A.1. AR (2016)
Annual Report
2015-16
Presented to the House of Representatives pursuant
to Section 44(1) of the Public Finance Act 1989
COVER ARTWORK:
Jon Tootill born 1951 New Zealand
Maori tribal affiliation: Ngai Tahu
Pioriori 2014
gouache and pencil on paper
Collection of the Ministry of Foreign Affairs and Trade
Contents
From the Chief Executive
2
Ministry at a glance
4
Our role
6
Delivering our objectives
7
Objective 1: Maximise the impact of New Zealand’s membership of the UNSC
10
Objective 2: Lead the export markets stream of the Business Growth
Agenda to increase market access, regional economic integration, and
improve the international performance of New Zealand business
13
Objective 3: Embed New Zealand as an integral and trusted partner in
the Asia-Pacific
17
Objective 4: Maximise the impact of New Zealand’s engagement in
improving the prosperity, stability, and resilience of the Pacific Islands
region and its people
20
Objective 5: Promote sound international solutions on climate change,
natural resources, and environmental protection
24
Objective 6: Protect and advance New Zealand’s and New Zealanders’ security
27
Objective 7: Build robust and enduring organisational capability to
deliver strengthened and coherent international engagement
31
Statement of Responsibility
35
Statement of performance
36
Financial overview
48
Financial statements
50
Appropriation statements
84
Our legal responsibilities
88
Independent Auditor’s Report
91
Prospective financial statements - unaudited
93
Diplomatic immunity cases summary
102
Annex: Minister of Foreign Affairs' report on Vote Official Development
Assistancenon-departmental appropriations
103
Directory
113
FROM THE CHIEF EXECUTIVE
2
MINISTRY OF FOREIGN AFFAIRS AND TRADE
From the Chief Executive
The Government’s vision for New Zealand is of a
more open, more confident, more integrated and
more prosperous country that plays its part on the
international stage.
Advancing New Zealand’s interests is at the heart of
the Ministry’s work. Our purpose is clear: we act in
the world to make New Zealanders safer and more
prosperous.
We act in the world…
In representing New Zealand in the world the
Ministry is responsible for a global network
which speaks with an authoritative voice and is
led by individuals who are formally charged with
representing the state.
New Zealand’s term on the United Nations Security
Council ends in December and we can begin to
reflect on our achievements. In New York, we
have demonstrated through strong and sustained
leadership that we can make a positive difference
to regional and international affairs, despite the
challenges of the UN system. We intend to end
our tenure with New Zealand’s national values
honoured, our national interests advanced, and the
Ministry’s professional reputation enhanced.
In 2016, the New Zealand Government nominated
Helen Clark to become the UN Secretary-General
and the Ministry has supported her in an intense
and focused campaign. We have approached
the campaign with the same level of energy and
dedication that characterises all of the Ministry’s
work.
In addition, we have made significant advances on
climate change in the past year and the Government
plans to ratify the Paris Agreement by the end of
2016. We are delighted that our immediate past
Climate Change Ambassador has been appointed
as the co-Chair of the Ad Hoc Working Group on the
Paris Agreement.
… to make New Zealanders safer
In seeking to make New Zealanders safer we deliver
consular services, provide meaningful information
intelligently assessed, identify and defuse points
of conflict, pick international trends and position
New Zealand to benefit from them, reinforce good
stewardship of the global commons, and operate
at the point of intersection between domestic and
international risk.
We take our responsibility for helping create and
maintain a peaceful world seriously. In the past
year we have been party to a number of significant
decisions and developments, with ramifications for
global security.
In June 2016, Cabinet agreed to extend New
Zealand’s contribution to the joint New ZealandAustralia mission to train Iraqi Security Forces until
November 2018. The deployment in Iraq and work
with the Iraqi Army sits alongside our diplomatic,
development and humanitarian commitments.
New Zealand has been active on nuclear security
issues this year, with Prime Minister John Key
representing New Zealand at the fourth Nuclear
Security Summit held in Washington in March 2016.
At the summit, New Zealand highlighted our efforts
to advance our global nuclear security objectives.
Global wealth and power is shifting eastwards and
the Asia-Pacific has become that part of the world
where New Zealand must be a participant not a
spectator. Our relationships with key partners in the
region continue to deepen. In 2015 we celebrated
the 40th anniversary of diplomatic relations
with the Association of Southeast Asian Nations,
which culminated in elevating the status of the
relationship to a Strategic Partnership.
