Column definitions 

The source of the financial information contained in each column of the tables that follow is:

2017 Actual       as published in the Ministry’s Annual Report for the year ended 30 June 2017.

2018 Actual       the audited actual figures for the current financial year.

2018 Budget     as published in the Ministry’s Budget Estimates Fiscal Update (BEFU) for
the 2018 year and the Annual Report for the year ended 30 June 2017.
This information is unaudited.

2018 Forecast   as published in the Ministry’s Supplementary Estimates for the 2018 year.
This information is unaudited.

2019 Forecast   as published in the Ministry’s BEFU for the 2018 year. This information
is unaudited.

 

 

STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE 

FOR THE YEAR ENDED 30 JUNE 2018

The Statement of Comprehensive Revenue and Expense details the revenue and expenses relating to all outputs produced by the Ministry during the financial year. 

2017
Actual $000

 

Note

2018
Actual $000

2018
Budget $000

2018
Forecast $000

2019
Forecast $000

 

Revenue

         

34,174

Revenue Crown

2

37,348

36,511

 37,348

38,477

459

Other revenue

3

531

350

1,567

445

34,633

Total revenue

 

37,879

36,861

38,915

38,922

 

Expenses

         

18,294

Personnel expenses

4

18,792

18,715

19,781

20,653

11,694

Other operating expenses

5

12,773

13,920

14,756

13,592

4,145

Contractual payments to Crown entities

6

3,819

3,821

3,821

3,797

207

Capital charge

7

169

169

189

169

170

Depreciation – property, plant and equipment

10

52

214

198

196

26

Amortisation – intangible assets

10

16

22

170

515

34,536

Total expenses

 

35,621

36,861

38,915

38,922

97

Net surplus

14

2,258

-

-

-

 

Other comprehensive revenue and expenditure

         

-

Gain on revaluation

 

-

-

-

-

-

Loss on disposal

 

-

-

-

-

97

Total comprehensive revenue and expense

 

2,258

-

-

-


Explanations of major variances against the 2018 budget are provided in Note 18.
The accompanying notes form part of these financial statements.

 

 

STATEMENT OF MOVEMENTS IN EQUITY

FOR THE YEAR ENDED 30 JUNE 2018

2017
Actual $000

 

Note

2018
Actual $000

2018
Budget $000

2018
Forecast $000

2019
Forecast $000

3,185

Balance at 1 July

 

2,810

2,810

2,810

2,810

97

Total comprehensive revenue and expense

 

2,258

-

-

-

(375)

Release of retained surplus

 

-

-

-

-

-

Gain on revaluation

 

-

-

-

-

-

Loss on disposal

 

-

-

-

-

 

Owner transactions

         

(97)

Provision to repay surplus

 

(2,258)

-

-

-

2,810

Balance at 30 June

8

2,810

2,810

2,810

2,810


Explanations of major variances against the 2018 budget are provided in Note 18.
The accompanying notes form part of these financial statements.

 


 

STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2018

The Statement of Financial Position reports the total assets and liabilities of the Ministry as at 30 June 2018. Equity is represented by the difference between the assets and liabilities.

 

2017
Actual $000

 

Note

2018
Actual $000

2018
Budget $000

2018
Forecast $000

2019
Forecast $000

 

Equity

         

1,947

Taxpayers’ funds

 

1,947

1,947

1,947

1,947

863

Revaluation reserve – aerodrome

 

863

863

863

863

2,810

Total equity

8

2,810

2,810

2,810

2,810

 

Represented by:

         
 

Current assets

         

3,866

Cash and cash equivalents

 

4,311

1,614

1,496

102

3,998

Debtors, prepayments and other receivables

9

4,737

3,928

4,056

4,056

7,864

Total current assets

 

9,048

5,542

5,552

4,158

 

Non-current assets

         

1,432

Property, plant and equipment

10

1,380

2,025

1,309

1,418

26

Intangible assets

10

10

179

1,302

2,587

1,458

Total non-current assets

 

1,390

2,204

2,611

4,005

9,322

Total assets

 

10,438

7,746

8,163

8,163

 

Current liabilities

         

2,672

Creditors and other payables

11

2,904

2,578

3,085

3,085

1,252

Employee entitlements

12

1,328

1,304

1,178

1,178

1,500

Provisions

13

115

-

-

-

-

Provision to repay surplus

 

2,258

-

-

-

5,424

Total current liabilities

 

6,605

3,882

4,263

4,263

 

Non-current liabilities

         

1,088

Employee entitlements

12

1,023

1,054

1,090

1,090

1,088

Total non-current liabilities

 

1,023

1,054

1,090

1,090

6,512

Total liabilities

 

7,628

4,936

5,353

5,353

2,810

Net assets

 

2,810

2,810

2,810

2,810


Explanations of major variances against the 2018 budget are provided in Note 18.
The accompanying notes form part of these financial statements.

 

 

STATEMENT OF CASH FLOWS 

FOR THE YEAR ENDED 30 JUNE 2018

The Statement of Cash Flows summarises the cash movements in and out of the Ministry during the financial year. 

2017
Actual $000

 

Note

2018
Actual $000

2018
Budget $000

2018
Forecast $000

2019
Forecast $000

 

Cash flows from operating activities

         

33,671

Crown revenue

 

37,585

36,511

37,348 

38,477

-

Departments

 

-

-

16

-

111

Crown entities

 

180

120

120

120

348

Other revenue

 

308

230

1,469

325

(16,668)

Personnel costs

 

(20,150)

(18,715)

(19,781)

(20,653)

(11,927)

Operating expenses

 

(12,790)

(13,920)

(15,315)

(13,592)

(4,145)

Contractual payments to Crown entities

 

(3,819)

(3,821)

(3,821)

(3,797)

174

Net GST paid

 

(603)

-

(599)

-

(207)

Capital charge

 

(169)

(169)

(189)

(169)

1,357

Net cash flows from operating activities

14

542

236

(752)

711

 

Cash flows from investing activities

         

(425)

Purchase of property, plant and equipment

 

-

(360)

(76)

(305)

(17)

Purchase of intangible assets

 

-

(95)

(1,446)

(1,800)

(442)

Net cash flows from investing activities

 

-

(455)

(1,522)

(2,105)

 

Cash flows from financing activities

         

-

Repayment of surplus

 

(97)

-

(97)

-

-

Net cash flows from financing activities

 

(97)

-

(97)

-

915

Net increase/(decrease) in cash held

 

445

(219)

(2,371)

(1,394)

2,951

Cash at 1 July

 

3,866

1,833

3,867

1,496

3,866

Total cash at 30 June

 

4,311

1,614

1,496

102

 

Explanations of major variances against the 2018 budget are provided in Note 18.
The accompanying notes form part of these financial statements.

 

 

STATEMENT OF COMMITMENTS

AS AT 30 JUNE 2018

Non-cancellable operating lease commitments

The Ministry leases property in the normal course of business. 

In Wellington, the Ministry rents space from Statistics NZ in Westpac House. There is no formal agreement and Statistics NZ is the lessee. Therefore, the Ministry has no legal commitment.
The Ministry also rents an additional floor in Westpac House with a lease until 30 November 2018. This commitment is disclosed below.

In Auckland, the Ministry has purchased membership in the Auckland Policy Office. There was
a Memorandum of Understanding for this arrangement with the State Services Commission which expired on 30 June 2018. Therefore, the Ministry has no current commitment.

