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SCHEDULE OF NON-DEPARTMENTAL REVENUE AND RECEIPTS

for the year ended 30 June 2017

This schedule summarises revenues and receipts the Ministry collects on behalf of the Crown.

2016
Actual
$000

  Note

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

1,536,566 Indirect taxation 2 1,636,154 1,537,780 1,615,006
985 Other ‘sovereign power’ revenue 3 189 1,300 1,300
9,621 Other operational revenue 4 10,362 8,760 8,760
(8,428) Share of net asset increase/(decrease) in joint venture airports   (1,605) - -
1,538,744 Total non-departmental revenue and receipts   1,645,100 1,547,840 1,625,066

SCHEDULE OF NON-DEPARTMENTAL EXPENSES

for the year ended 30 June 2017

This schedule summarises expenses the Ministry administers on behalf of the Crown. Further details are provided in the appropriation statements.

2016
Actual
$000

  Note

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

2,027,873 Non-departmental output classes 5  2,008,097  2,183,281  2,115,784
857,295 Purchase or development of capital assets 6  1,113,776  943,316  1,336,628
40,071 Other expenses to be incurred by the Crown 7  52,819  76,272  59,939
10,542 Non-departmental multi category appropriations    12,533  12,684  12,612
4,868 Bad debts expense    6,013  4,000  8,000
(555) Movement in doubtful debts provision   590 - -
2,940,094 Total non-departmental expenses   3,193,827 3,219,553 3,532,963

 

For a full understanding of the Crown’s financial position and the results of its operations for the year, refer to the consolidated Financial Statements of the Government for the year ended 30 June 2017.

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SCHEDULE OF NON-DEPARTMENTAL ASSETS

as at 30 June 2017

This schedule summarises the assets and liabilities the Ministry administers on behalf of the Crown.

2016
Actual
$000

  Note

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

  Current assets        
25,238 Cash and bank balances   77,937 20,000 20,000
39,089 Receivables and advances 8 46,341 66,442 39,090
  Non-current assets        
16,538 Investment in joint venture airports 9 15,020 26,006 17,579
80,865 Total non-departmental assets   139,298 112,448 76,669

In addition, the Ministry monitors four Crown entities:

  • Civil Aviation Authority (which includes the Aviation Security Service)
  • Maritime New Zealand
  • NZ Transport Agency
  • Transport Accident Investigation Commission.

The investment in these entities is recorded within the Crown financial statements on a line-by-line basis.
No disclosure is made in this schedule.

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SCHEDULE OF NON-DEPARTMENTAL LIABILITIES

This schedule summarises the liabilities the Ministry administers on behalf of the Crown.

2016
Actual
$000

  Note

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

  Current liabilities        
391,824 Payables 11 472,534 438,852 434,979
391,824 Total non-departmental liabilities   472,534 438,852 434,979

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STATEMENT OF NON-DEPARTMENTAL COMMITMENTS

as at 30 June 2017

This statement records those expenses to which the Crown is contractually committed and which will become liabilities, if and when the terms of the contracts are met.

2016
Actual
$000

 

2017
Actual
$000

  Operating commitments  
92,700 Other non-cancellable contracts for the supply of goods and services 95,284
92,700 Total operating commitments 95,284
  Term classification of commitments  
21,917 Not later than 1 year 23,437
23,253 More than 1 year but less than 2 years 23,949
47,530 Between 2 and 5 years 47,898
- Greater than 5 years -
92,700 Total operating commitments 95,284

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STATEMENT OF NON-DEPARTMENTAL CONTINGENT LIABILITIES

as at 30 June 2017

This statement discloses situations which exist at 30 June 2017, the ultimate outcome of which is uncertain and will be confirmed only on the occurrence of one or more future events after the date of approval of the financial statements.

 

2016
Actual
$000

   

2017
Actual
$000

 10,000  Transport Accident Investigation Commission emergency guarantee  10,000
 10,000  Total contingent liabilities  10,000

 

The Minister of Finance has issued a $10 million guarantee to the Transport Accident Investigation Commission, for use in the event of a major transport accident (air, rail or marine) where the Commission would have to hire specialist recovery equipment. This is expected to be a near permanent guarantee.

