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For the year ended 30 June 2013

Changes to the output class structure

In the year to 30 June 2012, the Ministry’s output classes were:

  • Policy advice

  • Governance and performance advice for Crown agencies

  • Land transport revenue forecasting and strategy

  • Road user charges collection, investigation and enforcement

  • Fuel excise duty refund administration

  • Milford Sound/ Piopiotahi Aerodrome operation and administration

  • Search and rescue activity coordination PLA.

Changes have been agreed to in the Ministry’s output classes for 2012/13. These are explained below.

Review of government expenditure on policy advice

Treasury undertook a review of policy advice expenditure across all government agencies to ensure that the definition of policy advice was consistent. The Ministry followed the recommendations of the review and restructured its output classes. From 1 July 2012, a multi class output appropriation (MCOA) was established entitled ‘Policy advice and related outputs’ – the component outputs were: Policy advice, Governance and performance advice for Crown agencies, and Ministerial servicing.

The ’Governance and performance advice for Crown agencies‘ output is practically the same as the previous output class of this name. Ministerial servicing was previously part of the Policy advice output class. The output class ’Land transport revenue forecasting and strategy‘ is now part of the Policy advice output. There was no change in the available funding as a result of this restructure.

Clifford Bay ferry terminal proposal

The Ministry is testing the commercial viability of this proposal. During 2012/13, Cabinet agreed that the project could proceed to its next stage. As this work is significant and different to most of the Ministry’s work, a new output entitled ‘Clifford Bay ferry terminal – facilitation of procurement’ was created from 1 December 2012 under the MCOA Policy advice and related outputs. There was no change in the available funding as a result of this. Work on this project prior to 1 December 2012 is included in the Policy advice output.

Road user charges collection, investigation and enforcement output class

Following the review of the road user charges regime, these activities became the responsibility of the NZ Transport Agency from 1 July 2012 and are no longer an output class of the Ministry. The Ministry’s funding declined by the amount of this output class.

Output classes in place during 2012/13

Thus the output classes being reported in this annual report are:

  • Policy advice and related outputs MCOA

  • Fuel excise duty refund administration

  • Milford Sound/Piopiotahi Aerodrome operation and administration

  • Search and rescue activity coordination PLA1.

The outputs for Fuel excise duty refund administration, Milford Sound/Piopiotahi Aerodrome operation and administration, and Search and rescue activity coordination PLA are unchanged from 2011/12. Some financial and non-financial performance measures for 2011/12 are shown as comparatives in the tables below but this is not always possible due to the changes to the output classes.

Where possible and relevant, related projects and activities are shown below each output, categorised by the Ministry’s intermediate outcomes and impacts.

Output class: Policy advice and related outputs multi class output appropriation

Four outputs make up this output class. These are (listed by size):

  • Policy advice

  • Ministerial servicing

  • Clifford Bay ferry terminal - facilitation of procurement

  • Governance and performance advice for Crown agencies.

The outputs are directed at the government’s long-term outcome of an effective, efficient, safe, secure, accessible and resilient transport system that supports the growth of our economy, in order to deliver greater prosperity, security and opportunities for all New Zealanders.

Output: Policy advice

This output is for 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 transport.

The performance measures and cost in this output have been further split by transport mode:

 
Policy advice - financial performance

Actual
2011/12
$000
  Actual
2012/13
$000
Main Estimates
2012/13
$000
Supplementary
Estimates
2012/13
$000
N/A Reveue Crown

24,431

26,606 25,736
N/A Other Revenue 51 - 53
N/A Total revenue 24,482 26,606 25,789
N/A Total expenses 24,151 26,606 25,789
N/A Net surplus 331 -  

Total expenditure on this output class was lower than forecast due to lower staff costs as a result of turnover and some projects being delayed. The underspend was spread across all of the modes. The Ministry has approval in principle to carry up to $1.32 million forward to 2013/14 to complete the work.