2017
Actual
$000

 

2018
Actual
$000

 

Non-cancellable operating lease commitments

 

95

Not later than 1 year

38

-

Later than 1 year and not later than 5 years

-

-

Later than 5 years

-

95

Total non-cancellable operating lease commitments

38


There are no restrictions placed on the Ministry by its leasing arrangements. The amount disclosed is based on the projected rental rate. Total operating lease cost is expensed on a straight-line basis over the life of the lease.

Capital commitments

The Ministry has no capital commitments as at 30 June 2018 (2017: nil).

STATEMENT OF CONTINGENT ASSETS

AS AT 30 JUNE 2018

The Ministry has a contingent asset relating to earthquake-related response and recovery costs incurred by the Ministry as at 30 June 2018. The Ministry is yet to receive confirmation from its insurers on its claim for these costs and therefore the amount that may be recovered is not known.

2017
Actual
$000

 

2018
Actual
$000

350

Earthquake-related response and recovery costs

847


The accompanying notes form part of these financial statements.

 

 

 

Notes to the departmental financial statements and non-departmental schedules 

FOR THE YEAR ENDED 30 JUNE 2018

Note 1: Statement of accounting policies

Reporting entity

The Ministry of Transport (the Ministry) is a government department as defined by section 2 of the Public Finance Act 1989 and is domiciled and operates in New Zealand. The Ministry’s ultimate parent is the New Zealand Crown.

The Ministry reports on the departmental financial statements and separately on the non-departmental schedules, which present financial information on public funds managed by
the Ministry on behalf of the Crown. 

The primary objective of the Ministry is to provide policy services to the Government rather than making a financial return. Accordingly, the Ministry has designated itself as a public benefit entity for the purposes of complying with generally accepted accounting practices.

The departmental financial statements and the financial information reported in the non-departmental schedules are consolidated into the Financial Statements of the Government and therefore readers of these schedules should also refer to the Financial Statements of the Government for the year ended 30 June 2018. 

The financial statements of the Ministry are for the year ended 30 June 2018. These financial statements were authorised for issue by the Chief Executive on 28 September 2018. 

Basis of preparation

The financial statements have been prepared on a going concern basis and the accounting policies have been applied consistently throughout the period.

Statement of compliance

The financial statements and unaudited forecast financial statements of the Ministry have been prepared in accordance with the requirements of the Public Finance Act 1989, which includes the requirement to comply with New Zealand Generally Accepted Accounting Practices (NZ GAAP), Treasury Instructions and Treasury Circulars. Measurement and recognition rules applied in the preparation of the non-departmental schedules are consistent with NZ GAAP and Crown accounting policies and are detailed in the Financial Statements of the Government. These Financial Statements have been prepared in accordance with Tier 1 NZ PBE accounting standards.

Measurement base

The financial statements have been prepared on a historical cost basis modified by the revaluation of specified assets. 

Functional and Presentation currency

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand dollars ($000).

 

Standards issued that are not yet effective and have not been early adopted

Standards and amendments issued but not yet effective that have not been early adopted, and which are relevant to the Ministry are:

Financial instruments

In January 2017, the External Reporting Board issued PBE IFRS 9 Financial Instruments. This replaces PBE IPSAS 29 Financial Instruments: Recognition and Measurement. PBE IFRS 9 is effective for annual periods beginning on or after 1 January 2021, with earlier application permitted. The main changes under the standard are:

  • New financial asset classification requirements for determining whether an asset is measured at fair value or amortised cost.
  • A new impairment model for financial assets based on expected losses, which may result in the earlier recognition of impairment losses.

The Crown and the Ministry will adopt PBE IFRS 9 in 2018/19. The Ministry has not yet assessed the effects of the new standard.

Changes in accounting policies

There have been no changes in accounting policies during the financial year.

Significant accounting policies

Revenue Crown – Non-exchange

Revenue from the Crown is measured based on the Ministry’s funding entitlement for the reporting period. The funding entitlement is established by Parliament when it passes the Appropriation Acts for the financial year. The amount of revenue recognised takes into account any amendments to appropriations approved in the Appropriation (Supplementary Estimates) Act for the year and certain other unconditional funding adjustments formally approved prior to balance date. 

There are no conditions attached to the funding from the Crown. However, the Ministry can incur expenses only within the scope and limits of its appropriations. 

The fair value of Revenue Crown has been determined to be equivalent to the funding entitlement.

Revenue Other – Exchange

Other revenue is recognised when earned and is reported in the financial period to which it relates. Revenue is measured at the fair value of the consideration received or receivable.

Equity

Equity is the Crown’s investment in the Ministry and is measured as the difference between total assets and total liabilities. 

Cash and cash equivalents

Cash and cash equivalents includes cash on hand and deposits on call with banks.

Income tax

The Ministry is a public authority and so is exempt from the payment of income tax. Accordingly, no charge for income tax has been provided

 

 

Goods and Services Tax (GST) 

All items in the financial statements, including appropriation statements, are stated exclusive of GST, except for receivables and payables, which are stated on a GST inclusive basis. Where GST is not recoverable as input tax, it is recognised as part of the related asset or expense.

The net amount of GST recoverable from, or payable to, the Inland Revenue Department is included as part of receivables or payables in the Statement of Financial Position.

The net GST paid to, or received from, the Inland Revenue Department, including the GST relating to investing and financing activities, is classified as an operating cash flow in the Statement of Cash Flows.

Commitments and contingencies are disclosed exclusive of GST.

Statement of cost allocation policies 

The Ministry has determined the cost of outputs using the following cost allocation system. 

Direct costs are expenses incurred from activities specifically attributable to producing an output. These costs are charged directly to the relevant output classes.

Indirect costs are those costs that cannot be identified with a specific output. Indirect costs are allocated to each output through a two-stage process. The costs are assigned to cost centres within the Ministry, and then the costs are allocated to outputs based on a proportion of staff time attributable to the outputs of that cost centre.

There have been no changes in general cost accounting policies since the date of the last audited financial statements. 

Forecast figures

Basis of preparation 

The forecast figures, representing the Forecast Financial Statements, are those published in the BEFU for the year ended 30 June 2019, and are prepared in accordance with PBE FRS 42.

The figures have been prepared in accordance with:

  • the accounting policies expected to be used in the future for reporting historical general purpose financial statements
  • NZ PBE IPSAS
  • the BEFU for the year ended 30 June 2018, incorporating assumptions as to future events that the Ministry reasonably expects to occur, and associated with the actions it reasonably expects to take
  • existing government policies and ministerial expectations at the date that the information was prepared.

The main assumptions were as follows: 

  • The Ministry’s activities and output expectations will remain substantially the same as the previous year focusing on government priorities.
  • Personnel costs were based on fully budgeted established positions including a 2% increase based on current salary, as well as an adjustment for a planned increase in the establishment of 12 full-time equivalent employees, and an increase for graduate progression.
  • Operating costs were based on historical experience and other factors that are believed to be reasonable in the circumstances and are the Ministry’s best estimate of future costs that will be incurred. 

The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances. Actual financial results achieved for the period covered are likely to vary from the information presented, and the variations may be material. 

Authorisation statement 

The Forecast Financial Statements were authorised for issue by the Chief Executive of the Ministry on 17 April 2018. The Chief Executive is responsible for the Forecast Financial Statements presented, including the appropriateness of the underlying assumptions and all other required disclosure. 

Critical accounting estimates and assumptions

There are no critical accounting estimates and assumptions made in preparing these Financial Statements.

