Non-financial performance continued - Annual Report 2008/09

Output: Ministerial Services

This output involves the provision of advice to the Minister(s) on issues arising across all modes of transport, draft responses to Ministerial correspondence and Parliamentary questions, speech drafts, development of legislation (Acts and regulations) and other services.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Achieved	Legislation development and issuing of drafting instructions as agreed with the Minister(s) for the relevant calendar year.	Achieved	Achieved
2,245	Quantity Number of draft Ministerial letters	3,481	1,300 - 1,600
78.8%	Timeliness  Percentage of draft Ministerials completed within 20 working days of receipt by the Ministry, unless specified as urgent.	75%	≥95%
$6,564,993	Cost The output is produced within appropriation (GST exclusive)	$5,770,486	$5,048,000

Commentary on Performance
Ministerials have been centralised into the Official Correspondence Unit, which has increased the efficiency of Ministerial replies. In the next financial year, we will be moving to a new correspondence tracking system, which will provide more detailed information.

Output: Rules Management

This output provides for management of the transport rules and related regulations development process. It involves accepting the need for a rule, supporting the Minister in getting rules approved by Cabinet and facilitating signing of the rule, and any associated regulation, into law. It also includes negotiating and managing the annual programme and agreements for rules development services by the transport Crown entities.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
51%	Rules and regulations are developed as specified in the agreed annual Rules Programme.	Partially achieved	Priority work as detailed in the work programme
$3,938,010	Cost The output is produced within appropriation (GST exclusive)	$4,058,725	$3,910,000

Commentary on Performance
The increased cost above the standard reflects an extra $0.22 million paid to the Crown entities for additional work, offset by the Ministry’s efforts to contain costs in the current economic climate.

The General Election in late 2008 interrupted progress on several rules, which affected the ability of the Ministry and the transport Crown entities to meet the expected delivery of some final rules. This had been anticipated, and the expected dates for final rules were indicative only.

A number of rules approved for the 2008/09 programme will be carried over to the 2009/10 programme, including rules that have timelines extending beyond a single year, and there were several rules that were delayed by the election.

The following rules were completed:

Aviation Rules

• Part 95 – Instrument Flight Procedures – Registration
• Part 173 – Instrument Flight Procedure Service Organisation – Certification and Operation
• Part 109 – Regulated Air Cargo Agent – Certification

Maritime Rules

• Maritime Rules Omnibus 2008, Part 132 (dispersant use in marine oil spills)
• Maritime Rules Omnibus 2008, Part 130C (regional oil spill contingency plans)

Marine Protection Rules

• Omnibus marine protection amendment rules – MARPOL Annex 1
• Omnibus marine protection amendment rules – MARPOL Annex V

Land Transport Rules

• Land Transport Omnibus Amendment Rule 2008
• Land Transport Fuel Consumption Rule 2008
• Land Transport Vehicle Emissions Amendment Rule 2008
• Land Transport Operator Licensing Amendment Rule 2009

OUTPUT CLASS: POLICY ADVICE - FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08		Actual 2008/09	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
31,151 602	Revenue Crown Other revenue	27,817 540	31,017 270	30,590 490
31,753	Total revenue	28,357	31,287	31,080
30,473	Total expenses	28,078	31,287	31,080
1,280	Net surplus	279	-	-

 

Output Class: Sector Leadership and Support

Through this output class, the Ministry provides strategic leadership across the government transport sector. This enables transport Crown entities and other relevant agencies to align their strategic direction so that they may better contribute to the objectives of the transport government.

It also includes monitoring of, and advice to the Minister on, management of the Crown’s ownership and/or purchase interest in the transport sector Crown entities and other organisations.

The services provided will contribute to all the other sector outcomes and towards ensuring that the government transport sector is efficient and effective.

This output class is supported by two outputs: transport leadership and direction setting, and ownership and purchase monitoring.


Output: Transport Leadership and Direction Setting

This output focuses on the Ministry’s role of providing strategic transport leadership and overall direction.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
New	Programme to support implementation of the updated New Zealand Transport Strategy is developed and implemented following the release of the Strategy, in accordance with agreed timeframes*.	Partially achieved	Achieved
$694,044	Cost The output is produced within appropriation (GST exclusive)	$2,168,695	$2,498,287

*The new government required a programme to develop and implement its priorities for transport, and this has become the focus of the Ministry since the general election.