Road

Road - performance measures

Actual
2011/12
Performance measures Actual
2012/13
Standards/
Targets
2012/13
N/A Revenue forecasting provided for use in Crown accounts and Budget forecasts Twice yearly Twice yearly
N/A Ministry actions from 2011/12 Safer Journeys Action Plan are implemented according to agreed timeframes  92% 100%
New 2013-15 Safer Journeys Action Plan developed by 30 December 2012 Not achieved. Developed by March 2013 Achieved
New Trials of ‘incentives approach’ to road safety completed, as agreed by the National Road Safety Council, by 30 June 2013 Achieved Achieved
New Advice provided to government on options to address land transport funding pressures as a consequence of the Canterbury earthquakes by 31 October 2012  Achieved Achieved
New Drafting instructions for Land Transport Amendment Bill (amending agricultural vehicle licensing requirements as agreed by government) issued by 30 December 2012  Government decided that this was no longer required Achieved
New Drafting instructions for changes to the vehicle and operator registration and licensing provisions of the Land Transport Act issued, subject to government decisions, by November 2012 Goverment decided that this was no longer required Achieved
New Road user charges regulations promulgated and successfully implemented by 1 August 2012  Achieved* Achieved
New First cycle of evaluation and monitoring of new road user charges system (including a survey of users) completed by 30 June 2013  Achieved Achieved
New Amendments to transport rule for agricultural vehicle licensing requirements completed by 30 December 2012  Not achieved.  Completed by June 2013 Achieved
New Land Transport Management Act amendments supported through Select Committee processes, in accordance with Select Committee requirements   Achieved  Achieved
New Fuel excise duty and road user charges levels adjusted as required, in accordance with agreed timeframes   100%  100%
$8,873,496 Cost
This output is produced within the overall class appropriation (GST exclusive)
 $8,691,005  $10,250,000

*The Road User Charges (Transitional Matters) Regulations 2012 were subsequently disallowed, and further work was required.

Road - Ministry outcomes and impacts

Ministry intermediate outcome Better quality regulation
Impact 1: A more efficient transport regulatory system that does not impose unnecessary costs on users

Vehicle Licensing Reform

The Vehicle Licensing Reform project began in March 2012. This project identified potentially considerable compliance cost savings for New Zealanders. The Ministry and NZ Transport Agency jointly made recommendations to the government in December 2012 on changes to the warrant of fitness, certificate of fitness, annual vehicle licensing and transport services licensing systems. The recommendations were developed after extensive analysis, stakeholder engagement and public consultation. Changes to the warrant of fitness system are estimated to result in net benefits of $1.8 billion over 30 years.

Following Cabinet’s decisions in January 2013, the Ministry has been supporting the NZ Transport Agency to implement the warrant of fitness and certificate of fitness changes to come into force by 1 July 2014, and to develop specific proposals for improving annual vehicle licensing and transport services licensing for Cabinet consideration in late 2013.

Road user charges (RUC)

The Road User Charges Act 2012 came into effect on 1 August 2012, along with various new and/or transitional regulations. These amendments are the most significant change to the RUC system since it was introduced more than three decades ago. The new system is expected to encourage operators to make efficient choices in terms of the vehicles they purchase and the way they use them, increasing network efficiency. It will also reduce the opportunities for evasion and will enable simpler administration, reducing transactional and compliance costs for users and the government, and ensure sufficient revenue is raised efficiently.

The Cost Allocation Model has been redesigned, in time to inform 2013 RUC rates changes, and in June 2013 the first of three annual evaluations of the implementation and operation of the RUC reforms was completed.

In June 2013 an MOU was also signed with the NZ Transport Agency on funding arrangements for the development of guidelines for RUC systems.

Agricultural Vehicles Legislation

The Ministry oversaw the development, consultation and completion of rule changes simplifying the on-road operation of agricultural vehicles. The amendment rules took effect from 1 June 2013 (except for warrant of fitness changes which take effect from 11 November 2013).

The amendment rules maintain road safety while reducing compliance costs for the agricultural sector in the key areas of work time compliance, warrant of fitness testing and miscellaneous costs, and driver licensing costs. It is estimated that these amendment rules will result in a net benefit to the sector of $51 million over 25 years.

Ministry intermediate outcome: Improved planning and investment in infrastructure and services
Impact 4: Central and local government have good frameworks for investment decision making
  

Development of advice to address the pressures on the transport funding system

An ongoing, core function of the Ministry is to provide advice to Cabinet on revenue and funding pressures on the transport system. In the past year, the Ministry has provided advice on revenue pressures facing the NZ Transport Agency and options to mitigate these. The Ministry has also provided advice on future land transport funding pressures, the adequacy of current funding and revenue tools and options.

This work helped provide the NZ Transport Agency with certainty on the management of pressures from lower than expected revenues and uncertainty around future costs arising from the reinstatement of Christchurch roads following the earthquake, enabling the National Land Transport Plan 2012-2015 to be finalised. The work also put the upcoming Auckland-related cost pressures into a long-term context, and reaffirmed the suitability of the ‘pay-as-you-go’ approach to funding land transport infrastructure.

Infrastructure Work Programme

The Ministry is developing an overarching framework for transport infrastructure. This links with the government’s National Infrastructure Plan and the Business Growth agenda with key projects led by the Ministry and other agencies, for example the NZ Transport Agency. 

Land Transport Management Amendment Act 2013

During 2012/13, the Land Transport Management Amendment Act 2013 was introduced
and enacted.