 

 

Note 2: Revenue Crown

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

31,870

Policy advice and related outputs MCA

34,220

35,448

1,201

Search and rescue activity coordination PLA

 2,425

2,350

1,103

Fuel excise duty refund administration 

 703

679

34,174

Total revenue Crown 

37,348

38,477

 

Note 3: Other revenue

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

111

Crown entities and other departments

180

120

329

Milford Aerodrome landing fees

351

325

19

Other recoveries

-

-

459

Total other revenue

531

445

 

Note 4: Personnel expenses

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

17,469

Salary and wages

17,587

19,163

535

Employer contributions to defined contribution schemes

575

530

256

Other personnel costs

442

780

 

Changes to provisions

   

168

Annual leave

237

41

(9)

Long service leave

5

20

(122)

Retirement leave

(64)

119

(3)

Sick leave

10

-

18,294

Total personnel expenses

18,792

20,653


Employer contributions to defined contribution plans include contributions to State Sector Retirement Savings Scheme, KiwiSaver,
and the Government Superannuation Fund.

 

 

Note 5: Other operating expenses

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

5,861

Consultant, research and legal expenses

5,007

8,271

2,620

Other operating expenses

3,238

1,279

1,864

Information technology expenses

3,302

2,508

781

Operating lease payments

916

1,180

278

Advertising and publicity

222

268

85

Audit NZ – the financial statement audit

88

86

250

Impairment of assets

-

-

-

Loss on disposal of assets

-

-

11,739

Total other operating expenses

12,773

13,592


Since the November 2016 Kaikōura earthquake a number of Ministry assets were trapped at 1 The Boulevard. These assets were impaired in 2016/17 as it appeared they may not be recovered. In 2017/18 these assets were subsequently written off.

 

Note 6: Contractual payments to Crown entities

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

NZ Transport Agency:

   

903

For rules programme activity

865

899

1,145

For fuel excise duty refund activity

819

799

 

Civil Aviation Authority: 

   

1,194

For rules programme activity

1,096

1,200

 

Maritime New Zealand:

   

906

For rules programme activity

1,039

899

4,145

Total contractual payments to Crown entities

3,819

3,797

 

 

 

Note 7: Capital charge

The Ministry pays a capital charge to the Crown based on its taxpayers’ funds as at 30 June and 31 December each year for the previous 6 months. The capital charge rate for the year ended 30 June 2018 was 6 percent for both payments (2016/17: 7 percent for 31 December payment and 6 percent for 30 June payment).

Note 8: Equity

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

Taxpayers’ funds

   

2,322

Balance at 1 July

1,947

1,947

97

Net surplus/(deficit)

2,258

-

(375)

Release of retained surplus

-

-

(97)

Provision to repay surplus

(2,258)

-

1,947

Balance 30 June

1,947

1,947

 

Property revaluation reserve 

   

863

Balance at 1 July

863

863

-

Revaluation

-

-

-

Loss on transfer of assets

-

-

863

Balance at 30 June

863

863

2,810

Total equity

2,810

2,810

 

Note 9: Debtors, prepayments and other receivables

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

Non-exchange

   

3,912

Due from the Crown

3,770

4,008

-

GST receivable

174

-

 

Exchange

   

86

Other receivables

793

48

3,998

Total debtors, prepayments and other receivables

4,737

4,056


The carrying value of debtors, prepayments and other receivables approximates their fair value. Other receivables greater than 30 days in age are considered to be past due. Receivables of $3,520 were past due at 30 June 2018 (2016/17: $2,695). The Ministry has assessed that a provision for doubtful debt is required in 2017/18 of $652 (2016/17: $nil). This is included in the other receivables amount shown above.

 

 

Note 10: Property, plant and equipment and intangibles

 

Leasehold improvements $000

Plant and equipment $000

Milford Sound/ Piopiotahi Aerodrome $000

Furniture and fittings $000

Intangible assets
$000

Total $000

Cost or valuation

           

Balance at 1 July 2016

2,170

1,270

1,417

836

1,548

7,241

Additions

-

421

4

-

17

442

Disposals

(2,170)

(979)

-

(836)

(37)

(4,022)

Balance at 30 June 2017

-

712

1,421

-

1,528

3,661

Balance at 1 July 2017

-

712

1,421

-

1,528

3,661

Additions

-

-

-

-

-

-

Disposals

-

(399)

-

-

(342)

(741)

Balance at 30 June 2018

-

313

1,421

-

1,186

2,920

Accumulated depreciation

           

Balance at 1 July 2016

2,150

1,249

37

830

1,513

5,779

Depreciation/amortisation  

20

112

32

6

26

196

Impairment

-

250

-

-

-

250

Disposals

(2,170)

(979)

-

(836)

(37)

(4,022)

Balance at 30 June 2017

-

632

69

-

1,502

2,203

Balance at 1 July 2017

-

632

69

-

1,502

2,203

Depreciation/amortisation  

-

21

31

-

16

68

Impairment

-

-

-

-

-

-

Disposals

-

(399)

-

-

(342)

(741)

Balance at 30 June 2018

-

254

 100

-

1,176

1,530

Carrying amounts

           

At 1 July 2016

20

21

1,380

6

35

1,462

At 30 June and 1 July 2017

-

80

1,352

-

26

1,458

At 30 June 2018

-

59

1,321

-

10

1,390

Unaudited forecast at
30 June 2019

-

127

1,291

-

2,587

4,005

Additions

The cost of an item of property, plant and equipment is recognised as an asset only when it is probable that future economic benefits or service potential associated with the item will flow to the Ministry and the cost of the item can be measured reliably.

Work in progress is recognised at cost less impairment and is not depreciated.

In most instances, an item of property, plant and equipment is initially recognised at its cost. Where an asset is acquired through a non-exchange transaction, it is recognised at its fair value as at the date of acquisition.

Disposals

Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount of the asset. Gains and losses on disposals are included in the surplus or deficit. When a revalued asset is sold, the amount included in the property revaluation reserve in respect of the disposed asset is transferred to taxpayers’ funds.

Depreciation/amortisation

Depreciation/amortisation is provided on a straight-line basis on all property, plant,
and equipment and intangible assets.

Asset class

Useful life

Depreciation rate

Furniture and fittings

10 years or to lease expiry date

10% per annum

Leasehold improvements

To lease expiry date

9.65 % per annum

Milford Sound/Piopiotahi Aerodrome

3-100 years

1-33.3% per annum

Plant and equipment

2-10 years or to lease expiry date

10-50% per annum 

Software

3-5 years

20-33.3% per annum


The Ministry relocated in August 2016. At that time, many of its assets in three classes were not suitable for the new property and therefore were disposed of.

The Ministry has updated its threshold for fixed asset recognition to $5,000 per item in line with Treasury guidance. This threshold applied from 1 July 2017.

Milford Sound/Piopiotahi Aerodrome (the aerodrome) is revalued on a five yearly cycle. The aerodrome was valued at 31 March 2015 by an independent valuer, M Gordon (BE Hons, MBA, CPEng, MIPENZ) of AECOM (NZ) Limited. The valuation was based on the aerodrome’s optimised depreciated replacement cost. Impairment of the valuation is reassessed annually. 

The only intangible asset is purchased software. There are no restrictions over the title of the Ministry’s intangible assets, nor are any intangible assets pledged as security for liabilities.

There was no work in progress asset at 30 June 2018 (30 June 2017: $nil).

