Financial Highlights
| | 2003/2004 Budget4 | 2003/2004
Estimated
Actual | 2004/2005 Forecast | Change between 2003/2004
Budget and 2004/2005 |
| | $000 | $000 | $000 | $000 | % change |
| Revenue: Crown | 53,776 | 53,410 | 53,838 | 62 | 0.1 |
| Revenue: Other | 52,380 | 51,184 | 42,133 | (10,247) | (19.5) |
| Output expenses | 102,462 | 102,096 | 104,857 | 2,395 | 2.3 |
| Net surplus | 3,694 | 2,498 | (8,886) | (12,580) | (340.6) |
| Taxpayers' Funds | 4,578 | 4,578 | 20,578 | 16,000 | 349.5 |
The most significant movements in budgets between 2003/2004 and 2004/2005 are explained below.
Revenue Crown (+$62,000)
The main drivers of the change are as follows:
Vote Economic, Industry and Regional Development (-$783,000)
- reduction due to one off funding provided in 2003/2004 for a stocktake to assess whether existing policy settings are maximising the contribution of infrastructure to sustainable development; and
- reduction in funding for policy advice on small business due to completion of one-off projects including the holding of a SME Summit in February 2004.
Vote Commerce (-$610,000)
- additional funding in 2004/2005 to undertake building policy functions within the Ministry of Economic Development; and
- strengthen resource investment in economic integration with Australia with the establishment of a presence in Canberra;
Offset by reductions for:
- one-off funding in 2003/2004 for the establishment of the proposed Charities Commission; and
- the transfer of IT Policy responsibilities to Vote Communications Policy Advice - Communications, from 2004/2005.
Vote Communications (+$1.085 Million)
- the transfer of IT Policy from Vote Commerce;
Offset by a reduction for:
- a reallocation of funding from Vote Communications to Vote Consumer Affairs to meet additional investment in policy advice and research in that Vote.
Vote Consumer Affairs (+$926,000)
- additional funding to enhance policy advice, research and monitoring capability of the Ministry of Consumer Affairs; and
- additional funding to increase monitoring and surveillance and increase access by business and consumers to Ministry of Consumer Affairs services in relation to measurement and product safety infrastructure.
Vote Energy (-$1.827 Million)
- additional funding to enhanced modelling of the impacts of policy choices in an energy system facing a high degree of uncertainty (e.g. with the rundown of Maui gas);
Offset by reductions for:
- one-off funding in 2003/2004 for establishing the Electricity Commission;
- one-off funding in 2003/2004 to enhance security of the electricity supply for 2004; and
- one-off funding in 2003/2004 for policy work on the purchase of a reserve electricity generation plant.
Vote Tourism (+$1.271 Million)
- additional funding in 2004/2005 to work with local government and other stakeholders to develop Water and Sewerage Infrastructure for Local Authorities scheme; and
- additional funding in 2004/2005 to enhance the policy and research capability for the tourism sector.
Offset by a reduction for:
- costs associated with the economic impact of Team New Zealand's 2007 America's Cup Challenge in 2003/2004.
Other Revenue (-$10.247 Million)
The main drivers of the change are as follows:
Vote Commerce (-$6.260 Million)
- one-off increases in 2003/2004, mainly due to marginal cost increases associated with processing an increase in volumes of trade mark applications and costs relating to the increase in late filing fees, company registrations; and
- increased usage of the Personal Property Security Register.
Vote Communications (-$4.000 Million)
- forecast reduction in radio spectrum resource fees in 2004/2005 following a fees review.
Vote Consumer Affairs (+$0.154 Million)
- continuation of the Powerswitch website and associated work programme.
Vote Energy (-$0.141 Million)
- undertake an expanded Fuels Quality monitoring programme; and
- establish an arbitration service to settle disputes between tree and line owners under Electricity (Hazards From Trees) Regulations
Offset by a reduction for:
- set-up costs in 2003/2004 for a public information campaign associated with lower sulphur diesel levels; and
- one-off revenue associated with the Crown Minerals Petroleum Conference held in 2003/2004.
Output Expenses (+$2.395 Million)
The main drivers of the changes reflect:
- additional costs associated with the newly established output class - Administration of Licensed Building Practitioners which will be funded by a memorandum account will initially see this output class run as a deficit.
Offset by a reduction for
- the expense side of the non-forecast related revenue related changes referred to above.
Forecast Net Surplus (-$12.580 Million)
This mainly reflects the forecast impact of a long-term strategy to reduce memorandum account balances administered by the Ministry.
Memorandum accounts are operated in Registration and Provision of Statutory Information; the Administration of Licensed Building Practitioners (both in Vote Commerce); Administration of the Radiocommunications Act (Vote Communications) and the Motor Vehicle Traders Registration activities (Vote Commerce and Vote Consumer Affairs).
Further information on how the Ministry is working towards reducing surpluses further are outlined in the Forecast of Memorandum Accounts Balances statement that forms part of the forecast financial statements.
Taxpayers' Funds (+$16.000 Million)
The change reflects additional equity for the Ministry.
The increase reflects additional funding for:
- the development and implementation of a national unit register under the Climate Change Response Act 2002 ($2.5 million);
- the establishment of a licensed building practitioners' electronic register to support the changes of the Building Bill ($500,000); and
- the provision of additional equity for the Ministry of Economic Development to provide it with a sustainable long-term equity base ($13 million).
In addition, while there is an increase to the equity position, additional capital is forecast to be provided, totalling $11.200 million to fund the forecast deficits noted above in the memorandum accounts operated in Registration and Provision of Statutory Information; the Administration of Licensed Building Practitioners (both in Vote Commerce); Administration of the Radiocommunications Act (Vote Communications); and the Motor Vehicle Traders Registration activities (Vote Commerce and Vote Consumer Affairs).
The following diagram represents the contribution each Vote makes to the Ministry's total departmental output class appropriation base (all GST inclusive):
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