… and more prosperous.
In seeking to make New Zealanders more
prosperous, we negotiate market access for New
Zealand firms, we defend and advance our trade
interests at and behind international borders, we
build and support the international rules-based
trading system, and we bring an international
perspective to the domestic economic debate.
New Zealand benefits from leveraging a range of
new and old relationships across all regions and by
diversifying our trade.
The major development in trade this year has been
on the Trans-Pacific Partnership, with the signing
of the agreement in Auckland, the publication of all
TPP agreement documentation from New Zealand
and an extensive outreach programme, including
engagement with Māori groups around the country.
TPP will help to underpin New Zealand’s future
prosperity and international connectedness in a
complex world.
FROM THE CHIEF EXECUTIVE
In May 2016, New Zealand hosted the 13th round
of negotiations for the Regional Comprehensive
Economic Partnership, a 16-country free trade
agreement negotiation across Asia, Australia and
New Zealand. If concluded, it would be the largest
free trade area in the world in terms of population.
The result of the United Kingdom referendum on
membership of the European Union will require
careful navigation, and the Ministry is leading an allof-Government approach to secure New Zealand’s
interests.
We support prosperity and stability in
the Pacific …
New Zealand is a Pacific nation, with historical,
cultural, and family links throughout the region.
What happens in the Pacific has a direct bearing on
New Zealand’s well-being, so we invest significantly
to improve prosperity, stability and resilience in the
region.
In February 2016, the Ministry coordinated New
Zealand’s response to the devastation in Fiji caused
by Tropical Cyclone Winston. New Zealand has
committed $15.4 million to support response and
recovery in Fiji. Our on-ground assistance was one
of the biggest peacetime deployments to the Pacific,
with our staff working alongside the New Zealand
Defence Force and others to make a real difference
to the people of Fiji.
In June 2016, the Pacific Energy Conference secured
pledges of close to $1 billion of international
investment in sustainable energy initiatives in
the Pacific. This conference demonstrates the
important role we have in highlighting Pacific issues
to an international audience, and in generating
international support.
New Zealand will also invest $50 million over the
next three years to support the transformation
of the Pacific fisheries sector after Pacific leaders
endorsed ‘a Roadmap for Sustainable Pacific
Fisheries’ in 2015. New Zealand has committed
to sharing our experience, and will also invest in
monitoring and enforcement systems to help ensure
the long-term sustainable economic development
of Pacific fisheries.
The Ministry has made a cornerstone investment
of $7.5 million over five years in the New Zealand
Institute for Pacific Research. The Institute will
deliver timely and practical research that feeds into
solutions and practical tools to make the Pacific
prosperous, safe and self-reliant. It will enhance
New Zealand’s role as a thought leader on Pacific
MINISTRY OF FOREIGN AFFAIRS AND TRADE
issues and will become an important resource for
Pacific policy-makers.
During the year we conducted an internal capability
review of the Ministry’s International Development
Group. The review has resulted in the creation of a
new Pacific and Development Group, established
in August 2016. This new group integrates
development and foreign policy expertise, and will
position the Ministry today and in the future as a
centre of excellence on Pacific matters.
… and we strive for strong strategic
performance.
There can be no Ministry without its people, and I
am determined to put our people first. This year’s
employee engagement survey has shown big steps
forward on almost every measure. But foreign
ministries are challenging places in which to build
a career, and there is still a lot to be done before we
truly become an organisation in which every person
feels valued.
In the past year, people across the Ministry, in New
Zealand and offshore, have achieved significant
results for New Zealand. Whether it is historic
events or day-to-day demands, we deliver safety
and prosperity for New Zealanders, and we do so by
working hard and by working together in the pursuit
of shared goals which are clearly articulated.
As an organisation we have shown New Zealanders
that they can have confidence not only in our
professionalism but also in our ability to evaluate
our own performance and to take steps to improve
wherever possible.
The Ministry is graced by the quality of the people
who work for it. We ask a lot, we receive unstinting
professionalism in return, and I am grateful for this
commitment.