Note 11: Creditors and other payables

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

Exchange

   

1,739

Accrued expenses

1,580

1,800

503

Trade creditors 

1,324

1,285

 

Non-exchange

   

430

GST payable

-

-

2,672

Total creditors and other payables

2,904

3,085

 

 

 

Note 12: Employee entitlements

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

Current liabilities

   

74

Accrued salary

142

210

955

Annual leave

948

718

88

Long service leave

104

92

122

Retirement leave

111

135

13

Sick leave

23

23

1,252

Total of current portion

1,328

1,178

 

Non-current liabilities

   

145

Long service leave

134

166

943

Retirement leave

889

924

1,088

Total of non-current portion

1,023

1,090

2,340

Total employee entitlements

2,351

2,268


The present value of the retirement and long service leave obligations depends on a number of factors. Two key factors are the discount rate and the salary-inflation factor. Any changes in these assumptions will change the carrying amount of the liability. 

Note 13: Provisions

 

Lease
make-good
$000

Holidays Act
compliance
$000

Restructure
$000

Total
$000

Balance at 1 July 2016

500

-

-

500

Transfer to the Ministry of Social Development

(455)

-

-

(455)

New provision

-

-

1,500

1,500

Release of unused provision

(45)

-

-

(45)

Balance at 30 June 2017

-

-

1,500

1,500

Balance at 1 July 2017

-

-

1,500

1,500

New provision

-

115

-

115

Provision used

-

-

(1,500)

(1,500)

Balance at 30 June 2018

-

115

-

115

Current liabilities

-

115

-

115

Non-current liabilities

-

-

-

-


At the expiry of the lease term for its leased premises, the Ministry was required to make good any damage caused to the premises and to remove any fixtures or fittings installed by the Ministry.

The results of an organisational review were announced in June 2017. As a result, a restructuring provision for additional personnel costs was included in 2016/17. All costs relating to this organisational review have been incurred in 2017/18 and the full provision consumed.

The Ministry’s current payroll system is non-compliant with the Holidays Act 2003. The Ministry was working with an external consultant at 30 June 2018 to find a solution to ensure compliance with the Act. A provision has been created based on the current estimate of the Ministry’s liability to remediate any payroll underpayments due to non-compliance with the Act.

 

 

 

Note 14: Reconciliation of the net surplus in the Statement of Comprehensive Revenue and Expense with net cash flows from operating activities in the Statement of Cash Flows

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

97

Net surplus

2,258

-

 

Add non-cash items

   

170

Depreciation of property, plant and equipment

52

196

26

Amortisation of intangible assets

16

515

250

Impairment of assets

-

-

446

Total of non-cash items

68

711

 

Add/(deduct) movements in working capital items

   

(507)

(Increase)/decrease in debtors and other receivables

(642)

-

1,377

Increase/(decrease) in payables and provisions

(1,153)

-

(56)

Increase/(decrease) in employee entitlements

11

-

814

Net movements in working capital items

(1,784)

-

1,357 

Net cash flows from operating activities 

542

711

 

Note 15: Categories of financial instruments

2017
Actual
$000

 

2018
Actual
$000

2019
Forecast
$000

 

Loans and receivables

   

3,866

Cash and cash equivalents

4,311

102

3,998

Debtors, prepayments and other receivables (note 9)

4,737

4,056

 

Financial liabilities measured at amortised cost

   

 2,672

Creditors and other payables (note 11)

2,904

3,085

 

Note 16: Related party information

The Ministry has not made related party disclosures for transactions with related parties within a normal supplier or client/recipient relationship, on terms and conditions no more or less favourable than those it is reasonable to expect the Ministry would have adopted, in dealing with the party at arm’s length in the same circumstances. In addition, the Ministry has not disclosed as related transactions any transactions with other government agencies (e.g., departments and Crown entities), when the transactions are consistent with the normal operating arrangements between government agencies and undertaken on normal terms and conditions.

The Ministry received revenue from other entities controlled by the Crown to reimburse it for costs – detailed in note 3.

The Ministry also purchases transport outputs from other transport entities controlled by the Crown – detailed in note 6.

Transactions with key management personnel

The Ministry did not enter into any transactions with key management personnel or their close families in 2017/18 (2016/17: nil). 

 

 

Key management personnel compensation

2017
Actual
$000

 

2018
Actual
$000

1,656

Salaries and other short-term employee benefits

2,107

-

Termination benefits

522

1,656

Total key management personnel compensation

2,629


At 30 June 2018, key management personnel comprise 7 FTE (2016/17: 6), including the Chief Executive and the members of the senior leadership team.

In 2017/18, termination benefits were paid to 3 key management personnel (2016/17: 0) as a result of the organisational review announced in June 2017.

Note 17: Major changes to the departmental output budgets for 2017/18

Changes were made to the Ministry’s departmental output budgets by way of the Supplementary
Estimates for 2017/18. Explanations for the changes were outlined in that document and the net
changes are shown below.

Appropriations for departmental output expenses

2018
Budget
$000

2018
Forecast
$000

Cumulative
Vote $000

Policy advice and related outputs MCA

33,233

2,049

35,282

Fuel excise duty refund administration

823

-

823

Milford Sound/Piopiotahi Aerodrome operation and administration

230

155

385

Search and rescue activity coordination PLA

2,575

(150)

2,425

Total departmental appropriations

36,861

2,054

38,915

 

The adjustments to the appropriations were:

  • $1.062 million increase in revenue and associated costs in the Policy advice and related outputs MCA relating to the November 2016 Kaikōura earthquake insurance claim and other revenue from third parties
  • $0.850 million transfer from the Ministry of Business, Innovation and Employment to the Policy advice and related outputs MCA for an Upper North Island Supply Chain Strategy working group
  • $0.337 million carry forward from 2016/17 in the Policy advice and related outputs MCA due to operating costs relating to the replacement of a document management system being deferred due to the November 2016 Kaikōura earthquake
  • $0.150 million decrease in the Policy advice and related outputs MCA due to a reprioritisation within Vote Transport
  • $0.050 million transfer to the Department of Internal Affairs from the Policy advice and related outputs MCA for cross-agency funding of a Service Innovation Work Programme
  • an expense transfer of $0.150 million within the Search and rescue activity coordination PLA to 2018/19 to align with forecast expenditure on a new IT system for a multi-agency data store
  • additional revenue and associated costs of $0.155 million for Milford Sound/Piopiotahi Aerodrome operation and administration from landing fees.

 

Note 18: Explanation of major variances between actual and forecast
2018 figures

The significant variances between the actual results and the figures included in the Supplementary Estimates of Appropriations for the year ended 30 June 2018 are:

STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE

Revenue
Other revenue
Other revenue was $1.036 million below forecast. This was mainly due to expected insurance proceeds relating to the November 2016 Kaikōura earthquake not yet being received. This is expected to be resolved in 2018/19.

Expenses
Total expenditure was $3.294 million below Supplementary Estimates. The main variances are in personnel expenses due to a higher level of vacancies than forecast, and in external expert advice due to delays in projects caused by external factors. Depreciation and amortisation are below forecast due to a change in accounting treatment of assets during the year and also a change in expected accounting treatment of a software project.

STATEMENT OF FINANCIAL POSITION

Assets
Cash and cash equivalents
The actual was $2.815 million more than the Supplementary Estimates. This was mainly because less was spent on property, plant and equipment and intangible assets than forecast. The Ministry also drew down on its Crown debtor account, which was not included in the forecast.

Debtors, prepayments and other receivables under exchange transactions
The actual was $0.681 million more than the Supplementary Estimates. This is mainly due to higher than expected Crown revenue accrual at year end.