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Notes to Non-departmental Schedules and Statements

for the year ended 30 June 2017

NOTE 2: INDIRECT TAXATION

Indirect taxation is deemed to be non-exchange revenue, for the purposes of these financial statements. All other revenue is deemed to be exchange.
Revenues from road user charges and motor vehicle licensing fees are recognised on an accrual basis. Revenues from tolling and infringement fees are recognised on a cash basis.

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

1,381,114 Road user charges 1,469,470 1,361,435 1,430,768
214,128 Motor vehicle registration fees 222,927 225,301 237,157
1,595,242 Sub-total 1,692,397 1,586,736 1,667,925
(58,676) Fuel excise duty refunds (56,243) (48,956) (52,919)
1,536,566 Total indirect taxation 1,636,154 1,537,780 1,615,006

 NOTE 3: OTHER ‘SOVEREIGN POWER’ REVENUE

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

985 Infringement fees – tolls and other 189 1,300 1,300
985 Total other ‘sovereign power’ revenue 189 1,300 1,300

NOTE 4: OTHER OPERATIONAL REVENUE

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

9,108 Tolling revenue 10,030 8,400 8,400
313 Road user charges administration fees 332 360 360
200 Other revenue - - -
9,621 Total other operational revenue 10,362 8,760 8,760

NOTE 5: NON-DEPARTMENTAL OUTPUT CLASSES

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

2,027,873

This expense item is equal to the appropriations for non-departmental
output classes listed in the appropriation statements

2,008,097 2,183,281 2,115,784
2,027,873 Total non-departmental output classes 2,008,097 2,183,281 2,115,784

NOTE 6: PURCHASE OR DEVELOPMENT OF CAPITAL ASSETS

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

857,295

This expenditure is for the construction of, and improvement to, the state
highway network

1,113,776 943,316 1,336,628
857,295 Total purchase or development of capital assets 1,113,776 943,316 1,336,628

NOTE 7: OTHER EXPENSES TO BE INCURRED BY THE CROWN

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

650 Membership of international organisations 650 743 743
3,270 Rail – public policy projects 3,270 3,270 3,270
500 Rail – railway safety 500 500 500
28,264 SuperGold Card – public transport concessions for cardholders 26,386 28,129 28,320
930 Tauranga maritime incident response 13 - 106
6,457 Urban cycleways – local routes 22,000 43,630 27,000
40,071 Total other expenses to be incurred by the Crown 52,819 76,272 59,939

NOTE 8: RECEIVABLES

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

  Non-exchange revenue      
28,944 Motor vehicle registration fees 35,398 54,810 21,698
19,041 Road user charge revenue 20,339 9,201 15,000
 47,985  Total non-exchange revenue receivables  55,737  64,011  36,698
   Exchange revenue      
 2,307  Tolling revenue  2,481  2,331  2,292
 84  Infringement revenue  -  100  100
 2,391  Total exchange revenue receivables  2,481  2,431  2,392
 50,376  Sub-total  58,218  66,442  39,090
 (11,287)  Provision for doubtful debts  (11,877)  -  -
 39,089  Total receivables  46,341  66,442  39,090

For motor vehicle fees and road user charge revenue, debts are assessed for impairment regularly and provision made for non-collectable debts as shown above.

The ageing profile of receivables is shown below.

2015/2016   2016/2017

Gross
$000

 

Impairment
$000

 

Net
$000

   

Gross
$000

 

Impairment
$000

 

Net
$000

 37,078  (2,103)  34,975  Not past due  42,370  (1,200)  41,170
 4,759  (3,287)  1,472  Past due 1-90 days  3,390  (1,657)  1,733
 2,839  (1,961)  878  Past due 91-180 days  2,473  (1,414)  1,059
 3,341  (2,307)  1,034  Past due 181-365 days  3,266  (1,986)  1,280
 2,359  (1,629)  730  Past due > 365 days  6,719  (5,620)  1,099
 50,376  (11,287)  39,089  Total  58,218  (11,877)  46,341

NOTE 9: INVESTMENT IN JOINT VENTURE AIRPORTS

2016
Actual
$000

   

2017
Actual
$000

 3,250  New Plymouth  3,250
 3,664  Taupo  3,892
 5,087  Whanganui  3,788
 727  Westport  726
 941  Whakatane  498
 2,869  Whangarei  2,866
 16,538  Total investment in joint venture airports  15,020