Brook Barrington
Secretary of Foreign Affairs
and Trade
3
staff in total
staff in
New Zealand
staff overseas
seconded staff
locally
employed staff
1,447
622
825
230
595
Moscow
Hamburg
The Hague
Berlin
London
Paris
Geneva
Brussels
Vienna
Ministry at a
glance
Ottawa
Milan
Rome
Madrid
Vancouver
Warsaw
Beijing
Istanbul
Seoul
Ankara
Tehran
Baghdad
Cairo
Los Angeles
Shanghai
Chengdu
New York
Washington DC
San Francisco
Tokyo
New Delhi
Riyadh
Dubai
Abu Dhabi
Guangzhou
Ha Noi
Mumbai
Shenzhen
Honolulu
Hong Kong
Yangon
Bangkok
Bridgetown
Ho Chi Minh City
Addis Ababa
$vote
Mexico City
Manila
FOREIGN AFFAIRS AND TRADE
Kuala Lumpur
Singapore
$412,284,000
Tarawa
1
Port Moresby
Jakarta
Honiara
Dili
Port Vila
Suva
OFFICIAL DEVELOPMENT ASSISTANCE
$589,326,000
2
Noumea
Nuku’alofa
Pretoria
Brasilia
Apia
Niue
Sao Paulo
Rarotonga
Sydney
Santiago
Canberra
Buenos Aires
Melbourne
NEW ZEALAND POSTS MANAGED BY
MFAT
1. 2015-16 Supplementary Estimates, excluding capital expenditure
NZTE
2. 2015-16 Supplementary Estimates
MAP OF NZ'S DIPLOMATIC AND CONSULAR MISSIONS
posts
in countries
around the world
57
50
accreditations
to other countries
at a
118
Honorary
Consuls
75
325
OUR ROLE
6
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Our role
Who we are
Crown entity responsibilities
The Ministry acts in the world to make New
Zealanders safer and more prosperous. We interpret
changes, provide advice to the Government on their
implications, and then act to promote and protect
New Zealand’s interests.
The Ministry monitors Antarctica New Zealand.
This Crown entity provides logistical support to
and manages New Zealand’s activities in Antarctica
and the Southern Ocean, particularly in the Ross
Dependency.
Portfolios
• Foreign affairs
With the Ministry of Business, Innovation
and Employment we also jointly monitor the
performance of New Zealand Trade and Enterprise,
the Government’s international business
development agency.
• Trade
Legislation administered
• Climate change issues.
We solely administer 31 pieces of legislation. With
the Ministry of Justice, we jointly administer the
International Crimes and International Criminal
Court Act 2000, and the Terrorism Suppression
Act 2002. We also administer export controls
on strategic goods under the Customs Export
Prohibition Order 2011.
The Ministry works for Ministers in three ministerial
portfolios:
We manage New Zealand’s official development
assistance, and disarmament and arms control, as
part of the foreign affairs portfolio.
Votes
We administer two votes:
• Vote Foreign Affairs and Trade, which also
provides funding to one Crown entity (New
Zealand Antarctic Institute) and two Crown
charitable trusts (Pacific Cooperation Foundation
and Asia New Zealand Foundation)
• Vote Official Development Assistance, which
consists of one departmental appropriation
and two multi-year non-departmental
appropriations. The current multi-year period
covers 2015/16–2017/18. The multi-year approach
allows for predictability of aid volume in outyears and increases effectiveness.
We administer a number of statutory regulations,
particularly in the area of UNSC sanctions,
diplomatic privileges and immunities, and Tokelau.
DELIVERING OUR OBJECTIVES
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Delivering our objectives
The Ministry works collectively with other
government agencies to help make New Zealanders
safer and more prosperous.
Our 2015-16 strategic framework sets out the
organisational capability required to help deliver
our foreign policy, trade and development
objectives that contribute to strategic outcomes,
which are aligned with Government priorities.
The Ministry has four 10-year strategic outcomes
that shape the value we deliver to New Zealanders.
This is through:
• improving prosperity for New Zealand and our
region
• ensuring the stability, security and resilience of
our country, our people, and our region
• leadership, by amplifying New Zealand’s
influence and standing in the world
• kaitiakitanga, or stewardship, by delivering
solutions to global challenges for the benefit of
present and future generations.
To support the attainment of our 10-year strategic
outcomes, the Ministry is focusing its delivery
through seven specific four-year objectives. The
seven objectives are:
1. Maximise the impact of New Zealand’s
membership of the UNSC
2. Lead the export markets stream of the Business
Growth Agenda to increase market access,
regional economic integration, and improve
the international performance of New Zealand
business
3. Embed New Zealand as an integral and trusted
partner in the Asia-Pacific
4. Maximise the impact of New Zealand’s
engagement in improving the prosperity,
stability, and resilience of the Pacific Islands
region and its people
5. Promote sound international solutions
on climate change, natural resources, and
environmental protection
6. Protect and advance New Zealand’s and New
Zealanders’ security
7. Build robust and enduring organisational
capability to deliver strengthened and coherent
international engagement.