Intangible assets
The actual was $1.292 million less than the Supplementary Estimates as a change of the expected accounting treatment for a software project was made after the Supplementary Estimates were confirmed.

Liabilities
Provisions
The actual of $0.115 million relates to a provision for compliance with the Holidays Act which had not been reflected in the forecast.

Note 19: Explanations of major variances between actual 2018 and forecast 2019 figures

The significant variances between the actual results and the forecast 2018/19 figures are as below.

STATEMENT OF COMPREHENSIVE REVENUE AND EXPENSE

Revenue
Revenue Crown
The 2018/19 forecast is $1.129 million more than the 2017/18 actual. This is due to an increase in the Policy advice and related outputs MCA for 2018/19 relating to funding for additional capability, approved by Cabinet in Budget 2017.

Other revenue
The 2018/19 forecast is $0.085 million less than the 2017/18 actual. This reduction is mainly in relation to Milford Sound Aerodrome revenue from landing fees. Actual revenue in 2018/19 is however now expected to be similar to 2017/18, and will be increased at the next forecast opportunity. 

Expenses

The 2018/19 forecast is $3.301 million more than the 2017/18 actual. $1.861 million relates to personnel expenses as the 2018/19 budget is based on a fully staffed establishment. The increase in depreciation and amortisation is higher than the 2017/18 actual expense as the forecast has not yet been amended to reflect the change in accounting treatment of assets.

 

STATEMENT OF FINANCIAL POSITION

Assets
Cash and cash equivalents
The actual was $4.209 million more than the 2018/19 forecast. This was mainly because less was spent on property, plant and equipment and intangible assets than forecast. The Ministry also drew down on its Crown debtor account, which was not included in the forecast.

Debtors, prepayments and other receivables under exchange transactions
The actual was $0.681 more than the 2018/19 forecast. This is mainly due to higher than expected Crown revenue accrual at year end.

Intangible assets
The actual was $2.577 million less than the 2018/19 forecast as a change in the expected accounting treatment for a software project was made after the forecast was confirmed.

Liabilities
Provisions
The actual was $0.115 million more than the 2018/19 forecast as this relates to a provision for compliance with the Holidays Act. This provision is expected to be fully consumed in 2018/19.

Note 20: Events after balance sheet date

No event has occurred since the end of the financial period (not otherwise dealt with in the Financial Statements) that has affected, or may significantly affect, the Ministry’s operations or state of affairs for the year ended 30 June 2018.

 

 

Non-departmental schedules
and statements

SCHEDULE OF NON-DEPARTMENTAL REVENUE AND RECEIPTS

FOR THE YEAR ENDED 30 JUNE 2018

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

2017
Actual
$000

 

Note

2018 Actual $000

2018 Budget $000

2018 Forecast $000

1,636,154

Indirect taxation

2

 1,713,382 

 1,614,793 

 1,682,545 

189

Other ‘sovereign power’ revenue

3

 208

1,300 

 1,300 

10,362

Other operational revenue

4

 10,895

8,760 

 8,760 

(1,605)

Share of net asset increase/(decrease) in joint ventures

 

(3,992)

 - 

 - 

1,645,100

Total non-departmental revenue and receipts

 

 1,720,493 

 1,624,853 

 1,692,605 

 

SCHEDULE OF NON-DEPARTMENTAL EXPENSES

FOR THE YEAR ENDED 30 JUNE 2018

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

2017
Actual
$000

 

Note

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

2,008,097

Non-departmental output classes

5

 2,339,472 

 2,124,559 

 2,220,567 

52,819

Other expenses to be incurred by the Crown

6

80,327

 83,376 

 73,316 

12,533

Non-departmental multi-category appropriation expenses

 

 90,990 

 7,970 

 98,349 

6,013

Bad debts expense

 

 4,965 

 4,000 

 6,000 

590

Movement in doubtful debts provision

 

 1,948 

 - 

 - 

2,080,052

Total non-departmental expenses

 

2,517,702

2,219,905

2,398,232


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 2018. The accompanying notes form part of these statements.

 

 

SCHEDULE OF NON-DEPARTMENTAL ASSETS

AS AT 30 JUNE 2018

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

2017
Actual
$000 

 

Note

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

 

Current assets

       

77,937

Cash and cash equivalents

 

 18,363 

 20,000 

 20,000 

46,341

Receivables and advances

7

 46,999 

 39,090 

 46,340 

 

Non-current assets

 

 

 

 

15,020

Investment in joint ventures

8

320,015

 18,079 

 341,520 

139,298

Total non-departmental assets

 

385,377

 77,169 

 407,860 


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.

SCHEDULE OF NON-DEPARTMENTAL LIABILITIES

AS AT 30 JUNE 2018

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

2017
Actual
$000 

 

Note

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

 

Current liabilities

       

472,534

Payables

10

499,668

434,979 

437,838

472,534

Total non-departmental liabilities

 

499,668

434,979 

437,838


The accompanying notes form part of these statements.

 

 

STATEMENT OF NON-DEPARTMENTAL COMMITMENTS

AS AT 30 JUNE 2018

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.

2017
Actual
$000 

 

2018
Actual
$000

 

Operating commitments

 

95,284

Other non-cancellable contracts for the supply of goods and services

71,847

95,284

Total operating commitments

71,847

 

Term classification of commitments

 

23,437

Not later than 1 year

23,949

23,949

More than 1 year but less than 2 years

23,949

47,898

Between 2 and 5 years

23,949

-

Greater than 5 years

-

95,284

Total operating commitments

71,847

 

STATEMENT OF NON-DEPARTMENTAL CONTINGENT LIABILITIES

AS AT 30 JUNE 2018

This statement discloses situations which exist at 30 June 2018, 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.

2017
Actual
$000 

 

2018
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. The accompanying notes form part of these statements.

 

 

Notes to non-departmental schedules
and statements

FOR THE YEAR ENDED 30 JUNE 2018

Note 2: Indirect Taxation

2017
Actual
$000

 

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

1,469,470

Road user charges

1,551,106

1,436,813

1,505,358

222,927

Motor vehicle registration fees

227,446

235,207

237,168

1,692,397

Sub-total

1,778,552

1,672,020

1,742,526

(56,243)

Fuel excise duty refunds

(65,170)

(57,227)

(59,981)

1,636,154

Total indirect taxation

1,713,382

1,614,793

1,682,545

Note 3: Other ‘Sovereign Power’ Revenue

2017
Actual
$000

 

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

189

Infringement fees – tolls and other

208

1,300

1,300

189

Total other ‘sovereign power’ revenue

208

1,300

1,300

 

Note 4: Other Operational Revenue

2017
Actual
$000

 

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

10,030

Tolling revenue

10,541

8,400

8,400

332

Road user charges administration fees

354

360

360

10,362

Total other operational revenue

10,895

8,760

8,760

 

Note 5: Non-departmental Output Classes

2017
Actual
$000

 

2018
Actual $000

2018
Budget $000

2018 Forecast $000

2,008,097

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

2,339,472

2,124,559

2,220,567

2,008,097

Total non-departmental output classes

2,339,472

2,124,559

2,220,567

 

 

 

Note 6: Other Expenses to be Incurred by the Crown

2017
Actual
$000

 

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

-

Auckland City Rail Link finance costs

 14,453

-

-

650

Membership of international organisations

 680

743

743

3,270

Rail – public policy projects

3,270

3,270

3,270

500

Rail – railway safety

500

500

500

26,386

SuperGold Card – public transport concessions for cardholders

28,171

29,320

29,010

13

Tauranga maritime incident response

-

-

-

22,000

Urban cycleways – local routes

33,253

49,543

39,793

52,819

Total other expenses to be incurred by the Crown

80,327

83,376

73,316

 

Note 7: Receivables 

2017
Actual
$000

 

2018
Actual
$000

2018
Budget
$000

2018
Forecast
$000

 

Non-exchange revenue

     

35,398

Motor vehicle registration fees

34,587

21,698

27,859

20,339

Road user charge revenue

23,680

15,000

16,000

55,737

Total non-exchange revenue receivables

58,267

36,698

43,859

 

Exchange revenue

     

2,481

Tolling revenue

2,556

2,392

2,481

2,481

Total exchange revenue receivables

2,556

2,392

2,481

58,218

Sub-total

60,823

39,090

46,340

(11,877)

Provision for doubtful debts

(13,824)

-

-

46,341

Total receivables

46,999

39,090

46,340


For motor vehicle registration 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. 