This Act simplifies the regulatory environment for land transport planning, and for tolling, procurement and borrowing. These changes will promote greater administrative efficiency without undermining quality assurance checks and balances. The Act also helps implement the Public Transport Operating Model, which is intended to support greater collaboration between regional councils and public transport operators, encourage passenger growth, increase competition in the provision of public transport services and reduce reliance on public subsidies. 

Impact 6: Enough money is raised efficiently and fairly to fund investment priorities
  

Development of the next Government Policy Statement (GPS) on Land Transport Funding

The GPS sets out what the government wants to achieve for land transport, providing direction for planning and investment in the land transport sector. The GPS has a key role in ensuring the long-term effectiveness of the network through optimal investment, providing certainty to transport planners and funders, and ensuring that funds are allocated effectively.

A new GPS is required to come into effect on 1 July 2015, and will be released in July 2014 to guide the development of the next cycle of local government long-term plans and the National Land Transport Programme 2015-18. Planning for the new GPS is underway. Key development phases will include analysis of how investment in the transport system contributes to the objectives for land transport, and engaging with key stakeholders including Local Government NZ and the NZ Transport Agency.  

Fuel excise duty (FED) and road user charges (RUC) revenue meet land transport funding requirements

In December 2012 Cabinet agreed to increases of 3 cents per litre to FED, and equivalent increases to RUC on each of 1 July 2013, 1 July 2014, and 1 July 2015. The FED increases and the 2013 RUC increase were signed into law in May 2013.

These changes will contribute to ensuring enough revenue is raised efficiently and fairly to fund land transport investment priorities. 

National Land Transport Fund – revenue forecasting

The Ministry has continued to monitor revenue forecasts for the National Land Transport Fund. This includes alerting the Minister when revenues fluctuate, and providing advice on possible interventions. 

Ministry intermediate outcome:

Fewer transport incidents and other harms

Impact 7: Ministry road safety initiatives support reductions in number of deaths and serious injuries

Safer Journeys Action Plan 2011-12

Safer Journeys Action Plans give effect to Safer Journeys, the government’s Road Safety Strategy 2010 to 2020. The first action plan underpinned much of our road safety work in the last year. New initiatives included the introduction of an alcohol interlock programme and zero alcohol rate for high-risk drivers. Advice was provided to government on time limits on learner and restricted licences, and red light cameras. New rules were signed into law that extend the maximum age for mandated use of approved child restraints.

Safer Journeys Action Plan 2013-15

The Ministry led the development and delivery of a further Safer Journeys Action Plan
2013-15. This is now in its implementation phase and it sets long-term aims that will:

  • promote the safe system approach
  • address speed management
  • reduce impaired driver crashes
  • improve the safety of the New Zealand vehicle fleet.

Intelligent Transport Systems

Cooperative intelligent transport system technology enables us to better understand and therefore manage freight movements and the corresponding infrastructure. In 2013 the Ministry commissioned a trial of this technology on State Highway 2, and other regional highways in the Bay of Plenty and Waikato regions.

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Rail

Rail – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

$417,741

Cost

This output is produced within the overall class appropriation (GST exclusive)

$349,573

$425,000

 Rail – Ministry outcomes and impacts

Ministry intermediate outcome:

Improved planning and investment in infrastructure and services

Impact 5: The Ministry provides good investment advice (in the national interest)

KiwiRail Turnaround Plan

In 2010 the Ministry provided a briefing for Ministers, setting out the public policy reasons for investing in rail. This document was refreshed for Budget 2013. It sets out the benefits that rail provides for the economy, including freight volume growth, 25% growth in core freight revenues over two years, and enabling a stronger, more resilient and efficient transport system. In the three years to 30 June 2013, $750 million has been appropriated for the Turnaround Plan over the last 3 years, with $94 million appropriated to 2013/14.

Auckland City Rail Link

The Ministry worked with the Treasury, in consultation with the NZ Transport Agency, to provide advice to the Ministers of Transport and Finance on the City Rail Link.

Napier-Gisborne Rail Link

The Ministry reviewed assessments made by KiwiRail and the NZ Transport Agency on the impact of mothballing the Napier to Gisborne railway line, and provided advice to the Minister.

Capital Connection

The Ministry provided advice to the Minister on the future of the Capital Connection rail service, following work done by Greater Wellington and Horizons Regional Councils, by KiwiRail and by the NZ Transport Agency.

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Maritime

Maritime – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Maritime Transport Act amendments supported through select committee processes, in accordance with select committee requirements.

Achieved

Achieved

New

New Order-in-Council establishing level of Oil Pollution Levy comes into force by December 2012.

Not achieved.
In force from
1 July 2013

Achieved

New

Port productivity data published quarterly.