Progress towards achieving our objectives and
deliverables as described in our Strategic Intentions
2015-2019 is the subject of this annual report.
Results on our success indicators, some of which
are outside of our direct control or influence, are
incorporated in the main narrative.
The output performance measures in the
Information Supporting the Estimates of
Appropriations 2015-16 (and Supplementary
Estimates) for the Votes administered by us are
reported in the statement of performance.
7
MINISTRY OF FOREIGN AFFAIRS AND TRADE
networks
8
people
are highly capable and
diverse, with the right skills
and expertise needed to
deliver on Government
priorities, and are highly
engaged and productive
Our broad established
diplomatic network of
offshore posts, accreditations
and honorary consuls, as
well as our digitally enabled
networks, are in the right
places at the right time
MINISTRY OF FOREIGN AFFAIRS AND TRADE
relationships
– including our relationships
with domestic and international
partners (governmental,
multilateral, civil society, and
sector groups), are targeted and
used effectively to build influence
and reputation
systems
The way we operate our
business and the tools we use
to achieve and deliver our
objectives are fit-for-purpose
to enable fast, efficient, and
effective delivery
robust and
enduring
organisational
capability,
framework
Economy
Maximise the impact of New Zealand’s
membership of the United Nations
Security Council
Objective 2
BGA
we support…
The Ministry acts in the world
to make New Zealanders safer
and more prosperous
…the delivery of our
four-year
foreign policy,
trade and
development
objectives,
Government
priorities
that in turn
contribute…
Build a more competitive
and productive economy
Finances
Lead the export markets stream
of the Business Growth Agenda to
increase market access, regional
economic integration, and improve
the international performance of
New Zealand business
Objective 3
Asia Pacific
Embed New Zealand as an integral and
trusted partner in the Asia Pacific
Objective 4
Pacific
Islands
Maximise the impact of New Zealand’s
engagement in improving the prosperity,
stability and resilience of the Pacific
Islands and its people
Objective 5
Environment
…to our
Responsibly manage the
Government’s finances
strategic
outcomes,
Services
Promote sound international solutions
on climate change, natural resources
and environmental protection
Objective 6
that are
Deliver better public
services to New Zealanders
Security
aligned with…
Protect and advance New Zealand’s
and New Zealanders’ security
Christchurch
Support the rebuilding
of Christchurch
Objective 1
UNSC
With our
Our strategic
9
Prosperity
Kaitiakitanga
Our work delivers improved
prosperity for New Zealand
and our region
Stability
Leadership
Our work delivers security
and resilience to our country,
our people, and our region
Our work amplifies New Zealand’s
influence and standing in the world
Our work delivers solutions to global
challenges, for the benefit of present
and future generations
OBJECTIVE 1
10
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 1:
Maximise the impact of New Zealand’s
membership of the UNSC
During 2015-16, we sought to use our membership
on the United Nations Security Council (UNSC) to
influence global peace and security, advance New
Zealand’s interests by delivering on our campaign
promises, and add greater depth to relationships
that matter to us.
Over the 2015-2019 period, we will know that we
are successful when:
• The UNSC performs more credibly and with
better results in those areas New Zealand
campaigned on – improved Council processes,
more effort to prevent conflict, and stronger
peacekeeping mandates
• Issues of concern to Small Island Developing
States are brought to the UNSC and
mainstreamed in other international fora
• New Zealand’s global influence and
relationship network is stronger and deeper
as a consequence of the reputation we earn on
the UNSC.
New Zealand has been a constructive, effective
contributor on the Council and is regarded as
a leading voice among elected members. We
have been active across the Council’s agenda
and demonstrated that we are willing to take
on major issues and challenge the Council to do
better. However, our term has been set against
the backdrop of a challenging global peace and
security environment. Tensions between major
powers within the Council have often restricted
the Council’s ability to act effectively. In some
instances, this has made it difficult to translate
efforts directly to measureable improvements in
Council performance.
To help resolve major issues before the Council,
we maintained the Council’s focus on the need to
revive the Middle East Peace Process (MEPP) and put
forward ideas for action. While the positions of key
players have so far prevented these being advanced,
we have been commended for our considered and
even-handed approach.