2016/2017

2017/2018

Gross

Impairment

Net

 

Gross

Impairment

Net

42,370

(1,200)

41,170

Not past due

42,993

(554)

42,439

3,390

(1,657)

1,733

Past due 1-30 days

4,231

(2,380)

1,851

2,473

(1,414)

1,059

Past due 31-60 days

2,447

(1,809)

638

3,266

(1,986)

1,280

Past due 61-90 days

4,077

(3,252)

825

6,719

(5,620)

1,099

Past due > 90 days

7,075

(5,829)

1,246

58,218

(11,877)

46,341

Total

60,823

(13,824)

46,999

 

 

 

Note 8: Investment in Joint Ventures

2017
Actual
$000

 

2018
Actual
$000

15,020

Joint venture airports

12,853

-

City Rail Link Limited

307,162

15,020

Total investment in joint ventures

320,015

 

Joint Venture Airports

2017
Actual
$000

 

2018
Actual
$000

(1,518)

Gains/(losses) generated by joint ventures

(14)

(1,518)

Share of net asset increase/(decrease) in joint ventures

(14)

-

Capital payments made during the year

1,097

-

Disposal of New Plymouth airport

 (3,250)

(1,518)

Total change in investment value

(2,167)

 

Joint Venture Airports
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 (Taupō, Whanganui, Westport, Whakātane, Whangarei), with the other 50 percent held by the local council. The Crown has a commitment
to 50 percent of operating losses and 50 percent of capital expenses once jointly approved. The value of the investment at 30 June 2018 is based on the annual financial statements of each airport for the year ended 30 June 2017, plus capital contributions from the Crown during the
year ended 30 June 2018.

New Plymouth airport was sold on 1 July 2017.

City Rail Link Limited

2017
Actual
$000

 

2018
Actual
$000

-

Gains/(losses) generated by joint ventures

(3,978)

-

Share of net asset increase/(decrease) in joint ventures

(3,978)

-

Capital payments made during the year

311,140

-

Total change in investment value

307,162


City Rail Link Limited
City Rail Link Limited (CRLL) is a jointly controlled Crown entity, co-funded by the Crown and Auckland Council, for the purpose of designing and constructing the Auckland City Rail Link
(an underground rail line between the city centre and the existing western line). The expected costs of the project are $3.4 billion which will be confirmed once all the contracts are finalised. The maximum funding limits for the project agreed by the Sponsors totals $3.6 billion. Therefore, the Government’s maximum share of costs is $1.8 billion.

For the year ended 30 June 2018, CRLL recognised revenue of $4 million (2017: $nil), a deficit
of $8 million (2017: $nil), assets of $625 million (2017: $nil), liabilities of $11 million (2017: $nil) and equity of $614 million (2017: $nil).

The Crown also recognises a 50% share of capital commitments held by CRLL of $128m.

Note 9: 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

2017
Actual
$000

 

2018
Actual
$000

158,000

Funding provided for construction

158,000

115,747

Notional interest charged since funding first drawn

129,551

(62,895)

Tolling revenue since February 2009

(73,436)

210,852

Balance at 30 June

214,115

Current year

2017
Actual
$000

 

2018
Actual
$000

207,299

Balance at 1 July

210,852 

13,583

Notional interest charge for the year

13,804 

(10,030)

Tolling revenue for the year

(10,541)

210,852

Balance at 30 June

214,115

 

Note 10: Payables 

2017
Actual
$000

 

2018
Actual $000

2018
Budget $000

2018
Forecast $000

404,639

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

460,381

400,000

400,000

20,566

GST payable

19,550

18,593

20,566

14,764

Motor vehicle registration third party collections

13,113

14,188

14,754

30,619

Output funding payable to KiwiRail

2,789

398

618

1,896

Road user charges refunds

3,270

1,800

1,900

50

Output funding payable to Maritime New Zealand

300

-

-

-

Output funding payable to other parties

265

-

-

472,534

Total payables

499,668

434,979 

437,838

 

 

Note 11: Financial Instruments 

2017
Actual
$000

 

2018
Actual
$000

 

Loans and receivables

 

77,937

Cash and cash equivalents

18,363

46,341

Receivables and advances

46,999

124,278

Total loans and receivables

65,362

 

Financial liabilities measured at amortised cost

 

472,534

Payables

499,668

472,534

Total financial liabilities measured at amortised cost

499,668

 

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 12: Major Budget Changes

Changes were made to the non-departmental budgets in the 2017/18 Supplementary Estimates. Explanations for significant variances are provided below.

Revenue and receipts

 

Budget
2018
$000

Changes in
forecast 2018
$000

Cumulative
vote 2018
$000

Indirect taxation

     

Road user charges

1,436,813

68,545

1,505,358

Motor vehicle registration

235,207

1,961

237,168

Fuel excise duty refunds

(57,227)

(2,754)

(59,981)

Total

1,614,793

67,752

1,682,545

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 expenses and capital expenditure appropriations

 

Budget 2018
$000

Changes
in
forecast
2018
$000

Cumulative
vote 2018
$000

Appropriations for non-departmental output expenses

 

 

 

Accident or incident investigation and reporting

5,530

310

5,840

Licensing activities

2,550

3,550

6,100

National Land Transport Programme PLA

2,066,767

90,898

2,157,665

Policy advice and related outputs – Civil Aviation MCA

1,779

300

2,079

Policy advice and related outputs – Maritime MCA

6,191

79

6,270

Regional Fuel Tax administration

-

1,000

1,000

Reinstatement of the South Island transport corridors MCA

-

90,000

90,000

Search and rescue and recreational boating safety activities PLA

9,662

250

9,912

Non-departmental other expenses

 

 

 

Bad debt provision – motor vehicle registration/licences and road user charges

4,000

2,000

6,000

SuperGold Card – public transport concessions for cardholders

29,320

(310)

29,010

Urban cycleways – local routes

49,543

(9,750)

39,793

Capital expenditure

 

 

 

Auckland Transport Package loan

116,000

6,000

122,000

Maritime New Zealand capital expenditure PLA

-

344

344

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

1,159,550

41,685

1,201,235

Rail – KiwiRail equity injection

12,100

27,641

39,741

Rail – KiwiRail Holdings Limited

220,000

40,000

260,000

Rail – Wellington metro rail network upgrade

25,900

(10,339)

15,561

Regional state highways

35,700

14,300

50,000

Reinstatement of South Island Main North Line

-

140,000

140,000

Reinstatement of South Island State Highway 1

325,000

(325,000)

-

Reinstatement of the South Island transport corridors MCA

-

355,000

355,000

Urban cycleways – Crown assets

6,000

503

6,503

 

Explanations for the major changes were outlined in the 2017/18 Supplementary Estimates. They were:

Accident or incident investigation and reporting
The appropriation increased by $0.310 million due to a reprioritisation within Vote Transport to meet costs from the November 2016 Kaikōura earthquake.