100%

100%

New

Maritime NZ funding review, including new regulations, completed by
30 June 2013 (subject to government decisions on the review).

Achieved

Achieved

$4,412,258

Cost

This output is produced within the overall class appropriation
(GST exclusive).

$3,251,564

$3,540,000

 Maritime – Ministry outcomes and impacts

Ministry intermediate outcome:

Better quality regulation

Impact 1: A more efficient transport regulatory system that does not impose unnecessary costs on users

Marine Legislation Bill

The Marine Legislation Bill was introduced during 2012/13 and is currently awaiting consideration by the Committee of the Whole House. It will promote maritime safety and marine environment protection through amendments to the Maritime Transport Act 1994 and the Exclusive Economic Zone and Continental Shelf (Environmental Effects) Act 2012, that will:

  • enable New Zealand to accede to three international maritime conventions. In particular, amendments that give effect to the 1996 Protocol to amend the International Convention on Limitation of Liability for Maritime Claims 1976 will substantially increase the amount of compensation payable for incidents like the MV Rena grounding
  • transfer the local regulation of navigation safety from the Local Government Act 1974 to the Maritime Transport Act 1994 and specify port operators’ responsibilities in relation to maritime safety
  • improve the clarity, completeness, effectiveness or enforceability of certain provisions in the Act.

Maritime Funding Review

The Maritime Funding Review was completed in 2012/13. The review has resulted in an enduring funding framework being put in place to enable Maritime NZ to deliver its regulatory functions. The changes became effective on 1 July 2013. They will be phased in over six years and will attribute costs across the maritime sector and Crown agencies more appropriately.

Ministry intermediate outcome:

Improved preparedness

Impact 10: Reduced future risk for New Zealand from grounding of ships

Oil Pollution Levy

In the past year the Ministry has completed a review of the Oil Pollution Levy. This levy is collected from the commercial shipping sector and paid into the New Zealand Oil Pollution Fund which is used to ensure that New Zealand meets domestic and international requirements for preparedness and response to marine oil spills.

The new levies came into force on 1 July 2013 and will ensure that the Fund is put on a sustainable financial footing so that revenue can cover anticipated future expenditure.

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 Aviation

Aviation – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

International air services negotiations completed in accordance with annual schedule.

94%

75%

New

Advice provided on quality of Civil Aviation Authority’s funding review.

Not achieved1

Within 30 working days of completion of review

 

$3,258,914

Cost

This output is produced within the overall class appropriation
(GST exclusive).

 

$3,368,541

 

$3,465,000

 1 This advice will now be provided as part of the longer term programme for fees, charges and levies reviews.

Aviation – Ministry outcomes and impacts

Ministry intermediate outcome:

Better quality regulation

Impact 1: A more efficient transport regulatory system that does not impose unnecessary costs on users

Civil Aviation Act 1990

The Ministry is leading a review of this Act, which governs the civil aviation system in New Zealand. While the Act is fundamentally sound, it is over 20 years old and during this time there have been a number of changes in the aviation industry. Aviation is a dynamic industry, and it continues to change rapidly due to increased demand for services, improved technology, the increasing cost of jet fuel and environmental concerns. The Act must achieve a flexible, responsive regulatory system to support changes in the sector where possible. We will also improve the Act’s usability and ensure the Act continues to achieve its purpose to promote civil aviation safety and security. The review will also reconsider the relationship between the Civil Aviation Act and the Airport Authorities Act 1966. The Ministry is aiming to complete a suite of recommendations by early 2014.

Civil Aviation Authority Funding Review

The Ministry advised the Minister of Transport on the Civil Aviation Authority’s proposals for a new funding framework and increased civil aviation fees, charges and levies. The government supported the Minister’s proposals, which came into effect on 1 November 2012.

The new arrangements aim to recover costs from those who benefit and will provide additional funding for the Civil Aviation Authority to implement a range of performance improvements over the 2012-15 period. These improvements are intended to further enhance the entity’s capability and services and to create both a durable and effective regulator and organisation. The Civil Aviation Authority’s Annual Report should provide comment on the related realisation of benefits expected from the new arrangements and the earlier organisational change programme.

Passenger Security Charges Review

In May 2011, the government agreed to reduce passenger security charges for two years to eliminate a projected accumulated surplus of $27 million by June 2013. In 2012/13 the Ministry advised on a further review by the Civil Aviation Authority Board to reset these charges to ensure sufficient funding to meet the Aviation Security Service’s normal operating costs and partly replenish reserves after an unexpected operating shortfall. The government agreed to increase the international passenger security charge from $8.00 to $11.98 (GST inclusive) and the domestic passenger security charge from $3.70 to $4.60 (GST inclusive). These new charges took effect from 1 June 2013.