 

2016
Actual
$000

 

2017
Actual
$000

(8,630)

Change in valuation of New Plymouth airport

-
202 Gains/ (losses) generated by the other airports (1,518)
(8,428) Share of net asset increase/(decrease) in joint venture airports (1,518)
210 Capital payments made during the year -
(8,218) Total change in investment value (1,518)

Investments in joint venture airports are accounted for using the equity method, represented by the increase or decrease in post-acquisition net assets.
The Crown has a 50 percent interest in each airport, with the other 50 percent held by the local council. The value of the investment at 30 June 2017 is based on the annual financial statements of each airport for the year ended 30 June 2016, plus capital contributions from the Crown during the year ended 30 June 2017.
New Plymouth airport was sold on 1 July 2017. This will be reflected in the Ministry’s 2017/18 annual report.
Whanganui airport was revalued at 30 June 2014. This change has now been reflected in the Ministry’s accounts based on the unaudited financial statements for the airport as at 30 June 2016.

NOTE 10: INVESTMENT IN THE NORTHERN GATEWAY TOLL ROAD

The Crown contributed $158 million to the construction of the Northern Gateway toll road. It issued infrastructure bonds to fund this and the bonds are shown in the Financial Statements of the Government. The toll revenue from the road is intended to cover the costs of the bonds. Tolling began in February 2009 and this revenue is recorded as other operational revenue in Vote Transport (note 4).
It was agreed a notional account would be kept of the ‘cost’ of the project, with an estimated interest rate charged on the contribution. The interest charge is calculated daily, based on the outstanding balance, plus interest, less tolling revenue received. The interest rate used is 6.45 percent – the average rate on the bonds issued to fund the project, plus 15 basis points. The project was modelled using an estimated rate of 6.4 percent. Further information is available at www.tollroad.govt.nz.

Since the commencement of the project

2016
Actual
$000

 

2017
Actual
$000

 158,000  Funding provided for construction  158,000
 102,164  Notional interest charged since funding first drawn  115,747
 (52,865)  Tolling revenue since February 2009  (62,895)
 207,299  Balance at 30 June  210,852

Current year

2016
Actual
$000

 

2017
Actual
$000

 203,042  Balance at 1 July  207,299
 13,365  Notional interest charge for the year  13,583
 (9,108)  Tolling revenue for the year  (10,030)
 207,299  Balance at 30 June  210,852

 NOTE 11: PAYABLES

2016
Actual
$000

 

2017
Actual
$000

2017
Budget
$000

2017
Forecast
$000

356,297

National Land Transport Fund revenue and output funding payable to the
New Zealand Transport Agency

404,639 400,000 400,000
18,594 GST payable 20,566 17,194 18,593
14,616 Motor vehicle registration third party collections 14,764 16,139 14,688
398 Output funding payable to KiwiRail 30,619 4,219 398
1,300 Road user charges refunds 1,896 1,300 1,300
537 Output funding payable to Maritime New Zealand 50 - -
82 Output funding payable to other parties - - -
391,824 Total payables 472,534 438,852 434,979

NOTE 12: FINANCIAL INSTRUMENTS

The carrying amounts of financial assets and financial liabilities in each of the PBE IPSAS 29 categories are as follows:

2016
Actual
$000

 

Actual
2015/16
$000

  Loans and receivables  
25,238 Cash and cash equivalents 77,937
39,089 Receivables and advances 46,341
64,327 Total loans and receivables 124,278
  Financial liabilities measured at amortised cost  
391,824 Payables 472,534

Credit risk is the risk a third party will default on its obligation, causing a loss to be incurred. Credit risk arises from debtors and deposits with banks.
Funds must be deposited with Westpac, a registered bank.
The maximum credit exposure for each class of financial instruments is represented by the total carrying amount of cash and cash equivalents and net debtors. There is no collateral held as security against these financial instruments, including those instruments that are overdue or impaired. Other than Westpac, there are no significant concentrations of credit risk.

 NOTE 13: MAJOR BUDGET CHANGES

Changes were made to the non-departmental budgets in the 2016/17 Supplementary Estimates. Explanations for significant variances are provided below.

