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Output: Aviation

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New International air transport policies reviewed to identify economic implications, and recommendations on amendments made to the government by 30 June 2011. Not achieved Achieved
New Civial Aviation Amendment Bill passed by 30 December 2010. Achieved Achieved
New Cost
This output is produced within appropriation (GST exclusive).
$3,480,464 $3,928,000

During 2010/11 an amended time frame of December 2012 was agreed by the Minister for the International Air Transport Policy Review.

2010/11 Planned actionsDeliverables
Maintain and improve international air traffic rights.

Deliverable

Review of international air transport policies to identify economic implications and opportunities.

Impact sought

Increased number of air traffic rights available to New Zealand to support international passengers and freight links.

Initiatives

International air transport policy review: The timing of the review was extended and it is now scheduled to be completed by December 2012. The review is examining the benefits and risks to New Zealand from differing liberalisation options, including whether, and how, particular regard should be had for the interests of New Zealand airlines.

International air services: The government agreed to the commencement of air services negotiations with a number of Asian and South American countries. The Ministry commenced preliminary work to advance these on a bi-lateral or, where possible, multi-lateral basis.

The Ministry reached an understanding with the Netherlands to amend arrangements with respect to code sharing. Preparations also commenced for air services negotiations with Brazil and China.

Four new airlines (Air Asia X, China Southern Airlines, Jetstar Asia and China Airlines) were licensed to operate to New Zealand. Between them, these airlines are already offering 4,280 seats a week into New Zealand (plus additional freight capacity) with the ability, and in the case of China Southern the announced intention, to increase this.

Improve the economic efficiency of international air services linkages and air line operators.

Deliverable

Civil Aviation (Cape Town Convention and other matters) Amendment Bill to be passed during 2010.

Impact sought

Increase competitiveness of international airline operators.

Initiative

Civil Aviation (Cape Town Convention and Other Matters) Amendment Bill: In July 2010, New Zealand acceded to the Convention on International Interests in Mobile Equipment (the Cape Town Convention) and the Protocol to the Convention on International Interests in Mobile Equipment on Matters Specific to Aircraft Equipment (Aircraft Protocol). New Zealand's accession to the Cape Town Convention and Aircraft Protocol supports an international system to protect commercial security interests in mobile aircraft equipment. From November 2010, this has provided the opportunity for New Zealand aircraft operators to secure commercial advantages from savings in funding and transaction costs in future aircraft acquisitions.

Manage and monitor the Crown funding and interests in charging capital expenditure initiatives at joint venture airports.

Deliverable

Maintenance of effective management and monitoring mechanisms.

Impact sought

Increased value for money from Crown funding and capital expenditure for joint venture airports.

Initiative

Funding arrangements: The Ministry prepared a Budget bid for joint venture airports that will allow the Crown to continue to meet its legal obligations in respect of capital development and, if required, operating losses at joint venture airports.

Funding was also approved from the existing appropriation for capital development at Taupo, Wanganui and Whakatane Airports and operating losses at Wanganui Airport.

Implement measures to comply with international aviation safety, security and environmental standards.

Deliverables

Improvement of legislative and regulatory framework to enhance the safety and security of New Zealand's aviation system and comply with international standards.

Satisfactory results from International Civil Aviation Organization (ICAO) audits.

Impacts sought

Increased safety and security and decreased environmental impacts in the aviation sector.

Sustained access and ability to participate in the international aviation system.

Initiative

The Ministry led New Zealand's participation in the 37th Triennial Assembly of the ICAO in Montreal, and participated in an ICAO Aviation Security Asia-Pacific Directors-General of Civil Aviation Forum in Fiji.

The ICAO conducted a Universal Security Audit of New Zealand in May 2011, auditing compliance with ICAO Annex 17 (Security) and the security aspects of ICAO Annex 9 (Facilitation). The overall New Zealand results were very good.

The Ministry convened the 61st National Air Facilitation conference in Queenstown in November 2010. During the year, the principal facilitation activity continued to be participation in the Border Sector Governance Group at chief executive and senior official level, particularly in relation to the group's work on streamlining trans-Tasman air travel processes.

