Fund Restructuring Act 1990.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for costs payable to the National Provident Fund Scheme. Further information about the performance of the Scheme can be found in the National Provident Fund's annual report.
Reasons for Change in Appropriation#
The decrease reflects a revised forecast for the expected interest costs in relation to the National Provident Fund liability.
New Zealand House - Renegotiation of Lease Arrangements (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 200 | 200 | 1,000 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to provide for activities necessary to re-gear the lease on New Zealand House.
How Performance will be Assessed and End of Year Reporting Requirements#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
| Activities undertaken in accordance with Ministerial expectations. | N/A | Achieved | Achieved |
End of Year Performance Reporting#
Performance information for this appropriation will be reported by the Minister of Finance in the Treasury's 2014/15 Annual Report.
Reasons for Change in Appropriation#
The increase in funding reflects the timing of expenditure necessary to be incurred in the lease negotiations of New Zealand House.
New Zealand House, London (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 12,800 | 11,800 | 12,000 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the correct payment of operational costs to maintain and manage New Zealand House, London.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for costs payable to the New Zealand Government Property Corporation to fund the operations of New Zealand House in London. Performance information related to the administration of the payment is provided in the Treasury's annual report.
Service Providers#
Services are provided by the New Zealand Government Property Corporation.
Reasons for Change in Appropriation#
The decrease reflects the anticipated impact of exchange rate movements, maintenance costs and a transfer of funding to support the renegotiation of lease arrangements for New Zealand House.
Taitokerau Forests Limited Grant (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 244 | 244 | 200 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve grants to Taitokerau Forests Limited for on-payment to forest owners, payable upon harvest of the forests.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental other expenses is less than $5 million.
Reasons for Change in Appropriation#
In 2013/14, an expense transfer of $44,000 was approved from 2012/13 to address the uncertain timing of grant payments as it is related to timing of forest harvests.
Unclaimed Money PLA (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 250 | 150 | 250 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the repayment of money authorised by section 74(5) of the Public Finance Act 1989.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the repayment of unclaimed money to claimants and is performed in accordance with section 74(5) of the Public Finance Act 1989.
Unclaimed Trust Money PLA (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 250 | 50 | 250 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the repayment of money authorised by section 70(2) of the Public Finance Act 1989.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for the repayment of unclaimed money to claimants and is performed in accordance with section 70(2) of the Public Finance Act 1989.
Unwind of Discount Rate used in the Present Value Calculation of Payment under Crown Deed of Support with AMI (M31)#
Scope of Appropriation#
Expenses#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 15,295 | 15,295 | 13,497 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to achieve the recognition of the expense incurred in unwinding the discount rate used in the present value calculation of the liability as the liability nears settlement.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for technical accounting treatment under the Crown Deed of Support with AMI.
Reasons for Change in Appropriation#
The movement reflects a revised forecast for the expected unwind of the discount rate in relation to the Crown Support Deed.
3.5 - Non-Departmental Capital Expenditure#
International Financial Institutions PLA (M31)#
Scope of Appropriation
Capital Expenditure
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 212,000 | 212,000 | 30,500 |
What is Intended to be Achieved with this Appropriation
The appropriation is intended to provide for the capital expenditure for shares subscribed to by New Zealand as a member of International Financial Institutions, as authorised by section 5 of the International Finance Agreements Act 1961.
How Performance will be Assessed and End of Year Reporting Requirements
An exemption was granted under s15D(2)(b)(ii) of the PFA, as additional information is unlikely to be informative because this appropriation is solely for payments of share subscriptions as a member of International Financial Institutions. Performance information relating to the administration of the payment is provided under the Policy Advice - Finance appropriation.
Reasons for Change in Appropriation
Forecasts have been aligned to latest information provided by International Financial Institutions on anticipated requests for additional capital.
Landcorp Protected Land Agreement - Capital (M31)#
Scope of Appropriation#
Capital Expenditure#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 4,409 | 4,409 | 2,000 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to provide for capital investments incurred under the Landcorp Protected Land Agreement.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental capital expenditure is less than $15 million.
Reasons for Change in Appropriation#
The decrease in appropriation reflects an expense transfer into 2013/14 from 2012/13 to address additional costs and lower offsetting revenue associated with the drought in February 2013.
New Zealand House, London, capital (M31)#
Scope of Appropriation#
Capital Expenditure#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 750 | 750 | 750 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to provide for capital expenditure in relation to New Zealand House, London.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental capital expenditure is less than $15 million.
Taitokerau Forests (M31)#
Scope of Appropriation#
Capital Expenditure#
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
| Total Appropriation | 1,700 | 1,700 | 1,300 |
What is Intended to be Achieved with this Appropriation#
The appropriation is intended to provide for loans to Taitokerau Forests Ltd for forest management and development.