Commentary on Performance
The New Zealand Transport Strategy 2008 (NZTS) was published in August 2008, and provided a clear statement of the previous government’s direction for transport over a 30 year period to 2040.  It was relatively well-received by the sector.  The first Government Policy Statement on Land Transport Funding (GPS) was published at the same time.  This gave effect to the NZTS in the area of land transport funding over the short to medium term.  There was an extensive communication process to ensure the two documents were well understood by the sector.

The new government elected in November 2008 supports the overall intent of the NZTS but decided that the GPS should be amended to better reflect its priorities over the short to medium term ie economic growth and productivity.  The Minister of Transport instructed the Ministry of Transport to develop a revised GPS. This was delivered in May 2009.

In summary, performance in this output class has focused on responding to the new government’s priorities and developing the relevant leadership documents, rather than specifically delivering the tasks anticipated at the start of the year.

The objectives of the NZTS are as follows.

Objective 1: Assisting economic development
Objective 2: Improving access and mobility
Objective 3: Assisting safety and personal security
Objective 4: Protecting and promoting public health
Objective 5: Ensuring environmental sustainability

ALL OBJECTIVES

Intervention	Actions as set out in the Statement of Intent 2008-2011	Actual performance comments 2008/09
Implement the updated New Zealand Transport Strategy (NZTS)	Standards/targets 2008/09: Support and monitor progress of the implementation of the updated NZTS. Ensure that the direction of the updated NZTS is known and understood by key stakeholders. Undertake Ministry specific actions from the strategy.	Actions achieved 2008/09: Partial achievement. Since November 2008, the Ministry has focused on implementing the new government’s priorities for transport by way of the GPS, where these have differed from those in the NZTS.

OBJECTIVE 1: ASSISTING ECONOMIC DEVELOPMENT

Intervention	Actions as set out in the Statement of Intent 2008-2011	Actual performance comments 2008/09
Land Transport Government Policy Statement  development	Standards/targets 2008/09: Support and monitor the implementation of the first GPS. Ensure that the direction of the GPS is known, understood and actioned. Begin preparation for the second GPS.	Actions achieved 2008/09: The new government required an amended GPS to better align with its priorities for land transport funding. The Ministry spent a significant part of the year in developing a new GPS (published in May 2009) and then communicating this to the transport sector. There was a particular focus on discussion with the NZ Transport Agency to ensure the 2009-2012 National Land Transport Programme (published in August 2009) gives effect to the new GPS.

Output: Ownership and Purchase Monitoring

This output involves monitoring transport Crown entities’ ongoing capability and performance in contributing to the objectives of the NZTS, relevant government policy and each Crown entity’s statutory mandate. It also involves providing advice to the Minister and Crown entities on where improvements can be made. In addition, it supports the Minister in the selection, appointment, education and performance review of Crown entity boards.

The Ministry is developing a Monitoring Plan to assist and improve the description and delivery of this output. This Monitoring Plan is intended to clarify the various monitoring responsibilities within the Ministry. It will also establish the Ministry’s monitoring priorities for each of the transport sector Crown entities, and identify the related capability development needed within both the Ministry and the Crown entities.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Not applicable	Ownership and purchase monitoring activities undertaken and completed as specified in the Ministry’s Monitoring Plan.	Achieved	100%
$1,348,845	Cost The output is produced within appropriation (GST exclusive)	$1,347,966	$1,601,713

Commentary on Performance
The Ministry developed draft monitoring plans for each Crown agency and other key areas of work, rather than an overall Monitoring Plan (eg information technology projects).  These plans identified key issues and were used to inform engagement with Crown entities. The Ministry is now working to develop them into plans of action.

The Ministry of Transport’s Responsibilities under Section 101
Section 101 of the Land Transport Management Act 2003 introduced a new responsibility for the Secretary of Transport to ‘monitor and review specified activities and procedures…for the purpose of evaluating the performance of the land transport funding and planning system.’

The new funding and planning system came into force in 2008/09. Given this, and the fact that the NZ Transport Agency also only came into existence from 1 August 2008, specific reviews would have been premature. The focus was therefore on determining the way in which the Ministry will discharge this responsibility. The Ministry has carefully considered the approach to ensure that effort is not duplicated, and that the monitoring and review process is cost effective. The Ministry and the NZ Transport Agency have agreed that the Secretary will sit on the Agency’s Audit Committee, have input into their programme, and will utilise the results of the Agency’s internal auditors to fulfil this role. Audit New Zealand will provide assurance that this work is performed independently and can be relied upon. The Secretary may undertake additional work if necessary to fulfil the section 101 requirements.