Ensure aviation policy and regulatory frameworks are flexible and responsive to change.

Deliverable

Reviews of specific aviation rules and regulations according to agreed programme.

Impact sought

Responsive and flexible policy and regulatory frameworks and effectively maintained.

Initiative

Civil Aviation Rules: The Aviation Rule Part 121 - Extended Diversion Time Operations was completed during the year. Progress was made on the following proposed rules (which now form the 2011/12 rules programme):

  • Part 61 (Stage 2) - Pilot Licences and Ratings
  • Part 115 - Adventure Tourism Aviation
  • Part 121/125 - Training Requirements
  • Part 139 - Review
  • ICAO Safety Management
  • Part 137 - Agricultural Aircraft Operations
  • ICAO Equipment Compliance
  • Part 125 - Rule Update

In addition to the above deliverables that were outlined in the Ministry’s 2010–2013 Statement of Intent, the following initiatives arose or were undertaken during the year.

Air New Zealand–Virgin Blue Alliance

Air New Zealand and Virgin Blue applied for authorisation for a trans-Tasman alliance. This was a major project for the Ministry that required complex statutory and wider public interest analysis of the application, including taking into account the views expressed by third parties and the applicants.

At the same time, the Australian Competition and Consumer Commission undertook a similar analysis to determine the benefits of the alliance from an Australian perspective. The Ministry’s analysis established that authorisation would be consistent with the legislation, could bring benefits to consumers, would bring about cost savings and would allow Air New Zealand and Virgin Blue to compete more effectively with Qantas. The Minister authorised the trans-Tasman alliance on 21 December 2010 for a period of 3 years.

Civil Aviation Authority funding review

The Ministry worked with the Civil Aviation Authority on its funding and value-for-money reviews. These reviews identified the need for clearer long-term thinking on the shape of the organisation, and key decisions to enhance its capability to deliver its longer-term vision. The reviews also provided the Ministry with the opportunity to assess the efficiency and effectiveness of the Civil Aviation Authority and we have followed up with the Board to ensure they remain focused on the government’s strategic priorities.

We also advised the government on the appointment of a new Chair for the Civil Aviation Authority, and the funding required to lead the organisational changes identified in the value-for-money review.

Passenger security charges

The Ministry supported a review of the Aviation Security Service’s passenger security charges and provided advice to the government on changes to the charges. In May 2011, the government agreed that the passenger security charges be reduced for 2 years from $10.22 to $8.00 per departing international passenger, and from $4.45 to $3.70 per departing domestic passenger. The changes were effective from July 2011.

National Airspace Policy - National Airspace and Air Navigation Plan

During the fourth quarter, the Ministry and the Civil Aviation Authority initiated a project to work with the Airways Corporation and other stakeholders to develop a National Airspace Policy. This will guide the future design and designation of airspace regarding aviation and non-aviation impacts. This will lead to the development of a National Airspace and Air Navigation Plan. This Plan will incorporate Performance-based Navigation Systems (PBN) to improve the safety and efficiency of air navigation.

Output: Maritime

 

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New Marine Safety Charge (Cruise Vessels) reviewed, and amended if necessary, by 31 October 2010. Achieved Achieved
New Drafting instructions on the Maritime Transport Amendment Bill issued to Parliamentary Counsel Office by 30 December 2010. Achieved Achieved
New Cost
This output is produced within appropriation (GST exclusive).
$2,103,367 $2,302,000
2010/11 Planned actionsDeliverables
Implement measures to comply with international maritime safety, security and environmental standards.

Deliverable

Amendment to Maritime Transport Act and other regulations in line with international requirements.

Impacts sought

Increased safety and security and decreased environmental impacts in the maritime sector.

Sustained ability to participate in the international maritime system.

Initiative

Maritime Transport Amendment Bill: The Ministry advised the government on the policy issues for the Bill which will implement marine environment protection and liability conventions, and improve port and harbour safety control. Drafting instructions were issued to the Parliamentary Counsel Office and the Bill is now expected to be introduced to Parliament in the first half of 2012.