Revenue and receipts

 

Budget
2017
$000

Changes in
forecast
2017
$000

Cumulative
vote
2017
$000

Indirect taxation      
Road user charges 1,361,435 69,333 1,430,768
Motor vehicle registration 225,301 11,856 237,157
Fuel excise duty refunds (48,956)  (3,963)  (52,919)
Total 1,537,780 77,226 1,615,006

Tax revenue and related fees

The National Land Transport Fund Revenue Forecasting Group meets two or three times a year to reforecast the tax revenue expected for the National Land Transport Fund, based on the current economic forecasts. The changes reflect the result of this process. 

 Non-departmental expense and capital expenditure appropriations

 

Budget
2017
$000

 

Changes in
forecast
2017
$000

 

Cumulative
vote
2017
$000

 Appropriations for non-departmental output expenses      
 Search and rescue activities  3,316  (72)  3,244
 Licensing activities  2,550  391  2,941
 National Land Transport Programme PLA  2,135,900  (68,174)  2,067,726
 Policy advice and related outputs – maritime MCA  9,295  (72)  9,223
 Search and rescue and recreational boating safety activities PLA  8,167  358  8,525
 Non-departmental other expenses      
 Bad debt provision – motor vehicle registration/ licenses and road user charges  4,000  4,000  8,000
 SuperGold Card – public transport concessions for cardholders  28,129  191  28,320
 Tauranga maritime incident response  -  106  106
 Urban cycleways – local routes  43,630  (16,630)  27,000
 Capital expenditure      
 Auckland Transport Package loan  110,000  12,200  122,200
 Aviation Security Service  4,500  (1,800)  2,700
 Joint venture airports – Crown contribution  500 541  1,041 
 Maritime New Zealand  -  1,600  1,600
 

National Land Transport Programme – new infrastructure for and renewal of State highways PLA

 943,316  393,312  1,336,628
 Rail – KiwiRail equity injection  23,600 19,000  42,600
 Rail – Wellington metro rail network upgrade  5,825  2,445  8,270
 Regional state highways  14,000  36,427  50,427
 Regional state highways MYA  41,000  (41,000)  -
 Reinstatement of South Island State Highway 1  -  69,000  69,000
 Roading – reinstatement of earthquake damaged roads in Christchurch – loan  114,000  (39,000)  75,000
Urban cycleways – crown assets 7,600 (3,600) 4,000

Explanations for the major changes were outlined in the 2016/17 Supplementary Estimates (page 689 onwards). They were:

Search and rescue activities
The appropriation decreased by $0.072 million due to the decrease in the capital charge rate.

Licensing activities
This appropriation increased by $391,000 to $2.941 million due to a carry forward from 2015/16.

National Land Transport Programme PLA, and National Land Transport Programme – new infrastructure for and renewal of State highways PLA

The NZ Transport Agency is responsible for the National Land Transport Programme, which delivers
the Government objectives laid out in the Government Policy Statement on land transport. Road tax revenue is allocated to the NLTF by legislation and is appropriated in these two appropriations – one operating and one capital.

There are three main reasons for the changes in these appropriations:

  • Funding is transferred between the operating appropriation and the capital one, to match funding for the former to planned activity in a year.
  • Road tax revenue is forecast two to three time a year. The State highway capital appropriation is adjusted as required as revenue increases or decreases.
  • Unspent funding from previous years may be appropriated.

Any shortfall in funding to be covered by the loan facilities is reflected in the capital appropriation. This is
for simplicity and is consistent with prior years.

The decrease in the operating appropriation is to align it with planned expenditure. The decrease is matched by an increase to the capital appropriation to cover planned expenditure.

The increase in the capital appropriation of $393.312 million is due to:

  • $210.424 million for the balance in the National Land Transport Fund at 1 July 2016 (increase)
  • $129.014 million from changes in the road tax revenue forecasts (increase)
  • $68.174 million transferred from the operating appropriation as above (increase)
  • $14.300 million appropriated to other outputs within Vote Transport that are funded from road tax revenue (decrease).

Policy advice and related outputs – maritime MCA

The appropriation decreased by $0.072 million due to the decrease in the capital charge rate.