How Performance will be Assessed and End of Year Reporting Requirements#
An exemption was granted under s15D(2)(b)(iii) of the PFA as the amount of this annual appropriation for non-departmental capital expenditure is less than $15 million.
Reasons for Change in Appropriation#
The decrease reflects the variable nature in the timing of draw-downs of the Taitokerau Forests Limited loan facility.
Part 4 - Details of Multi-Category Expenses and Capital Expenditure#
Multi-Category Expenses and Capital Expenditure#
Inquiries and Research into Productivity Related Matters (M31)
Overarching Purpose Statement
Scope of Appropriation
Non-Departmental Output Expenses
Inquiries into Productivity - Related MattersThis category is limited to inquiries undertaken by the New Zealand Productivity Commission in accordance with the New Zealand Productivity Commission Act 2010.
Research into and Promotion of Productivity - Related Matters
This category is limited to the New Zealand Productivity Commission undertaking research into and promoting public understanding of productivity related matters in accordance with the New Zealand Productivity Commission Act 2010.
Expenses, Revenue and Capital Expenditure
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Budgeted $000 | Estimated Actual $000 | Budget $000 | |
Total Appropriation | - | - | 5,030 |
Non-Departmental Output Expenses | |||
| Inquiries into Productivity - Related Matters | - | - | 4,527 |
| Research into and Promotion of Productivity - Related Matters | - | - | 503 |
Comparators for Restructured Appropriation
The previous MCOA 'Inquiries and Research into Productivity Related Matters MCOA' has been converted into a MCA.
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Vote, Type and Title of Appropriation | Budgeted $000 | Estimated Actual $000 | Budget $000 |
Vote Finance | |||
Non-Departmental Output Expenses | |||
| Inquiries into Productivity - Related Matters | 4,527 | 4,527 | - |
| Research into and Promotion of Productivity - Related Matters | 503 | 503 | - |
| Total | 5,030 | 5,030 | 5,030 |
What is Intended to be Achieved with this Appropriation
The appropriation is intended to achieve:
- inquires in accordance with the New Zealand Productivity Commission Act 2010, and
- research in accordance with the New Zealand Productivity Commission Act 2010.
How Performance will be Assessed for this Appropriation
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
Inquiries and Research into Productivity Related Matters | |||
| The Board of the New Zealand Productivity Commission will meet to manage and administer in accordance with their Statement of Intent. | Achieved | Achieved | Achieved |
What is Intended to be Achieved with each Category and How Performance will be Assessed
| 2013/14 | 2014/15 | ||
|---|---|---|---|
| Assessment of Performance | Budgeted Standard | Estimated Actual Standard | Budget Standard |
Inquiries and Research into Productivity Related Matters | |||
Non-Departmental Output Expenses | |||
Inquiries into Productivity - Related Matters | |||
| This category is intended to achieve the delivery of inquires by the New Zealand Productivity Commission, in accordance with the Terms of Reference issued by referring Ministers. | |||
| The Commission's recommendations are agreed and implemented - as a result of their recommendations (typically through inquiry work), better decisions are made that lead to improved productivity. | Achieved | Achieved | Achieved |
| Improved productivity analysis and advice in New Zealand - scarce resources for productivity work are better coordinated, leading to more influential and effective research outcomes. | Achieved | Achieved | Achieved |
| Improved public understanding of productivity issues - people and organisations gain a better understanding of what productivity is and why it is important, increasing the likelihood that productivity improvements are made. | Achieved | Achieved | Achieved |
Research into and Promotion of Productivity - Related Matters | |||
| This category is intended to achieve the delivery of research activity and outputs as determined by the New Zealand Productivity Commission. | |||
| Define and undertake research on, and promote understanding of, productivity-related matters. The Commission will publish research papers and further the development of collaborative research partnerships. As part of their collaboration, they will work with other government agencies and the wider research community through chairing the 'Productivity Hub'. | Achieved | Achieved | Achieved |
End of Year Performance Reporting
Performance information for this appropriation will be reported by the Treasury in its 2014/15 Annual Report.
Current and Past Policy Initiatives
| Policy Initiative | Year of First Impact | 2013/14 Budgeted $000 | 2014/15 Budget $000 | 2015/16 Estimated $000 | 2016/17 Estimated $000 | 2017/18 Estimated $000 |
|---|---|---|---|---|---|---|
| Inquiries , Reviews and Research into Productivity - Related Matters | 2010/11 | 5,030 | 5,030 | 5,030 | 5,030 | 5,030 |