 

Ministry intermediate outcome:

Open and efficient transport markets

Impact 2: Reduced or removed barriers to entry to domestic or international transport markets

Negotiations for new/expanded air services arrangements

In 2012/13 the Ministry successfully negotiated a record number of new or amended air services arrangements. We aimed to initiate, advance or finalise amended or new agreements with 17 countries, and we have successfully initiated, advanced or finalised agreements with 20 countries (it was planned to finalise five agreements in 2012/13: this was exceeded and 11 agreements were finalised).

Entirely new open skies agreements have been established with Qatar, Kuwait, Paraguay, Uruguay and Iceland. The Ministry has replaced existing agreements with new open-skies agreements for Brazil and Chinese Taipei; and has amended existing agreements with the United Arab Emirates, Papua New Guinea, Indonesia and French Polynesia.

Oversight and coordination of the Ministry’s aviation interests at international transport forums

In March 2013 the Ministry played an active role in the 6th World-wide Air Transport Conference hosted by the International Civil Aviation Organisation. The conclusions of the conference will assist us in encouraging bilateral air services partners to remove barriers.

In the past year, the Ministry has also represented New Zealand at two APEC Transportation Working Group meetings held in Vietnam and Indonesia. Important goals for the working group are to develop systems that ensure safe, secure, and efficient movement of people and goods throughout the region; and to assist with capacity building in developing economies to contribute to efficient, safe, secure and sustainable transport in the APEC region.

In June 2013, the Ministry participated in an APEC workshop on Global Supply Chain Resilience. This focused on ways to enhance supply chains, particularly in the event of a large-scale disaster, to support both public and private sectors in finding, developing and using the most efficient supply chains to ensure the safe and secure transportation of goods and services.

 

Ministry intermediate outcome:

Improved preparedness

Impact 9: Reduced disruptions to access to transport infrastructure and services

Aviation security preparedness

The Ministry has progressed policy work to investigate the impact of new liquids, aerosols and gels technologies in the New Zealand aviation environment. We have also worked with the Civil Aviation Authority and Air New Zealand to ensure New Zealand meets the United States requirement to screen 100% of all air cargo transiting New Zealand to the United States.

The Ministry has continued to build our relationship with the Australian Office of Transport Security to ensure greater continuity and collaboration on security issues.

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Multi-modal

Multi-modal – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Lessons learned from review of Canterbury earthquakes response and MV Rena grounding investigation recommendations applied to transport emergency management systems by 30 December 2012.

Partially achieved1

100%

New

Freight Information Gathering System data published quarterly.

75%2

100%

Not achieved. 90% completed as agreed3

Key initiatives contained in the annual work programme are completed or progressed as agreed, or as subsequently amended by the agreement between the Minister and the Chief Executive4.

96%

95%

Not achieved 83%3

Percentage of policy papers submitted to the annual survey of quality by NZIER that receive a score of 7.5 out of 10 or more (6.5 for 2011/12).

51%

80%

71%

Rules and regulations are developed as specified in the agreed annual rules programme.

77%5

90%

New

Programme to periodically review transport legislation and subordinate regulation established by 30 August 2012.

Achieved

Achieved

New

Annual programme of periodic reviews of legislation and regulation completed by 30 June each year.

100%

100%

100%

Advice Quality Characteristics (refer to Conditions on use of Appropriation) as determined through delivery recorded against the project plan.

Not reported against6

100%

 

$11,578,154

Cost

This output is produced within the overall class appropriation (GST exclusive).

 

$8,489,012

 

$8,109,000

1 Transport national emergency response plan updated in June 2013 with testing carried out in July 2013.

2 Four FIGs reports have been released in 2012/13; one report every quarter, however one of these was delayed due to a data feed issue.

3 This performance measure was part of the output class Policy advice in 2011/12.

4 The Ministry’s annual work programme with the Minister is a ‘living’ document that is subject to change throughout the year in discussion with the Minister. Quarterly reports to the Minister identify new, deferred and cancelled projects. In addition, changes to milestones and time frames are agreed with the Minister through briefings and discussions on individual initiatives.

5 26 rules were due to progress or be completed in 2012/13. 20 rules were actually progressed or completed, following appropriate consultation.

6 The Ministry completes covering pages to evidence these characteristics have been met, however, these pages are not retained and therefore this measure
 cannot be reported against.