Licensing activities
This appropriation increased by $3.550 million due to an allocation from the Better Public Services seed fund for the NZ Transport Agency to develop app based learning tools to support progression through the licensing system and the development of safe driving skills.

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 National Land Transport Fund by legislation and is appropriated in these two appropriations – one operating and one capital.

There are four 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 times a year. The State highway capital appropriation is adjusted as required as revenue increases or decreases.
  • Allocations to other appropriations within Vote Transport that are funded from road tax revenue.
  • 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.

Policy advice and related outputs – Civil Aviation MCA
The appropriation increased by $0.300 million due to funding reprioritised from Vote Transport and Vote Business, Science and Innovation for unmanned aircraft certification activity.

Policy advice and related outputs – Maritime MCA
The appropriation increased by $0.079 million due to a carry forward from 2016/17 to enable Maritime New Zealand to participate in an international emergency training event.

Regional Fuel Tax administration
This appropriation increased by $1.000 million to provide the NZ Transport Agency funding to establish systems for the collection and distribution of Regional Fuel Tax.

Reinstatement of South Island Transport Corridors MCA
This appropriation increased by $445.000 million due to:

  • $325.000 million transferred from the capital expenditure appropriation previously established for this purpose, and
  • $120.000 million allocated out of the contingency fund for this project, to meet forecast expenditure.

Search and rescue and recreational boating safety activities PLA
This appropriation increased by $0.250 million due to anticipated additional search and rescue costs.

Bad debt provision – motor vehicle registration/licences and road user charges
The appropriation increased by $2.000 million due to NZ Transport Agency processing higher value bad debt write offs due to newer vehicles warrant of fitness now being three yearly.

SuperGold Card – public transport concessions for cardholders
This appropriation decreased by $0.310 million due to a reprioritisation of funds to elsewhere in Vote Transport to meet forecast costs.

Urban cycleways – local routes
This appropriation decreased by $9.750 million due to:

  • $5.000 million carried forward from 2016/17 (increase), and
  • $14.750 million carried forward to 2018/19 (decrease) to align with forecast expenditure.

Auckland Transport Package loan
This appropriation increased by $6.000 million due to a carry forward from 2016/17 due to slower than anticipated expenditure as resources were reprioritised to respond to the November 2016 Kaikōura earthquake.

Maritime New Zealand capital expenditure PLA
This appropriation increased by $0.344 million to reimburse Maritime New Zealand for higher variable search and rescue costs incurred in 2016/17.

Rail – KiwiRail equity injection
This appropriation increased by $27.641 million due to a carry forward from 2016/17 relating to delays in the sale of property.

Rail – KiwiRail Holdings Limited
This appropriation increased by $40.000 million for uninsured costs of repairing the Main North Line following the November 2016 Kaikōura earthquake.

Rail – Wellington metro rail network upgrade
This appropriation increased by $10.339 million due to:

  • $3.717 million carried forward from 2016/17 (increase), and
  • $14.056 million carried forward to 2018/19 and 2019/20 (decrease) to align with forecast expenditure.

Regional state highways
The appropriation increased by $14.300 million due to:

  • $5.018 million carried forward from 2016/17 (increase), and
  • $9.282 million transferred from 2020/21 (increase) to align with the NZ Transport Agency’s forecast expenditure.

Reinstatement of South Island Main North Line
This appropriation increased by $140.000 million to help KiwiRail meet the costs of reinstating the Main North Line following the November 2016 Kaikōura earthquake while they await the outcome of their insurance claim.

Reinstatement of South Island State Highway 1
This appropriation reduced by $325.000 million to nil as it was disestablished and replaced with a Multi-Category Appropriation.

Urban cycleways – Crown assets
This appropriation increased by $0.503 million due to:

  • $0.753 million carried forward from 2016/17 (increase), and
  • $0.250 million carried forward to 2018/19 (decrease) to align with forecast expenditure.

Note 13: 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 $25 million higher than forecast, mainly in indirect taxation. These revenues are demand driven and therefore difficult to forecast.

Schedule of non-departmental expenses
Total expenses were $119 million higher than forecast. The National Land Transport Programme expenditure was more than forecast.

Schedule of non-departmental assets
Non-departmental assets were $22 million lower than forecast. This is mainly because a finance charge relating to Auckland City Rail Link is operating in nature rather than an investment in a joint venture as originally forecast (see note 8 for explanation).

Schedule of non-departmental liabilities
Payables were $62 million higher than forecast. This is mainly in relation to additional expenditure on the National Land Transport Programme.

 

 

Appropriation statements

The following statements report information about the expenses and capital expenditure incurred against each appropriation, or other authority administered by the Ministry for the year ended 30 June 2018.

STATEMENT OF BUDGETED AND ACTUAL EXPENSES AND CAPITAL EXPENDITURE INCURRED AGAINST APPROPRIATIONS

FOR THE YEAR ENDED 30 JUNE 2018

Annual and permanent appropriations for Vote Transport

2017
Actual
$000

Appropriation title

2018
Actual
$000

2018
Forecast
$000

End-of-year performance information location*

 

Departmental output expenses 

 

 

 

 1,145 

Fuel excise duty refund administration 

 819 

 823 

 1 

 267 

Milford Sound/Piopiotahi Aerodrome operation
and administration 

 335 

 385 

 1 

 1,196 

Search and rescue activity coordination PLA 

 2,069 

 2,425 

 1 

 2,608 

Total departmental output expenses 

 3,223 

 3,633 

 

 

Departmental capital expenditure 

 

 

 

 442 

Ministry of Transport — capital expenditure PLA 

 - 

 1,522 

 1 

 

Non-departmental output expenses 

 

 

 

 5,639 

Accident or incident investigation and reporting 

 5,740 

 5,840 

 2 

 775 

Crash analysis 

 775 

 775 

 3 

 - 

Health and Safety at work activities - Civil Aviation 

 1,275 

 1,275 

 - 

Health and Safety at work activities – Maritime 

 6,160 

 6,315 

 5

 2,337 

Licensing activities 

 2,954 

 6,100 

 3 

 145 

Maritime port security 

 145 

 145 

 4 

 548 

Ministerial servicing by the NZ Transport Agency 

 548 

 548 

 3 

 1,888,232 

National Land Transport Programme PLA

 2,280,190 

 2,157,665 

 3 

 - 

Regional Fuel Tax administration 

 979 

 1,000 

 3 

 3,779 

Road user charges investigation and enforcement 

 3,779 

 3,779 

 3 

 450 

Road user charges refunds 

 450 

 450 

 3 

 3,244 

Search and rescue activities 

 3,231 

 3,231 

 5 

 8,285 

Search and rescue and recreational boating safety activities PLA 

 9,714 

 9,912 

 6 

 95 

SuperGold card – administration of the public transport concessions scheme 

 95 

 95 

 3 

 21,917 

Weather forecasts and warnings 

 23,437 

 23,437 

 6 

 72,651 

Reinstatement of South Island State Highway 1 

 - 

 - 

 3 

 2,008,097 

Total non-departmental output expenses 

 2,339,472 

 2,220,567 

 