New Zealand has consistently advocated for an end
to the conflict in Syria, although key players have
preferred to deal with this issue outside the Council
throughout the reporting period. New Zealand has
co-led with Spain, Jordan and Egypt, the Council’s
work to provide increased access for humanitarian
convoys into besieged areas. Since a resolution was
passed in late December 2015, over 300 aid convoys
have passed through and the monthly average
number of trucks delivering aid has increased fivefold. However, implementation remains challenging
due to the behaviour of forces on the ground.
As a chair of the Council’s key sanctions committees
directed at terrorist groups (ISIL, Al-Qaida, and
the Taleban), New Zealand is regarded as a strong
contributor.
New Zealand also co-led, with four other elected
Council members, the Council’s work to reinforce
that providing healthcare (both in Syria and in other
conflict situations) must be protected by parties
to conflict. Ensuring compliance by forces on the
ground is highly challenging.
Our perspectives and engagement on other major
issues, such as in Yemen, Libya, South Sudan and
Burundi, have also been influential in shaping
Council thinking and action.
New Zealand has directed significant effort towards
making the Council-mandated peacekeeping
operations more effective. We have trialled a
new model of informal meetings between Council
members, troop and police-contributing countries,
and relevant parts of the UN Secretariat. This
ensures that important aspects of the operating
environment on the ground are taken into account
in Council planning. This model has received broad
support and has been used successfully in several
peacekeeping operations. We particularly pushed
for better Council oversight and management
of risks to UN peacekeepers and civilians in the
Democratic Republic of the Congo and in South
Sudan. We have highlighted that safety and
security of peacekeepers and civilians, across all
peacekeeping mandates, is essential.
OBJECTIVE 1
On Council processes, New Zealand has played a
leading role in challenging existing Council practice
and decision-making culture. We have encouraged
the Council to focus more on problem-solving and
to allow more space for all members to contribute.
We have convened an unprecedented meeting of
all Council members to examine impacts on the use
of the veto and to encourage improvements. We
have obtained a change to the Council’s practice for
allocating chairing responsibilities for all Council
committees so that the process now involves
elected members rather than being dictated by
a permanent member. We have taken a leading
role in coordinating joint action among the 10
elected Council members, where it is appropriate
(for example, the Council’s resolution to protect
the provision of healthcare). We have established
a new Council practice to hold a Permanent
Representative-only meeting at the beginning of
each month to focus senior representatives on the
most pressing problems facing the Council. And
we have established the new model of informal
meetings for peacekeeping missions mentioned
earlier.
New Zealand has consistently pushed the Council
to lift its performance on conflict prevention, both
by helping to improve its working methods, as
mentioned earlier, and also by being prepared to
act earlier in specific cases. In Burundi and Guinea
Bissau, for example, New Zealand sought to have
the Council act at an early stage to apply political
pressure to prevent violence. In these efforts,
we promoted close partnership with regional
organisations, in particular with the African Union.
New Zealand has also provided additional multiyear funding to the UN’s Department of Political
Affairs to strengthen its conflict prevention
capacity – often drawn on to carry out preventive
diplomacy requested by the Council. However, the
political environment for achieving more active
preventive diplomacy by the Council remains very
challenging, in particular because of concerns
among a number of states that prevention will
lead to interference by the UN in domestic political
affairs of the states concerned.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
In line with our commitment made during our
campaign for a term on the Council, New Zealand
has worked to ensure small states, and Small Island
Developing States (SIDS) in particular, are given a
fair hearing on issues relating to them before the
Council. We have raised the profile of the peace
and security issues faced by SIDS by convening, at
Ministerial level, the Council’s first debate on this
issue (see accompanying case study). New Zealand
has also ensured non-Council members with a stake
in Council discussions are involved in an inclusive
and transparent way. For example, we have made
efforts to reach out to affected countries such as
Afghanistan, Liberia and Myanmar, before topics of
interest to them have come before the Council.
New Zealand has also continued to use its Council
term to build deeper and broader strategic
relationships that advance our interests. The
Council term has provided New Zealand with
new areas of engagement with a broad range of
countries and has increased our credibility as an
interlocutor on global peace and security issues.
New Zealand’s entire diplomatic network has
been active both in servicing the Council term and
maximising the bilateral relationship value that the
term can bring. Reporting from posts throughout
the period has underlined that our Council position
has provided new links with some countries and
deepened existing relationships with others.