 Multi-modal – Ministry outcomes and impacts

Ministry intermediate outcome:

Better quality regulation

Impact 1: A more efficient transport regulatory system that does not impose unnecessary costs on users

 

Regulatory Reform

The Ministry continues to progress a programme for regulatory reform across three key areas:

Opportunities for reform in the transport sector:  A number of projects have been progressed that will result in significant savings and other benefits for New Zealand,  including the Agricultural Vehicles Review, Vehicle Licensing Reform(external link), the multi-modal ‘Management of Drugs and Alcohol in Adventure Tourism’, and the Vehicle Exhaust Emissions amendments.

A new project has also been initiated that will examine the regulatory efficiency of the transport regulatory framework and may identify further opportunities for reform.

Improving the way we carry out our regulatory business as usual: Greater active management of the annual rules programme with our transport agency partners has resulted in considerable progress to ensure a clear policy rationale and focus for every rule on the programme and a significant decrease in the size of the rules programme overall.

Developing our regulatory capability: for the first time the government transport sector has developed guidance material designed to improve the quality of our regulatory stock. Designed by the Ministry, in collaboration with our transport agency partners, the Transport Regulatory Policy Statement provides expectations for best practice regulatory development and implementation, and the Regulatory Development and Rule Production Handbook complements it by assisting the Ministry and transport agencies to develop regulatory interventions by standardising a process that is used across the sector.

Development of a longer term programme for fees, charges and levies reviews: A key lesson from the above reviews was the need to improve the management and implementation of the third-party funding (fees, levies and charges) regime that the Ministry and the transport sector Crown agencies (NZ Transport Authority, Maritime NZ and the Civil Aviation Authority) currently administer. There are over 75 different fees, levies and charges for users of transport-related services that generate over $200 million per annum.

A draft framework has been developed with the intention of ensuring that reviews of third-party funding are coordinated, comprehensive, consistent and supported by a rigorous process. The focus in 2013/14 will include developing a schedule of when reviews should be carried out. This aims to address priorities within the sector and to ensure sufficient resource is allocated to enable reviews to be carried out to a high standard.

 

Ministry intermediate outcome:

Open and efficient transport markets

Impact 3: Transport sector has increased information available to it

 

Freight Information Gathering System (FIGS)

FIGS gives an insight into the logistics chain and how it is evolving. It assists the industry to consider the drivers of those changes. New information that was included for the first time during 2012/13 showed the proportions of trade, by both volume and value, shipped in containers and in bulk. During the year, the Ministry moved from producing quarterly reports to producing rolling annual reports. Two reports were released for the periods 1 January 2012 – 31 December 2012 and 1 April 2012 – 31 March 2013.

 

Freight Studies

The National Freight Demands Study is the pivotal source of information on New Zealand’s freight task. The current study reflects the sector as it was in 2006/07. During 2012/13 the Ministry commenced a project to update the study.

The Ministry is also undertaking a Future Freight Scenario Study, which will improve the Ministry’s understanding of the strategic choices New Zealand has, and the impacts these choices could have on the wider freight system and the international competitiveness of New Zealand’s firms. The study will help facilitate and inform discussions with exporters and infrastructure and freight service providers. Knowledge of the likely bottlenecks, costs and benefits can inform the strategic choices they make.

Both the National Freight Demands Study and the Future Freight Scenario Study are expected to be completed early in 2014.

Auckland

The Ministry led and coordinated feedback with the Treasury and the NZ Transport Agency on Auckland Transport’s City Centre Future Access Study and led analysis and advice to Ministers on the outcomes of the study. This study was commissioned by Auckland Transport after the previous Minister of Transport wrote to the Mayor of Auckland requesting a thorough analysis of options for meeting the forecast growth in demand for access into the city centre.

The Ministry provided supporting analysis and advice for the government’s Auckland transport package. This package included decisions on the next generation of major transport infrastructure projects for the city and bringing forward construction start dates for key State highway projects.

 

Ministry intermediate outcome:

Improved planning and investment in infrastructure and services

Impact 4: Central and local government have good frameworks for investment decision making

Exploration of alternative funding approaches, including non-pricing approaches

This is ongoing work as a core function of the Ministry. An example is the advice provided to Cabinet on the use of a Public Private Partnership (PPP) for the procurement of the Transmission Gully section of the Wellington Northern Corridor Road of National Significance. Cabinet’s agreement to use a PPP for Transmission Gully will provide an opportunity to seek greater innovation and potential downstream cost savings to the national programme of roading construction, maintenance and/or renewal, by bringing in private sector capital and incentivising greater innovation in the design, construction and operation of roads.

Network optimisation remains a topic of interest, and some low level research has been undertaken in the area. This work will gain prominence over 2013/14 through the development of the next Government Policy Statement on Land Transport Funding 2015.