Ensure maritime policy and regulatory frameworks are flexible and responsive to change.

Deliverable

Reviews of specific maritime rules and regulations according to agreed programme.

Impact sought

Responsive and flexible policy and regulatory frameworks are effectively maintained.

Initiative

Maritime and Marine Protection Rules: All maritime rules in the 2010/11 rules programme were completed on time. The Ministry engaged with Maritime New Zealand to improve the process for rules development and to set the rules programme for the 2011/12 year.

The following rules were completed during the year:

  • Part 91 - Navigation Safety Rules
  • Part 90 - Pilotage
  • Part 81- Rafting
  • Marine Protection (Various Amendments) Rule
  • Part 34 - Medical Standards
  • Part 21 - Safe Ship Management Fast Track Amendment
  • Maritime omnibus amendment rules

In addition to the above deliverables that were outlined in the Ministry’s 2010–2013 Statement of Intent, the following initiatives arose or were undertaken during the year.

Maritime New Zealand review

The Ministry and Maritime New Zealand worked on a joint project (the Maritime New Zealand Review) with the purpose of conducting a value-for-money review and a funding review, which included a full review of the industry levy: the Marine Safety Charge.

The Ministry, Maritime New Zealand and the Treasury sought to ensure that the value-for-money review undertaken by Ernst & Young adequately informed the subsequent funding review. The review has identified the need for clearer long-term thinking on the shape of Maritime New Zealand, and key decisions to enhance its capability. Any changes to funding arrangements are expected to be implemented by June 2012.

Clifford Bay ferry terminal

The Ministry worked closely with the Treasury and the NZTA on an initial analysis of the national economic costs, benefits and financial viability of the proposed Clifford Bay ferry terminal. The work on Clifford Bay is continuing in 2011/12.

Oil pollution levy

The Ministry worked with Maritime New Zealand to develop a discussion document for consultation on the Oil Pollution Levy. This document proposed a change to the formula for collecting the Oil Pollution Levy from a gross-tonnage-of-the-vessel basis to a threat-based formula. The ministerial-appointed Oil Pollution Advisory Committee agreed to the new threat-based formula.

The Ministry also participated in a capability review for the Marine Pollution Response Service. This resulted in confirming the expenditure required by the Oil Pollution Fund to meet its oil pollution prevention strategy and international obligations. A new capital expenditure programme for the Oil Pollution Fund was proposed and agreed and incorporated into the Oil Pollution Fund’s 3-year revenue and expenditure budget.

Prosecutions

The Ministry continued to bring successful prosecutions for offending in the cable protection area. These prosecutions provide a deterrent against vessels illegally fishing or anchoring near cables and pipelines. The Ministry brought four prosecutions for breaches of the cable protection areas, all of which were successful.

Output: Multi-modal

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New Scenarios developed and a paper on the transport task 2030 presented to the Minister by 30 November 2010. Not achieved Achieved
New Cost
This output is produced within appropriation (GST exclusive).
$14,549,041 $11,009,000

The scenarios project was not completed as the Ministry reviewed the project during the year and determined that a revised approach would be more appropriate. Work will be undertaken in 2011/12 to improve the Ministry’s understanding of the key strategic issues for the transport sector and how governments can respond to these over time.

2010/11 Planned actionsDeliverables
Identify options to enhance the contribution of the freight sector to economic growth and productivity.

Deliverable

Development of a coordinated Ministry programme on freight, and recommendations to improve freight efficiency and effectiveness.

Impact sought

Increased efficiency of the supply chain that contributes positively to economic growth and productivity in New Zealand.

Initiatives

Freight work programme: Further work to develop the Freight Information Gathering System (FIGS) was undertaken. The aim of the FIGS is to collect multi-modal freight information based on the flow of cargo through ports. This will enable better informed policy development regarding freight issues. Five container ports are providing data to the FIGS and it is expected that all container ports will be participating by the end of 2011.