New Zealand has established new relationships in
Africa and in the Caribbean. We have deepened our
profile and relationships in the Middle East, as well
as increased our engagement with Iran following
the adoption of a landmark Council resolution
under New Zealand’s presidency and the removal of
UN sanctions. And we have added a new dimension
to relationships with permanent members of the
Council.
Overall, we have seen a change in perception of
New Zealand’s relevance, enhancing our global
brand and goodwill towards us. In the last part
of the term, we will be carrying out planning to
ensure the increased engagement and relationship
benefits will endure.
11
OBJECTIVE 1
12
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Case study:
Small Island Developing States – peace and security
A fifth of the members of the United Nations are
Small Island Developing States (SIDS). There are
37 of them – and only very few of them have ever
served on the UN Security Council.
capacity-constrained law enforcement agencies
to combat organised crime groups.” He urged the
Council to dedicate a day each year to considering
the peace and security challenges of SIDS.
One of the commitments made by New Zealand
during its campaign for a seat on the Council was
to ensure that issues of concern to SIDS are brought
to the Council. New Zealand therefore hosted the
first ever UN Security Council Open Debate in
New York on 30 July 2015 on peace and security
challenges facing SIDS, chaired by our Foreign
Affairs Minister Murray McCully.
Jamaica Prime Minister Portia Simpson Miller said
in Jamaica and the wider Caribbean Community
region, transnational organised crime represents
the gravest threats to peace and security. “The
illegal flow of small arms and ammunition into our
local communities continues to pose a significant
challenge to law and order. We welcome the
Council’s continued consideration of the issue of
small arms.” She also highlighted a proposal by
the Economic Commission for Latin America and
the Caribbean for a debt-relief strategy that would
address unsustainable public debt levels.
The UN Secretary-General Ban Ki-moon and
political leaders from Island nations in the Pacific,
Caribbean, and Indian oceans briefed the Council
at the debate, followed by statements by over 70
speakers. They focused on:
• climate change and natural disasters
• transnational organised crime and piracy
• governance and exploitation of natural
resources
• sustainable development
• peace and security.
Mr Ban Ki-moon said combatting climate
change, promoting sustainable development and
addressing the vulnerabilities of SIDS will demand
partnership, capacity and leadership.
Samoa Prime Minister Tuilaepa Sailele Malielegaoi
said some organised crime groups and networks
are gradually becoming entrenched in the Pacific.
“This will continue to test the ability of our
Seychelles Minister of Finance Jean-Paul Adam said
SIDS are the planet’s ‘blue guardians’, surrounded
by oceans like the Seychelles. “But lawlessness
and impunity are more often than not the norm
on the high seas. International criminality is
often tolerated, and prosecutions of international
crimes at sea remain uneven.” He urged the Council
to support better governance of oceans using
partnerships.
New Zealand issued a summary and published a
booklet to capture the key themes and proposals
raised by participants during the Open Debate,
providing a platform for continued work on
addressing the peace and security challenges
facing SIDS.
New Zealand
Foreign
Minister, Hon
Murray McCully,
addresses the
Security Council
Open Debate on
Maintenance of
international
peace and
security: Peace
and security
challenges
facing
small island
developing
States on 30
July 2015 as
President of the
Council. At left
is UN SecretaryGeneral Ban
Ki-moon.
Photo: UN
Photo/Cia Pak.
OBJECTIVE 2
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 2:
Lead the export markets stream of the
Business Growth Agenda to increase market
access, regional economic integration, and
improve the international performance of
New Zealand business
During 2015-16, we worked to maintain and increase
openness of key markets, supported exporters to
succeed internationally and helped businesses
to become more internationally connected. We
continued free trade agreement (FTA) work and
delivered results from World Trade Organization
(WTO) processes.
Over the 2015-2019 period, we will know that we
are successful when:
• The percentage of New Zealand exports
covered by our FTA network is increased to 80
percent for goods and 70 percent for services
• New Zealand exporters are satisfied with
support they received from the Ministry
• WTO dispute resolution outcomes are
favourable for New Zealand.
We have continued to lead work for the export
markets pillar of the Government’s Business Growth
Agenda (BGA), which aims to lift exports to 40
percent of gross domestic product (GDP) by 2025.
In September 2015, the Towards 2025 report was
launched. This marks a refresh of the BGA, including
a Building Export Markets workstream that clearly
outlines the Government’s key priorities for
delivering on its export goals.