Search and rescue and recreational boating safety activities PLA

This appropriation increased by $0.358 million due to:

  • $0.429 million was an expense transfer from 2015/16 (increase)
  • $0.071 million due to a reduction in the capital charge rate (decrease).

Bad debt provision – motor vehicle registration/licences and road user charges
The appropriation increased by $4 million due to NZ
Transport Agency processing higher than usual writeoffs.

SuperGold Card – public transport concessions for cardholders
This appropriation increased by $0.191 million due to Cabinet agreement following an increase in the
Consumer Price Index.

Tauranga maritime incident response
The appropriation increased by $0.106 million due to an expense transfer from 2015/16.

Urban cycleways – local routes
This appropriation decreased by $16.630 million due to:

  • $3.543 million was an expense transfer from 2015/16 (increase)
  • $20.173 million was re-phased to outyears to match planned expenditure.

Auckland Transport Package loan

This appropriation increased by $12.200 million as a net result of re-phasing the loan profile over years.

Aviation Security Service
This appropriation decreased by $1.800 million due to funds not required being reprioritised elsewhere within the Vote to meet forecast costs.

Joint venture airports – Crown contribution
This appropriation increased by $0.541 million due to a transfer of funds from the Joint venture multi-year
appropriation, which expired in 2015/16.

Maritime New Zealand
This appropriation increased by $1.600 million due to an expense transfer from 2015/16.

Rail – KiwiRail equity injection
This appropriation increased by $19.000 million to meet forecast expenditure.

Rail – Wellington metro rail network upgrade
This appropriation increased by $2.445 million due to:

  • $3.745 million was an expense transfer from 2015/16 (increase)
  • $1.300 million was re-phased to outyears to match planned expenditure.

Regional state highways and regional state highways MYA

The balance of the MYA was transferred into the other appropriation, as the MYA expired at 30 June 2017.
The combined change for the two appropriations was a decrease of $4.573 million, due to:

  • $12.690 million was an expense transfer from 2015/16 (increase)
  • $17.263 million was re-phased to outyears to match planned expenditure (decrease).

Reinstatement of South Island State Highway 1
This appropriation was established during the year for the reinstatement of State Highway 1 between
Picton and Christchurch following the November 2016 earthquake.

Roading – reinstatement of earthquake damaged roads in Christchurch – loan

This appropriation decreased by $39.000 million due to:

  • $42.420 million was an expense transfer from 2015/16 (increase)
  • $81.420 million was a reduction to the appropriation because that portion of the loan facility was not needed (decrease).

Urban cycleways – crown assets

This appropriation reduced by $3.600 million due to due to a carry forward to 2017/18 to align with forecast expenditure.

NOTE 14: MAJOR BUDGET TO ACTUAL VARIANCES

The significant variances between actual results and the Supplementary Estimates forecasts were:

Schedule of non-departmental revenue and receipts

Total revenue and receipts were $20 million higher than forecast, mainly in indirect taxation. These revenues are demand driven and so difficult to forecast.

Schedule of non-departmental expenses
Total expenses were $339 million lower than forecast. The National Land Transport Fund spent less than
forecast.

Schedule of non-departmental assets
Non-departmental assets were $62 million higher than forecast. This is mainly because payables were higher than forecast (see liabilities explanation following), which meant there was more cash in the bank than forecast.

Schedule of non-departmental liabilities
Payables were $38 million higher than forecast. Some payments were made later than forecast, resulting in a higher payables amount and also a higher bank balance (see assets explanation above).

NOTE 15: CITY RAIL LINK

On 30 June 2017, the Government signed a Sponsors Agreement with the Auckland Council to equally cofund the development of the Auckland City Rail Link (an underground rail line between the city centre and the existing western line). A new company (City Rail Link Limited) has been set up to deliver the project which is estimated to cost $3.6 billion. As joint sponsor, the Government has committed up to $1.7 billion (net of revenue from property sales) future funding for the project.

City Rail Link Limited (CRL), a jointly controlled Crown entity, has been incorporated and will assume the
responsibility for the design and construction of the CRL from 1 July 2017 pursuant to the Project Delivery
Agreement.

Subsequent to balance date CRL obtained the necessary authority to assume responsibility and the Crown’s contractual commitments came into effect.

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