OBJECTIVE 1: ASSISTING ECONOMIC DEVELOPMENT

Intervention	Actions	Performance Comments 2008/09
Implement section 101 Land Transport Management Act 2003 – Secretary for Transport monitors and reviews specified activities and procedures	NEW Undertake monitoring and review of specified activities and procedures in accordance with section 101 of the LTMA.	Actions achieved 2008/09: Developed a monitoring and review process in conjunction with the NZ Transport Agency as described below.

The Ministry’s other key achievements during the period include:

• developing new ministerial Letters of Expectations, with a focus on performance frameworks and value for money
• facilitating improved transparency and performance information in the entities’ Statements of Intent for 2009-12
• liaising closely with the NZ Transport Agency as it produced Statements of Intent for 2008-11 and 2009-12. This included considerable joint effort to improve the transparency of the entity’s financial information
• continuing implementation, with the NZ Transport Agency, of  accountability elements of the Land Transport Management Amendment Act 2008, including the first annual report on the NLTF under section 11 of the Act
• advising the Minister and Crown entities on revenue and expenditure pressures in light of the economic downturn.

OUTPUT CLASS: SECTOR LEADERSHIP AND SUPPORT – FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
1,785  -	Revenue Crown Other revenue	3,517 -	2,100 -	4,100 -
1,785	Total revenue	3,517	2,100	4,100
2,043	Total expenses	3,517	2,100	4,100
(258)	Net surplus/(deficit)	-	-	-

 

Output Class: Airport Operation and Administration

This output class covers the operation of Milford Sound/Piopiotahi Aerodrome to provide a safe and efficient airport operation that contributes to the achievement of NZTS objectives. The output class contributes to the sector outcome of ‘growth and development are increasingly integrated with transport’.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
100%	The airport will conform with Civil Aviation Authority safety requirements	100%	100%
$121,000	Cost Operation within third party revenue (GST exclusive)	$157,000	$160,000

OUTPUT CLASS: AIRPORT OPERATION AND ADMINISTRATION – FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
-  101	Revenue Crown Other revenue	- 73	- 200	- 160
101	Total revenue	73	200	160
121	Total expenses	157	200	160
(20)	Net surplus/(deficit)	(84)	-	-

Commentary on Performance
The Ministry works closely with the Airways Corporation, the Civil Aviation Authority (CAA) and the Queenstown-Milford User Group to ensure safe operations. The aerodrome complies with CAA physical standards, even though certification is not required. There were no reported aircraft incidents attributable to the physical condition of the aerodrome during the year.

The Ministry commenced a planned reseal of the aerodrome movement areas and helipad improvements in February 2009.  However, the early onset of colder temperatures, after the parking apron and taxiway were completed, forced the postponement of runway resealing until next spring.  A review of landing fees is also planned for 2009/10 to address the recovery of costs.

Output Class: Distress Radio Beacons National Education Campaign

This output class provides for the development and implementation of a four-year national education campaign to inform owners and users of 121.5 MHz frequency distress beacons that they became redundant when changes to the global satellite receiving system came into effect on 1 February 2009. Users will have to upgrade to a beacon transmitting on the 406MHz frequency.

The campaign also promotes the ownership and appropriate use of distress radio beacons in the areas covered by New Zealand search and rescue services. This output class contributes to the sector outcome of ‘increasing the safety and security of New Zealand’s transport system’.

Actual 2007/08	Peformance measures	Actual 2008/09	Standards/targets 2008/09
Not applicable.  Survey to be undertaken in 2009	Quality Percentage of 121.5 MHz distress beacon owners who are made aware that, in 2009, monitoring will cease and an upgrade to 406 MHz will be required (as determined by independent survey)	94%	≥ 75 %
$192,000	Cost The output is produced within appropriation (GST exclusive)	$238,000	$243,000

Commentary on Performance
The distress radio beacons national education campaign is now complete.  In the last year of this four year campaign, new material was developed and significant advertising placements made during spring and summer in the lead up to the 1 February 2009 change.

