Section 32A Of The New Zealand Telecom Act, 2014

Transcription

1 B.14 (Communications) Vote Communications Report in relation to selected Non-Departmental Appropriations for the year ended 30 June 2014 Presented to the House of Representatives pursuant to Section 32A of the Public Finance Act

2 Foreword Section 32A of the Public Finance Act 1989 requires the Minister responsible for nondepartmental appropriations that are not covered in any other report to Parliament to provide a report on the results achieved through the use of these appropriations. These reports provide Parliament with ex-post statements of service performance and results. This requirement applies for the following appropriations within my portfolio: Appropriation name Fibre Drop Costs Telecommunication Development Levy Funded Procurement Non-Urban Infrastructure International Connectivity Broadband Investment (Rural Supply) Hon Amy Adams Minister for Communications and Information Technology 2

3 Introduction This report records the financial and non-financial performance results for the outputs purchased through selected non-departmental outputs and other expenses in Vote Communications for the period 1 July 2013 to 30 June Objectives and purpose of appropriations: Appropriation name and scope Fibre Drop Costs This appropriation is limited to the cost of fibre connections between schools and Ultra- Fast Broadband (UFB) and Rural Broadband Initiative (RBI) providers cable in the roadway or network operators digital microwave radio towers. Impacts and outcomes Impact: Efficient, reliable and responsive infrastructure services. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Telecommunication Development Levy Funded Procurement Non-Urban Infrastructure This appropriation is limited to the payment of grants and investment for non-urban infrastructure offset by the Telecommunications Development Levy. Impact: Improved broadband services to rural areas. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. International Connectivity This appropriation is limited to the purchase of an anchor tenancy on a new trans-tasman and trans-pacific submarine cable. Impact: Efficient, reliable and responsive infrastructure services. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Broadband Investment (Rural Supply) This appropriation is limited to the provision of funding for grants or consumer subsidies relating to the deployment of broadband infrastructure in rural regions of New Zealand. Impact: Improved broadband services to rural areas. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. 3

4 Statements of Service Performance Non-Departmental Output Expenses Fibre Drop Costs Scope of Appropriation This appropriation is limited to the cost of fibre connections between schools and Ultra-Fast Broadband (UFB) and Rural Broadband Initiative (RBI) providers cable in the roadway or network operators digital microwave radio towers. Intended Impacts, Outcomes or Objectives Impact: Efficient, reliable and responsive infrastructure services. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Description of Activities During 2013/14 this funding was used to supply fibre based broadband to schools. Service Performance Non-Financial Performance measure 2012/ / /14 Budgeted Standard Standard Standard UFB and RBI providers comply with the contractual deliverables for supply of the fibre connections from the school boundary to the school building. New measure Meet contractual obligations as specified in contract During 2013/14 all vendors met or exceeded the obligations specified in their contracts. Financial Achieved Expenses 2012/ / / /14 Supp Total Appropriation 11,756 10,290 11,884 6,236 Comment This appropriation was underspent in 2013/14 to accommodate timing of the rollout of the RBI and UFB, which is required before fibre drops into New Zealand schools can be made and billed. The underspend is also due to the lead-in invoice approval process, which requires sign-off from school principals. There is an in-principle expense transfer of $7 million from 2013/14 to 2014/15 to accommodate the timing in the deployment of the Rural Broadband Initiative and Ultra-fast Broadband. This is subject to audit approval from Audit New Zealand who will commence their audit in August 2014 and is expected to be confirmed by the October Baseline Update (OBU) process. 4

5 Statements of Results Non-Departmental Other Expenses Telecommunication Development Levy F unded Procurement Non-Urban Infrastructure Scope of Appropriation This appropriation is limited to the payment of grants and investment for non-urban infrastructure offset by the Telecommunications Development Levy (TDL). Intended Impacts, Outcomes or Objectives Impact: Improved broadband services to rural areas. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Description of Activities The TDL was introduced with the passing of the Telecommunications (Telecommunications Service Obligations, Broadband, and Other Matters) Amendment Act The TDL revenue is collected in arrears after the end of the financial year to which it pertains. Non-Financial Performance measure 2012/ / /14 Budgeted Standard Standard Standard Vendors comply with contractual arrangements for the supply of telecommunications services with RBI. New measure Meet contractual obligations as specified in contract During 2013/14 all vendors met or exceeded the obligations specified in their contracts. Achieved Financial Other expenses 2012/ / / /14 Supp Total Appropriation 102,820 52,000 90,180 90,180 The difference in the appropriation from 2012/13 to 2013/14 is a result of re-phasing of the original Cabinet approval funding profile resulting in expense transfers from 2011/2012 to 2012/13 and 2012/13 to 2013/14. This reflects the staged implementation of the RBI programme. All funding was spent at year end. 5

6 International Connectivity Scope of Appropriation This appropriation is limited to the purchase of an anchor tenancy on a new trans-tasman and trans-pacific submarine cable. Intended Impacts, Outcomes or Objectives Impact: Efficient, reliable and responsive infrastructure services. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Description of Activities This appropriation is a result of an expense transfer of $15 million from 2012/13 to 2013/14 to reflect a procurement activity to provide a new Trans-Tasman and Trans Pacific cable. Results Non-Financial Performance measure 2012/ / /14 Budgeted Standard Standard Standard REANNZ will submit a detailed business case to Ministers before 30 June n/a Subject to a business case to be approved jointly by the shareholding Ministers Business case approved. A business case for purchasing capacity on the Hawaiki cable was submitted to shareholding Ministers in May 2014 and has been approved. Financial Other expenses 2012/ / / /14 Supp Total Appropriation - 15,000 15,000 15,000 There was an in principle expense transfer of $15 million from 2012/13 to 2013/14 to provide a new Trans-Tasman and Trans Pacific Cable. The amount $15 million was spent in June 2014 and therefore there is no variance at year end. 6

7 Broadband Investment (Rural Supply) Scope of Appropriation This appropriation is limited to the provision of funding for grants or consumer subsidies relating to the deployment of broadband infrastructure in rural regions of New Zealand. Intended Impacts, Outcomes or Objectives Impact: Improved broadband services to rural areas. Outcome: The quality, availability, price and security of New Zealand s telecommunications services increasingly support its position as a competitive business and lifestyle location. Description of Activities The purpose of this appropriation is to deliver significantly approved and affordable broadband services for rural New Zealand. The Government s rural broadband objectives are to (by 2016): connect 97 per cent of schools to fibre, enabling speeds of at least 100Mbps, with the remaining 3 per cent to achieve speed of at least 10Mbps improve coverage of fast broadband services so that 97 per cent of New Zealand households and enterprises are able to access broadband services with peak speeds of 5Mbps or better, with the remaining 3 per cent to achieve peak speeds of at least 1Mbps. Results Non-Financial Performance measure 2012/ / /14 Budgeted Standard Standard Standard Vendors comply with contractual arrangements for the supply of telecommunications services with RBI. New measure Meet contractual obligations as specified in contract During 2013/14 all vendors met or exceeded the obligations specified in their contracts. Achieved Financial Other expenses 2012/ / / /14 Supp October Baseline Update (OBU) 30,926 31,260 21,460 9,834 March baseline Update (MBU (30,926) Total Appropriation 7

8 This variance relates to the timing of the staged implementation of the RBI. Lower cost parts of the programme wave completed in the 2013/14 year. This appropriation is expected to be fully spent in 2014/15 as the fixed price contracts with vendors near completion. There is an in-principle expense transfer of $15 million from 2013/14 to 2014/15 that is expected to be confirmed by the October Baseline Update (OBU) process. 8