NZIER report on sea freight: The Ministry commissioned the NZIER to report on long term sea freight scenarios [PDF, 522 KB]. The report looked at three main issues being debated in the sector: hubbing New Zealand’s international container trade through Australia; the creation of two main container ports in New Zealand capable of taking larger ships; and fewer international shipping lines calling in New Zealand. The report found that all of these scenarios are marginally less beneficial compared with the natural market led evolution of the ports sector.

The report provides a broad-based economic analysis of the issues and served to inform the ongoing discussion in the freight sector regarding shipping services and ports.

Improve the Ministry’s understanding of the nature and scale of developments in transport supply and demand in the future, and identify opportunities to improve productivity, efficiency and performance.

Deliverable

Development of scenarios on the transport task 2030 and identification of options for policy development.

Impact sought

Increased transport productivity and enhanced contribution to economic growth and social wellbeing.

Initiatives

Better understanding the links between transport and the economy: This project was completed in July 2010. The project enhanced the Ministry’s understanding of wider economic benefits and their relevance to the appraisal of transport projects. This knowledge is important as the appraisal of wider economic benefits is becoming more common in New Zealand. The Ministry utilised its knowledge in the Auckland City Centre Rail Link Review.

Strategic issues and scenarios: This initiative was not completed as the Ministry reviewed the proposed project during the year and determined that it was a lower priority than other initiatives and that a revised approach would be more appropriate. Work will be undertaken in 2011/12 to improve the Ministry’s understanding of the key strategic issues for the transport sector and how governments can respond to these over time.

Provide strategic guidance to transport agencies, local government and the wider transport sector.

Deliverable

Provision of strategic guidance provided to the transport sector by mid-2011.

Impact sought

Long-term progress towards all four government outcomes.

Initiatives

Connecting New Zealand: The Ministry prepared Connecting New Zealand which the government released in August 2011. Connecting New Zealand provides stakeholders with a summary of the government’s policy direction for transport over the next decade. It sets out the government’s long-term outcomes for transport and will assist stakeholders to better understand how the government wants the transport system to develop, and enable stakeholders to consider this when they make their own transport decisions.

Headline performance indicators for government’s four long-term outcomes for transport: The Ministry developed six headline indicators for the government’s four long-term outcomes and will develop a further two headline indicators in 2011/12.

Implement policies and investigate options to increase transport energy efficiency and manage greenhouse gas emissions of all modes.

Deliverable

Implementation of policies and identification of options to improve energy efficiency in line with the New Zealand Energy Strategy, reduce emissions and increase the affordability of transport.

Impact sought

Increased energy efficiency and reduced greenhouse gas emissions in all transport modes.

Initiatives

The Ministry has progressed a number of initiatives that contribute to this programme. These include:

  • developing a new approach to road transport emission estimates for the New Zealand greenhouse gas inventory, as well as engaging with stakeholders on the 2007 Vehicle Exhaust Emissions Rule (which seeks to phase out vehicles that are old and cause high emissions)
  • implementation of the Safe and Fuel Efficient Driving New Zealand (SAFED NZ) scheme
  • development of the vehicle fleet emissions model to explore what will happen to the fleet age and size when many of the used imports in the light fleet that were manufactured in the mid 1990s are likely to be scrapped. This model is now being used to predict future road transport energy demand and support future policy proposals
Implement transport-related changes from reviewed governance legislation for Auckland.

Deliverable

Implementation of transport-related changes from reviewed governance legislation for Auckland.

Impact sought

Increased focus and continuity in decision making to deliver a transport network that supports Auckland’s growth and economic success.

Initiative

Auckland governance: Legislation implementing Auckland’s new governance arrangements, including the establishment of Auckland Transport as a statutory council-controlled organisation (CCO), was enacted at the end of the 2009/10 financial year. In 2010/11, the Ministry provided advice on regulations allocating assets between Auckland Council and Auckland Transport, and establishing other CCOs, including Auckland Council Investments Limited and the Waterfront Development Agency. Auckland Council and Auckland Transport commenced operation on 1 November 2010. No significant issues have been identified as a consequence of the implementation of the enabling legislation. The Ministry monitored the effectiveness of the new governance arrangements in Auckland over the balance of the year.