OUTPUT CLASS: DISTRESS RADIO BEACONS NATIONAL EDUCATION CAMPAIGN – FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09  $000
192 -	Crown Revenue Other revenue	238 -	243 -	243 -
192	Total revenue	238	243	243
192	Total expenses	238	243	243
-	Net Surplus	-	-	-

 

Output Class: Next Steps Review Implementation

This output class provides for the implementation of the Next Steps in the Transport Sector Review (Next Steps).

The Next Steps Review as set out by the State Services Commission in April 2007 was completed by March 2009.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Not applicable*	Accountability framework is in place within the agreed timeframe, after the legislation is in place.	Partially achieved – see comment under output Ownership and Purchase Monitoring	Achieved
Not applicable*	Monitoring and review processes are in place within the agreed timeframe, after the legislation is in place.	Partially achieved – see comment on section 101 LTMA	Achieved
Not applicable*	Expenditure management processes are in place within the agreed timeframe, after the legislation is in place	Partially achieved	Achieved
Not applicable*	Support provided to the NZ Transport Agency and local authorities to implement Next Steps in accordance with the monitoring framework to be developed by 31 July 2008.	Achieved	Achieved
$2,743,089	Cost The output is produced within appropriation (GST exclusive)	$401,264	$440,000

*The legislation did not take effect until 1 August 2008.

Commentary on Performance
Support was provided to the NZ Transport Agency and local authorities to implement Next Steps by providing assistance to Regional Transport Committees and NZ Transport Agency general managers, as well as producing a ‘KnowHow’ publication.

The Ministry led a major exercise in effective implementation of the Land Transport Management Amendment Act 2008, with key transport stakeholders responsible for transport planning and programming under this legislation.

As the implementation progressed, the activities undertaken under this output class were deemed business as usual, and will not be reported as a separate output class in 2009/10. This began to happen during 2008/09, as is demonstrated by the fall in cost between 2007/08 and 2008/09.

OBJECTIVE 1: ASSISTING ECONOMIC DEVELOPMENT

Intervention	Actions as set out in the Statement of Intent 2008-2011	Performance Comments 2008/09
Implement the Next Steps Review	Standards/targets 2008/09: Ensure a smooth transition to the NZ Transport Agency and to the new funding and planning system. Establish and implement monitoring and review processes, as set out in the legislation for the National Land Transport Programme (NLTP) and its expenditure. Implement the accountability regime for the NZ Transport Agency.	Actions achieved 2008/09: After the Land Transport Management Amendment Act 2008 was passed, the Ministry worked closely with the NZ Transport Agency for the first six months on several information sessions, training workshops and providing advice to Regional Partnership Managers on the legislation, and the new funding and planning system. See comments on output Ownership and Purchase Monitoring, and section 101. See comments on output Ownership and Purchase Monitoring.

OUTPUT CLASS: NEXT STEPS REVIEW IMPLEMENTATION FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
2,100  300	Revenue Crown  Other revenue	365 36	400 -	404 36
2,400	Total revenue	401	400	440
2,743	Total expenses	401	400	440
(343)	Net surplus/(deficit)	-	-	-

 

Output Classes related to the Motor Vehicle Register and its Related Activities

From 1 August 2008, the ownership of the Motor Vehicle Register and the legislative responsibility for the Registrar of Motor Vehicles functions transferred from the Ministry of Transport to the new Crown entity, the NZ Transport Agency.

This necessitated a change in the Ministry’s output classes from 1 August 2008.  The Motor Vehicle Register and Revenue Management output class was disestablished and three new departmental output classes and one non-departmental output class were established. The changes were not reflected in the Main Estimates as they had not been finalised at that time. 

• New departmental output classes
  – land transport revenue forecasting and strategy
  – road user charges collection investigation and enforcement
  – refund of fuel excise duty
• New non-departmental output class
  – motor vehicle registry

The four departmental output classes are reported on the following pages, and the non-departmental one in the Crown section of this annual report.

Output Class: Motor Vehicle Register and Revenue Management

Through this output class, the Ministry contracted with the NZ Transport Agency’s predecessor agency, Land Transport New Zealand, to provide an administrative and accounting service for the collection and refund of motor vehicle registration and licensing (MVR) fees; road user charges (RUC) for distance, weight and time licences; and fuel excise duty (FED).  Most of this revenue is then paid into the National Land Transport Fund (NLTF). 

Other services provided include investigation and auditing activities to identify instances of RUC evasion and the maintenance of an information database (the Motor Vehicle Register) for use by law enforcement agencies, industry groups, and the public.