 

 

2017
Actual
$000

Appropriation title

2018
Actual
$000

2018
Forecast
$000

End-of-year performance information location*

 

Non-departmental other expenses 

 

 

 

 6,013 

Bad debt provision – motor vehicle registration/licences and road user charges 

 4,965 

 6,000 

 8 

Auckland City Rail Link finance costs 

14,453

 - 

 - 

650 

Membership of international organisations 

 680 

 743 

 8 

3,270 

Rail – public policy projects 

 3,270 

 3,270 

 7 

500 

Rail – railway safety 

 500 

 500 

 7 

26,386 

SuperGold Card – public transport concessions for cardholders 

 28,171 

 29,010 

 3 

13 

Tauranga maritime incident response 

 - 

 - 

 5 

22,000 

Urban cycleways – local routes 

 33,253 

 39,793 

 3 

58,832

Total non-departmental other expenses 

85,292

 79,316 

 

 

Non-departmental capital expenditure 

 

 

 

 - 

Auckland City Rail Link 

311,140

 436,000 

 9 

 116,200 

Auckland Transport Package loan 

 100,000 

 122,000 

 3 

 2,700 

Aviation Security Service 

 - 

 - 

 4 

 86 

Joint venture airports 

 1,097 

 500 

 1 

 - 

Joint venture airports – Crown contribution MYA 

 - 

 - 

 8 

 835 

Maritime New Zealand 

 - 

 - 

 5 

 - 

Maritime New Zealand capital expenditure PLA 

 344 

 344 

 - 

NLTF borrowing facility for short-term advances 

 - 

 500,000 

 3 

 14,959 

Rail – KiwiRail equity injection 

 3,026 

 39,741 

 7 

 190,200 

Rail – KiwiRail Holdings Limited 

 260,000 

 260,000 

 7 

 - 

Rail – KiwiRail Holdings Limited Loans 

 163,500 

 163,500 

 7

 4,553 

Rail – Wellington metro rail network upgrade 

 11,665 

 15,561 

 7 

 45,409 

Regional State highways 

 43,625 

 50,000 

 3 

 20,486 

Reinstatement of South Island State Highway 1 

 - 

 - 

 3 

 30,000 

Reinstatement of Main North Line 

 - 

 - 

 7 

 - 

Reinstatement of South Island Main North Line 

 140,000 

 140,000 

 7

 11,000 

Roading – reinstatement of earthquake damaged roads in Christchurch – loan 

 - 

 - 

 3 

 3,247 

Urban cycleways – Crown assets 

 4,389 

 6,503 

 3 

 1,113,776 

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

 1,091,246 

 1,201,235 

 3 

1,553,451

Total non-departmental capital expenditure 

2,130,032

2,935,384

 

 

 

 

2017
Actual
$000

Appropriation title

2018
Actual
$000

2018
Forecast
$000

End-of-year performance information location*

 

Multi-category appropriations (MCA) 

 

 

 

 31,928 

Policy advice and related outputs MCA 

 32,398 

 35,282 

 1 

 

Departmental output expenses 

 

 

 

 28,543 

Policy advice 

 27,717 

 30,282 

 

 2,594 

Ministerial servicing 

 2,568 

 2,300 

 

 791 

Governance and performance advice on Crown agencies 

 2,113 

 2,700 

 

 3,389 

Policy advice and related outputs – Civil Aviation MCA 

 2,079 

 2,079 

 1, 4 

 

Non-departmental output expenses 

 

 

 

 663 

Policy advice – Civil Aviation 

 963 

 963 

 

 431 

Ministerial servicing – Civil Aviation 

 431 

 431 

 

 1,610 

Health and safety in employment activities – Civil Aviation 

 - 

 - 

 

 685 

International relations and International Civil Aviation Organization obligations 

 685 

 685 

 

 9,144 

Policy advice and related outputs – Maritime MCA 

 6,196 

 6,270 

 1, 5 

 

Non-departmental output expenses 

 

 

 

 3,406 

Policy advice – Maritime 

 3,349 

 3,349 

 

 685 

Maritime – incident response 

 769 

 843 

 

 2,078 

Maritime safety and marine protection services 

 2,078 

 2,078 

 

 2,975 

Health and safety in employment activities – Maritime 

 - 

 - 

 

 - 

Reinstatement of the South Island transport corridors MCA 

 432,731 

 445,000 

 1, 3 

 

Non-departmental output expenses 

 

 

 

 - 

Restoration of State Highway 1 between Picton and Christchurch 

 82,714 

 90,000 

 

 

Non-departmental capital expenditure 

 

 

 

 - 

Rebuild of State Highway 1 between Picton and Christchurch 

 350,017 

 355,000 

 

 44,461 

Total multi-category appropriations 

 473,404 

 488,631 

 

 

*The numbers in this column represent where the end-of-year performance information is reported for each appropriation administered by the Ministry, as detailed below:

  1. The Ministry’s annual report
  2. The Transport Accident Investigation Commission’s annual report
  3. The NZ Transport Agency’s annual report
  4. The Civil Aviation Authority’s annual report
  5. Maritime New Zealand’s annual report
  6. To be reported by the Minister of Transport in a report appended to this annual report.
  7. KiwiRail’s annual report
  8. Not reported, as an exemption exists under section 15D of the Public Finance Act 1989.
  9. City Rail Link Limited’s annual report

**These appropriations are permanent legislative authority appropriations (PLAs) that relate to the National Land Transport Fund (the NLTF). The total of these appropriations is limited by the revenue hypothecated to the NLTF and the appropriation sizes in the Estimates are indicative only.

 

 

STATEMENT OF EXPENSES AND CAPITAL EXPENDITURE INCURRED WITHOUT, OR IN EXCESS OF, APPROPRIATION OR OTHER AUTHORITY

FOR THE YEAR ENDED 30 JUNE 2018

 

Expenditure 2017/18
$000

Unaudited
Supplementary
Estimates 2017/18
$000

Unappropriated
Expenditure 2017/18
$000

Non-departmental other expenses

     

Auckland City Rail Link finance costs

14,453

-

14,453

Appropriations for capital contributions to other organisations

     

Joint venture airports

1,097

500

597

 

Expenses and capital expenditure incurred without appropriation or outside scope or period 

Auckland City Rail Link finance costs 
A finance charge of $14.453 million was paid to Auckland Council in December 2017 for costs relating to stage 1 enabling works and interim funding for the Auckland City Rail Link, to which
the Crown and Auckland Council are joint sponsors. This expenditure was initially treated as
capital expenditure and is within the funding limits approved by Cabinet for the Crown’s share
of the Auckland City Rail Link. The Ministry and the Treasury have subsequently agreed that the finance costs do not meet the Crown’s capitalisation policy and are operating in nature. There
is no operating appropriation for the Crown’s commitment to the Auckland City Rail Link and therefore this expenditure was unappropriated. This breach is due to the classification of expenditure only and no further funding is required to cover the expenditure, it will be included
in the total funding already committed by the Crown.

Joint venture airports 
The Ministry of Transport administers the appropriation Joint Venture Airports and is responsible for the Crown’s share of costs incurred by joint venture airports. A number of claims for costs dating back over a number of years have been made to the Ministry of Transport in the 2017/18 year. Cabinet has given approval for costs of up to $0.700 million to be met from Imprest Supply. The amount of these claims has resulted in the appropriation exceeding the authority published
in the Supplementary Estimates by $0.597 million.

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