Contribute to work streams that aim to improve the interaction between urban planning and infrastructure decision making.

Deliverable

Provision of input and support to the Ministry for the Environment-led review of the Resource Management Act.

Impact sought

Increased integration of transport, land use and other infrastructure planning to contribute to the success of our cities.

Initiative

Resource Management Act II urban planning and related reforms: The Ministry provided transport policy advice on cross-government work to reform the Resource Management Act. This included advice on spatial planning and infrastructure. The Ministry also advised on the proposed Auckland spatial plan and encouraged the development of robust and achievable urban development targets in the spatial plan.

Implement policies and identify options to ensure that transport meets society’s wider needs.

Deliverable

Implementation of policies and identification of options to ensure that transport meets society’s wider needs.

Impact sought

An accessible, efficient and safe transport system that contributes positively to the nation’s economic, social and environmental wellbeing.

Initiatives

SuperGold card passenger transport concessions: To ensure the financial viability of the SuperGold card scheme, the Ministry advised on changes including:

  • reducing reimbursement rates from 75 to 65 percent for the remainder of financial years 2010/11 and 2011/12
  • removing the ability of councils to claim administration costs
  • reducing the NZTA’s administration budget
  • introducing a moratorium on major new services entering the scheme for 2010/11 and 2011/12

The Ministry worked to implement the changes and facilitated the process for regional councils and operators to amend their respective contracts.

The changes to the scheme reduced its overall cost so that it can be contained within the budget of $45 million for the 2010/11 and 2011/12 years, and therefore meet its objective of enhancing accessibility for older New Zealanders.

Disability action plan — Ministerial Disability Committee: The Ministry provided advice to the Ministerial Committee on Disability Issues on transport related activities, including contributing to implementing the United Nations Convention on the Rights of Persons with Disabilities to which New Zealand is a signatory. The Ministerial Committee has been focused on developing a Disability Action Plan to improve the lives of disabled people. Following the Canterbury earthquakes, the focus has shifted to the re-building of Christchurch, and achieving better accessibility for disabled people.

In addition to the above deliverables that were outlined in the Ministry’s 2010–2013 Statement of Intent, the following initiatives arose or were undertaken during the year.

Regulatory reform programme

The Ministry’s regulatory reform programme, initiated in late 2010, is cross-modal, responds to the government’s goals for better and less regulation, and is made up of initiatives concerned with potential short to long-term issues with the regulatory framework for transport.

The key purpose of the regulatory reform programme is to improve the way the transport sector performs its regulatory function. Transport regulation has a large impact on the economy and society. Poor regulation could place an unnecessary burden on businesses and therefore hinder the government achieving its priorities around both its economic priorities and its ambitions for improvements in the quality of regulation.

In addition, the Ministry and transport agencies have a duty to consider whether the regulatory system is fit for purpose and if not, what further opportunities might exist for improving regulatory outcomes. This involves thinking more broadly about what constitutes regulation and what outcomes the government and sector want from the regulatory system. The regulatory reform programme has three main elements.

  • Identifying any opportunities for reform that deliver substantial improvements to the transport regulatory system.
  • Business improvement initiatives, such as the transport rules re-design project.
  • Regulatory business as usual, such as the ongoing regulatory programming and delivery, and regulatory scanning.

Transport rules re-design

To address concerns over the delays in the delivery of the transport rules programme, the Ministry led the development of changes to the current transport rules development process that could be implemented by 1 July 2011 to make rule-making more efficient by:

  • increasing the speed of the process, while ensuring the quality of rule design
  • allowing closer alignment of new rules with government and regulatory reform priorities
  • being more responsive to the needs of the transport sector

The suite of rules proposed for 2011/12 is significantly smaller, and more achievable, than it was in 2010/11 (a 37 percent reduction in the number of rules).

Rugby World Cup 2011

The Ministry worked with the Ministry of Economic Development and the transport agencies to address key transport capacity and reliability risks identified for the Rugby World Cup 2011.