 

Ministry intermediate outcome:

Improved preparedness

Impact 9: Reduced disruptions to transport infrastructure and services

Review findings and implement changes to transport response as an outcome of the Canterbury earthquakes and the MV Rena grounding

Findings from the Canterbury earthquakes and the MV Rena grounding have influenced the Ministry’s emergency response arrangements and contributed toward the development of a work programme on ‘resilience’ — now one of the Ministry’s four long-term desired outcomes for transport. The work programme will look at developing a government sector-wide understanding of resilience and, following this, how to develop a testing and assessment framework for resilience. The Ministry has worked with the Treasury to further develop resilience as a principle within the National Infrastructure Plan, and worked closely with other departments and agencies to assess transport within the National Security System.

Operationally, themes were incorporated into a revised Transport National Emergency Response Plan that account for improved communications, flexibility and agility, practising and preparedness.

 Output: Ministerial servicing

This output is for services to Ministers to enable them to discharge their portfolio (other than policy decision-making) responsibilities.

Ministerial servicing – financial performance

N/A

Net surplus

-

-

-

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

N/A

Revenue Crown

2,600

3,300

2,800

N/A

Total expenses

2,600

3,300

2,800

The initial cost of this output of $3.3 million was an estimate based on the Ministry’s previous activities under this heading. The review of policy advice revised the definition of Ministerial servicing as well and so the initial estimate was too high for the revised activities. The budget was adjusted during the year to be closer to the estimated actual cost.

Ministerial servicing – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Number of items of ministerial correspondence addressed by the Ministry.

608 for direct action, 1,149 for direct action including draft reply

1,400 for direct action, 1,700 for direct action including draft reply

New

Percentage of draft replies to ministerial correspondence completed within 10 working days.

76%

80%

New

Number of Official Information Act requests addressed by the Ministry.

80 requests to the Minister;
85 to the Ministry

80 requests to the Minister; 100 requests to the Ministry

New

Percentage of Official Information Act requests replied to within statutory timeframes.

81%

100%

New

Characteristics (refer to Conditions on use of Appropriation) as determined through delivery recorded against the ministerial servicing item.

Not reported against1

100%

 1 The Ministry completes covering pages to evidence these characteristics have been met, however, these pages are not retained and therefore this measure cannot be reported against.

Output: Clifford Bay ferry terminal – facilitation of procurement

Clifford Bay ferry terminal – facilitation of procurement – financial performance

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

-

Revenue Crown

1,157

-

1,300

-

Total expenses

1,157

-

1,300

-

Net surplus

-

-

-

The costs above are those for seven months, as the output was created from 1 December 2012, following the Cabinet decision to request further work on the proposal.

Clifford Bay ferry terminal facilitation of procurement – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Report on an agreed basis to the responsible Minister and Cabinet on the Clifford Bay detailed project assessment.

100%

100%

Clifford Bay ferry terminal – Ministry outcomes and impacts

Ministry intermediate outcome:

Improved planning and investment in infrastructure and services

Impact 5: The Ministry provides good investment advice (in the national interest)

In the first quarter of 2012/13, the Ministry of Transport provided to the Minister of Transport the preliminary business case for developing a ferry terminal at Clifford Bay. The conclusions of this work were found to be strong enough to justify further testing of the commercial viability of the project. The Ministry will provide the Minister with a report on the commercial viability of the project in late 2013.

Output: Governance and performance advice on Crown agencies

This output is for monitoring of and advice on the governance, performance and capability of transport Crown agencies.

Governance and performance advice on Crown agencies – financial performance

N/A

Net surplus

-

-

-

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

N/A

Revenue Crown

563

900

600

N/A

Total expenses

563

900

600

The cost of this output was lower than initially forecast due to staff vacancies.

Governance and performance advice on Crown agencies – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Advice on transport Crown entity board appointments provided to
agreed timeframes.

Achieved

Achieved

Twice yearly1

Regularity of Ministry strategic discussions with each Crown entity
Chair / Board.

Twice yearly

Twice yearly

New

Percentage of Crown entity performance-related papers submitted to the annual survey of quality by NZIER that receive a score of 7.5 out of 10 or more.

One paper was reviewed. It was scored 7.0

90%

New

Date to complete review of the Ministry’s approach to assessing and assuring performance of transport Crown entities

31 December 2012

31 December 2012

 1 This performance measure was part of the output class Governance and Performance Advice for Crown Agencies in 2011/12.

Governance and performance advice on Crown agencies – Ministry outcomes and impacts

Ministry intermediate outcome:

Improved government transport agencies’ performance

Impact 8: Ongoing assurance on the performance of government transport agencies

 

Facilitate improved governance, accountability and performance in transport Crown agencies

During 2012/13, the Ministry reviewed and tested the operating model for its governance function to determine what excellence looks like. The Ministry is currently considering options to improve related performance, engagement and delivery.