As noted above, this output class existed only for the first month of 2008/09.

This output class contributes to the transport sector outcome of improving sector effectiveness and efficiency, and it involved the collection of Crown revenues of around $2.4 billion per annum.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
8.17 million 88.2% 98.4%	Motor vehicle register (MVR) transactions. MVR licensing compliance (proportion of licensed vehicles in the MVR) MVR revenue compliance (proportion of vehicles re-licensed within 12 months of license expiry).	0.649 million 86.5 98.6%	8,264 million ≥88% ≥98%
$66,966,216	Cost The output is produced within appropriation (GST exclusive)	$5,197,000	$5,197,000

OUTPUT CLASS: MOTOR VEHICLE REGISTER AND REVENUE MANAGEMENT – FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2007/08 $000	Supplementary Estimates 2007/08 $000
56,176 13,790	Crown Revenue Other revenue	4,181  1,016	54,764 12,296	4,181 1,016
69,966	Total revenue	5,197	67,060	5,197
66,967	Total expenses	5,197	67,060	5,197
2,999	Net surplus	-	-	-

 

Output Class: Land Transport Revenue Forecasting and Strategy

Through this output class, the Ministry provides land transport revenue forecasting and strategy advice.

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Not applicable	Revenue forecasts are completed as required.	100%	100%
Not applicable	Revenue system improvements developed and implemented as agreed, in accordance with agreed timeframes.	100%	100%
Not applicable	Cost The output is produced within appropriation (GST exclusive)	$1,910,686	$1,716,000

Commentary on Performance
In July 2008, the government commissioned an independent Road User Charges Review Group. Under this output class, the Ministry provided significant support to the work of this group over the course of 2008/09.  The Review Group reported to the Minister of Transport on 31 March 2009 setting out 33 recommendations relating to the transport revenue system.  Following the completion of the Review Group report, the Ministry has provided further advice to the Minister about the recommendations.

The Ministry has incurred unappropriated expenditure in this output class due to the work required for the Review Group that could not be deferred. The NZ Transport Agency contributed $0.8 million to the costs of the review.

OUTPUT CLASS: LAND TRANSPORT REVENUE FORECASTING AND STRATEGY FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
-  -	Crown Revenue Other revenue	916 800	-	916 800
-	Total revenue	1,716	-	1,716
-	Total expenses	1,911	-	1,716
-	Net surplus/(deficit)	(195)	-	-

Output Class: Road User Charges Collection, Investigation and Enforcement

Through this output class, the Chief Executive delegates to, and contracts with, the NZ Transport Agency to provide an administrative and accounting service for the collection and refund of RUC, and the investigation and enforcement of RUC evasion. 

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Not applicable	Identified evasion revenue recovered.	65%	≥30%
Not applicable	Cost The output is produced within appropriation (GST exclusive)	$17,688,000	$17,688,000

Commentary on Performance
In the year to 30 June 2009, 7,692 audits were carried out. This compares to 5,599 audits conducted in the previous year – an increase of 37.4 percent.

OUTPUT CLASS: ROAD USER CHARGES COLLECTION, INVESTIGATION AND ENFORCEMENT FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
- -	Revenue Crown Other revenue	17,688	- -	17,688
-	Total revenue	17,688	-	17,688
-	Total expenses	17,688	-	17,688
-	Net surplus	-	-	-

Output Class: Refund of Fuel Excise Duty

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.  

Actual 2007/08	Performance Measures	Actual 2008/09	Standards/targets 2008/09
Not applicable	Proportion of revenue which is refunded	2.4%	≤3%
Not applicable	Cost The output is produced within appropriation (GST exclusive)	392,000	392,000

Commentary on Performance
Refund application volumes are 12 percent (1,698) below forecast for the year, however compared to actuals from the previous year, there was a 16 percent (3,585) increase in volumes.

OUTPUT CLASS: REFUND OF FUEL EXCISE DUTY FINANCIAL PERFORMANCE (AMOUNTS ARE GST EXCLUSIVE)

Actual 2007/08 $000		Actual 2008/09 $000	Main Estimates 2008/09 $000	Supplementary Estimates 2008/09 $000
- -	Revenue Crown Other revenue	392 -	- -	392 -
-	Total revenue	392	-	392
-	Total expenses	392	-	392
-	Net surplus/(deficit)	-	-	-

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