Ministerial servicing

Throughout the year the Ministry addressed 1,368 ministerials for draft reply and 1,659 for direct action, responded to 77 Official Information Act requests to the Minister, and prepared 57 papers for consideration by Cabinet on a range of transport policy issues.

Output class: Policy advice - financial performance

 

ActualActual 2010/11 $000Main Estimates 2010/11 $000Supplementary Estimates 2010/11 $000
27,199 Revenue Crown 29,425 29,432 29,432
- Revenue from fees - - -
726 Other revenue 659 350 652
27,925 Total revenue 30,084 29,782 30,084
27,769 Total expenses 30,084 29,782 30,084
156 Net surplus - - -

 

Commentary on performance

This output class was delivered on budget, with four of the five component outputs below budget, and one (multi-modal) being 31 percent over budget. The Ministry believes that these variances are in part due to the change to new outputs and that performance will be closer to budget in 2011/12.

Output class: Governance and performance advice and support

This output involves assessing and advising on the transport Crown entities’ ongoing capability and performance in contributing to the government’s objectives, relevant government policy and each Crown entity’s statutory mandate. It includes providing advice to transport Ministers and Crown entities on where improvements can be made. This output also supports the Minister in the selection, appointment and development of Crown entity and other transport agency boards.

 

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New Date by which advice on Crown entity strategic issues and expectations is provided to the Minister. Delivered on 4 February 2011 30 November 2010
New Regularity of Ministry strategic discussions with each Crown entity Chair/Board. Achieved Twice yearly
New Cost
This output is produced within appropriation (GST exclusive).
$1,741,914 $1,750,000

Operating intentions

Facilitate effective governance, performance and capability of transport Crown agencies.

Deliverables

Provision of clear expectations to, and regular engagement with, boards and Crown agencies.

Provision of timely and robust advice to the Minister on governance, performance and capability issues and options for improvement.

Impact sought

Increased value for money delivered by transport Crown agencies.

Initiative

Facilitate improved governance, accountability and performance in transport Crown agencies: The Ministry restructured its Governance and Accountability team in December 2010 to enable it to provide an enhanced level of advice to transport Crown entities and the government.

The Ministry advised the government on the appointment of a number of chairs/deputy chairs and board members of the transport Crown agencies. The Ministry worked with the Crown Ownership Monitoring Unit to utilise their database for our board appointments. This enabled the Ministry to lift the calibre of candidates considered for board appointments and led to a more efficient board appointment process. A reappointment of the Aviation Medical Convener was also made.

The Ministry facilitated early strategic discussions between ministers and agency boards. At the same time, the Ministry moved to engage at a more strategic level with agency chief executives and boards, which led to better information flows and to agencies having a better understanding of the government’s priorities. This, coupled with work reviewing value for money and business models for service delivery and funding reviews, has enhanced the Ministry’s understanding of the strategic direction and challenges for the agencies. In turn, this has informed our governance and accountability advice to ministers.

The Ministry prepared Ministerial letters of expectations for the boards and advised on agencies’ final draft Statements of Intent, which led to improvements from the previous year’s Statements of Intent.

The Ministry also advised on the Civil Aviation Authority’s organisational change proposal and the funding needed to support that initiative. The Ministry continued to work with the Civil Aviation Authority and the Office of the Auditor-General on a work programme to address the latter’s report on the Civil Aviation Authority’s progress with improving certification and surveillance.

 

Output class: Governance and performance advice and support - financial performance

 

Actual 2009/10 $000Actual 2010/11 $000Main Estimates 2010/11 $000Supplementary Estimates 2010/11 $000
- Revenue Crown 1,742 2,000 1,750
- Revenue from fees - - -
- Other revenue - - -
- Total revenue 1,742 2,000 1,750
- Total expenses 1,742 2,000 1,750
- Net surplus - - -

This output class was new in 2010/11 and so no financial comparative figures are provided.