We advised the government on the appointment of several board members for the transport Crown agencies, including the reappointment of a number of chairs and deputy chairs.

The Ministry engaged with transport Crown agencies on how they contribute to a common transport sector outcomes framework. A high level description of these contributions and the framework are reflected in these agencies’ statements of intent for 2013-16.

The Ministry continued to develop its work on reviewing agency value for money and business models. The Ministry has initiated a project, to be completed in 2013/14, to improve the scheduling and quality of funding reviews. The Ministry is also participating in a fundamental review of the business and funding models for the Aviation Security Service, which is part of
the Civil Aviation Authority.

The Ministry prepared ministerial letters of expectations for the boards and advised on Crown agencies’ final draft statements of intent, which led to further improvements from previous years.

Output class: Fuel excise duty refund administration

Through this output class, the Secretary for Transport (Chief Executive) delegates to, and contracts with, the NZ Transport Agency to provide an administrative and accounting service for the refund of fuel excise duty (FED).

Fuel excise duty refund administration – financial performance

 -

Net surplus

-

 -

 -

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

-

Revenue Crown

429

429

429

429

Revenue from fees

-

-

-

429

Total revenue

429

429

429

429

Total expenses

429

429

429

This activity has previously been funded from fee income from other activities.  No fee is actually charged on FED refunds.  As part of the review of the RUC regime, Cabinet agreed that these costs were to be met in future from the National Land Transport Fund, but in the interim the Crown would meet the cost. Thus the revenue for this output class has been re-categorised as Revenue Crown for 2012/13.

Fuel excise duty refund administration – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

New

Average number of days taken to audit, process and pay FED refunds

11 days

10 days

Output class: Milford Sound/Piopiotahi aerodrome operation and administration

This output class covers the operation of the Milford Sound/Piopiotahi Aerodrome to provide a safe and efficient
aerodrome operation.

Milford Sound/Piopiotahi Aerodrome operation and administration – financial performance

(38)

Net deficit

(11)

-

-

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

216

Other revenue

240

223

255

254

Total expenses

251

223

255

This result is an improvement from recent years following an increase in landing fees during 2011/12.

Milford Sound/Piopiotahi Aerodrome operation and administration – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

100%

The aerodrome operation will conform with appropriate Civil Aviation Authority safety requirements

100%

100%

$253,661

Operating costs within third-party revenue

$251,491

$223,000

To inform future decisions about the aerodrome, the Ministry engaged a contractor to conduct an Aeronautical Study of the Milford Aerodrome. The study considered the aerodrome’s hazards, risks and mitigations to those risks.

The Ministry completed and distributed for consultation with stakeholders, the Specification and Method of Works Plan to accompany a request for tenders for the clearance of the vegetation at the aerodrome.

In June 2013, the Ministry reached an agreement with a contractor on a long-standing dispute over rectification work required after the reseal of the aerodrome runway in 2009/10.

Output class: search and rescue Activity Coordination PLA1

Through this output class, the Ministry houses the secretariat function of the New Zealand Search and Rescue Council which administers the search and rescue sector in New Zealand.

Search and rescue activity coordination PLA – financial performance

Actual
2011/12
$000

 

Actual
2012/13
$000

Main
Estimates
2012/13
$000

Supplementary
Estimates
2012/13
$000

1,113

Revenue Crown

1,135

1,136

1,136

1,113

Total expenses

1,135

1,136

1,136

-

Net surplus

-

-

-

 1 PLA – Permanent Legislative Authority

Search and rescue activity coordination PLA – performance measures

Actual
2011/12

Performance measures

Actual
2012/13

Standards/
Targets
2012/13

100%

Provision of:

  • effective leadership and strategic coordination to the New Zealand search and rescue sector
  • effective support services and policy advice
  • to the satisfaction of the New Zealand Search and Rescue (NZSAR) Council.

100%

90%

New

Provision of support services and policy advice to the NZ Search and Rescue Council, and effective leadership and strategic coordination to the wider New Zealand search and rescue sector.

100%

95%

The New Zealand Search and Rescue (NZSAR) Secretariat provides the NZSAR Council with support services, policy advice and the implementation of agreed measures in order to give effective leadership and strategic coordination to the New Zealand search and rescue sector. The secretariat also implements the national search and rescue (SAR) support programme.

Approved and monitored by the NZSAR Council, the programme provides an array of high value activities in support of SAR organisations throughout New Zealand that contribute directly towards NZSAR Council goals of: enhancing the effectiveness and efficiency of New Zealand’s SAR sector; achieving a culture of ‘one SAR Body’; promoting continuous improvement; maximising the potential of SAR people and supporting SAR preventative strategies.

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