Output class: Land transport revenue forecasting and strategy

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

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
100% Revenue forecasts are completed as required. Achieved 100%
100% Revenue system improvements developed and implemented as agreed, in accordance with agreed time frames. Achieved 100%
100% Fuel excise duty and road user charges levels adjusted as required, in accordance with agreed time frames. Achieved 100%
$1,615,218 Cost
This output is produced within appropriation (GST exclusive).
$1,488,241 $1,950,000

Operating intentions

Review regulation and legislation to improve transport outcomes while streamlining and simplifying processes and reducing compliance costs for transport users.

Deliverable

An amended Road User Charges Act to be passed before June 2011.

Impact sought

Simplified and streamlined planning and decision-making processes, along with reduced compliance costs.

Initiative

Road user charges: In July 2010, the government agreed to a number of changes to the road user charges system, and to the replacement of the Road User Charges Act and associated regulations. The Ministry prepared the Road User Charges Bill and this was reported back to the House of Representatives by the Select Committee in May 2011. The Bill is now expected to be passed in 2011/12.

In addition to the above deliverables that were outlined in the Ministry’s 2010–2013 Statement of Intent, the following initiatives arose or were undertaken during the year.

Cost allocation model (CAM)

The Ministry reviewed the CAM and implemented changes to improve its robustness and to better align it with the Ministry’s forecasting model. This is to ensure consistency in the advice we provide. The changes also future-proof the CAM from upcoming changes in the RUC system. The changes also simplify the presentation of the CAM to stakeholders and should enhance their understanding of the model.

Fuel excise duty

The Ministry advised the government on the deferral of a planned increase in fuel excise duty and RUC scheduled for 1 July 2011.

Revenue forecasting

The Ministry also ran two forecasts with the latest economic and revenue collection data to meet the Treasury's requirements for the Crown financial statements.

Output Class: Land Transport revenue forecasting and strategy — financial performance

 

Actual 2009/10Actual 2010/11 $000Main Estimates 2010/11 $000Supplementary Estimates 2010/11 $000
615 Revenue Crown 565 - 950
1,000 Revenue from fees 1,000 1,000 1,000
- Other revenue - - -
1,615 Total revenue 1,565 1,000 1,950
1,615 Total expenses 1,488 1,000 1,950
- Net surplus 77 - -

Commentary on performance

This output class is funded from the administration fees paid on road tax revenue. Due to work on the RUC review, the Ministry has incurred costs higher than the $1 million appropriation from fees but has met the increase by reprioritising its other activities.

Expenditure is below the appropriation due to delays in work on the Road User Charges Bill as noted above. Permission to carry forward up to $350,000 of revenue to 2011/12 has been received.

Output class: Road user charges collection, investigation and enforcement

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

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
40% Identified evasion revenue recovered 64.4% ≥30%
$17,344,000 Cost
This output is produced within appropriation (GST exclusive)
$17,344,000 $18,318,000

Commentary on performance

The NZTA identified $11.8 million of evaded RUC during the year. $7.6 million was recovered during the year (although this does not all relate to the $11.8 million, due to the time it takes to recover the debt).

Output Class: Road user charges collection, investigation and enforcement — financial performance

Actual 2009/10
$000
Actual 2010/11 $000Main Estimates 2010/11
$000
Supplementary Estimates 2010/11 $000
- Revenue Crown - - -
17,344 Revenue from fees 17,344 17,344 18,318
- Other revenue - - -
17,344 Total revenue 17,344 17,344 18,318
17,344 Total expenses 17,344 17,344 18,318
- Net surplus - - -

An additional $974,000 of funding was approved by Cabinet during the year to cover the costs of the implementation of the RUC review by the NZTA. Due to delays to the legislation, this funding was not spent in 2010/11 but permission has been received to carry it forward to 2011/12.

Output class: Refund of fuel excise duty

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

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New Percentage of refund applications that are audited, processed and paid within 20 working days 92.1% 85%
$429,000 Cost
This output is produced within appropriation (GST exclusive)
$429,000 $429,000

Commentary on performance

This measure has been revised from the previous year to provide a more accurate reflection of the operational nature of processing fuel excise duty refunds. Performance during the year exceeded the performance measure.

Output Class: Refund of fuel excise duty — financial performance

 

Actual 2009/10
$000
Actual 2010/11 $000Main Estimates 2010/11 $000Supplementary Estimates 2010/11 $000
- Revenue Crown - - -
429 Revenue from fees 429 429 429
- Other revenue - - -
429 Total revenue 429 429 429
429 Total expenses 429 429 429
- Net surplus - - -

Output class: Airport operation and administration

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

Actual 2009/10Performance measuresActual 2010/11Standards/Targets
2010/11
100% The aerodrome operation will conform with appropriate Civil Aviation Authority safety requirements. Achieved 100%
$240,120 Operating costs within third-party revenue (GST exclusive). $251,000 $200,000

Commentary on performance

During the 2010/11 year, the Milford Sound/Piopiotahi Aerodrome complied with the Civil Aviation Authority’s physical standards. Remedial resealing of the apron was completed at the contractor's expense with a 12-month maintenance and defect period to apply. There were no reported aircraft incidents attributable to the physical condition of the aerodrome during the year.

The aerodrome Health and Safety Policy and Manual was finalised following consultation with aerodrome stakeholders. While principally a matter for Ministry employees (although aerodrome visits are rare) the documents recognise that we have responsibilities under the Health and Safety in Employment Act and that the Airways Corporation, Milford Helicopters, and the other aircraft operators using the aerodrome also have employer responsibilities. The Health and Safety Policy sets out the aerodrome relationships and responsibilities of each employer.

Output Class: Airport operation and administration — financial performance

 

Actual 2009/10Actual 2010/11Main Estimates 2010/11 $000Supplementary Estimates 2010/11 $000
- Revenue Crown - - -
- Revenue from fees - - -
84 Other revenue 174 200 270
84 Total revenue 174 200 270
240 Total expenses 251 200 270
(156) Net deficit (77) - -

A review of the landing fees at the aerodrome was completed to take effect from 1 July 2010 with the intent that fee revenue would cover costs and improve the net result from that of 2009/10. However higher costs were incurred than expected during the year due to issues relating to the runway resealing that had been undertaken in 2009/10.

The appropriation was increased during the year to allow for the additional expenditure. The Ministry will meet the deficit from other surplus.

Output class: Search and rescue activity coordination PLA

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.

Actual 2009/10Performance measuresActual 2010/11Standards/Targets 2010/11
New 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% 100%
New Develop and monitor Service Level Agreements with key providers in the SAR Community. 100% 100%
New Maintain a comprehensive understanding of the location, scope, cost and effect of SAR activity within the New Zealand Search and Rescue Region and the size, nature and capabilities of the NZSAR sector. 100% 100%
New Deliver the national SAR support programme including:
  • air observer training.
  • SAR forums to enhance cooperation
  • support of significant SAREXs
  • coordinate joint SAR training
100% 100%
New Monitor, analyse and report on sector funding. 100% 100%
New Inform and support SAR preventative strategies, campaigns and actions. 100% 100%
New Cost
This output is produced within appropriation (GST exclusive).
$1,133,544 $1,136,000

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 which 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.

Output Class: Search and Rescue Activity Coordination PLA — financial performance

 

Actual 2009/10 $000Actual 2010/11
$000
Main Estimates 2010/11
$000
Supplementary Estimates 2010/11 $000
- Revenue Crown 1,134 - 1,136
- Revenue from fees - - -
- Other revenue - - -
- Total revenue 1,134 - 1,136
- Total expenses 1,134 - 1,136
- Net surplus - - -

Commentary on performance

During the year, the Ministers of Transport and Finance jointly approved, under section 9(1) of the Land Transport Management Act, new funding for search and rescue and recreational boating activities. Part of the funding was allocated to a departmental output class as the Ministry houses the Secretariat of the NZSAR Council. The funding represents the costs of the staff and the Secretariat functions as well as $511,000 for training which is managed by the Secretariat.



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