Following the refresh, the workstream contained
43 projects (23 new and 20 existing) for government
agencies to work on. Of these, 33 remain active, with
the rest having been completed. A total of 54 export
projects have now been completed since the BGA
began in 2012.
The ratio of export growth has remained constant
at 30 percent due to strong growth in the nontradeable sector (that is, the construction and
services components of GDP), which has kept pace
with the rise in New Zealand’s exports in real terms.
The share of New Zealand’s exports going to our
FTA network for the year ending March 2016 was
52 percent for goods and 46 percent for services3.
The share of goods and services exports covered
by FTAs will increase to 72 percent and 65 percent
respectively once the Trans-Pacific Partnership (TPP)
comes into force.
The TPP is a free trade agreement that will
liberalise trade and investment between 12 Pacific
Rim countries: New Zealand, Australia, Brunei
Darussalam, Canada, Chile, Japan, Malaysia, Mexico,
Peru, Singapore, the United States and Viet Nam.
The TPP negotiations were concluded in October
2015 and the agreement was signed in Auckland on
4 February 2016. The signing signalled an important
milestone and the beginning of the next phase for
the TPP. Signatories are now focusing on completing
their respective domestic processes necessary
to ratify the agreement. Subject to ratification by
signatories, this is positioned to come into force by
late 2017/early 2018 (see accompanying case study).
The New Zealand-Korea FTA, signed in March 2015,
entered into force on 20 December 2015. Current
duty-free access to the Korean market is in place,
and existing tariffs were eliminated on $793 million,
or 48 percent, of New Zealand exports. A second
round of tariff cuts took place in January 2016.
The first official meeting of trade officials
following entry into force was held in March 2016
for the inaugural FTA Joint Commission. The Joint
Commission noted the positive progress by both
sides on implementation of the FTA commitments.
3. These statistics only include markets with which we have trade agreements in force with (i.e. Australia, ASEAN, Chile, Hong Kong, China,
Chinese Taipei, and Korea). It does not include markets with which we have concluded FTAs with but have not yet entered into force (e.g. TPP) or
markets with which we currently have negotiations under way with/pending finalisation (e.g. GCC, India, RCEP and PACER Plus).
13
OBJECTIVE 2
14
The Regional Comprehensive Economic
Partnership (RCEP) negotiations continued over
2015-16. RCEP is an FTA negotiation among 16
countries – the 10 members of the Association
of Southeast Asian Nations (ASEAN) and the six
countries with which ASEAN already has FTAs.
These are Australia, China, India, Japan, Korea and
New Zealand.
The thirteenth round was held in Auckland in June
2016. Meetings were held on goods, services and
investment, with challenges remaining in both
ambition and timing. A number of events were
organised to allow stakeholders to engage with
negotiators on a range of RCEP issues, as well
as on the specific topics of trade in services and
non-tariff measures. The New Zealand delegation
trialled a question-and-answer event for New
Zealand and some international stakeholders,
which was live-streamed.
During the RCEP meetings in Auckland, the
Ministry met with India to progress the New
Zealand-India FTA negotiations. Avenues to further
progress the negotiations are being explored.
New Zealand and European Union leaders agreed
in October 2015 to start the process towards New
Zealand-European Union FTA negotiations. A key
part of the preparatory phase is a joint scoping
process, which needs to be completed before
negotiations can commence. Discussions on scope
and overall approach are proceeding and we
remain hopeful negotiations can be launched in
the first half of 2017.
Following the initial agreement between leaders
to consider a China FTA upgrade, the upgrade was
discussed by leaders during the Prime Minister’s
visit to Beijing in April 2016 and by Trade Ministers
in July and August 2016. Discussions on what the
scope of negotiations might include are ongoing.
We continue efforts to complete the legal
verification process necessary to bring into force
the New Zealand-Gulf Cooperation Council FTA,
concluded in 2009. The Minister of Foreign Affairs
visited Riyadh in April 2016. A joint statement with
the Saudi Deputy Commerce Minister confirmed
that Saudi Arabia was keen to make progress
towards the FTA this year. We have also made good
progress in taking forward a number of sanitary
and phytosanitary instruments as part of the NZ
Inc Gulf Cooperation Council Strategy designed to
reduce barriers to trade.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
New Zealand is progressing its relationship with
the Pacific Alliance – a relatively new outwardlooking grouping of Pacific Rim countries in Latin
America. New Zealand was invited to meet with
Pacific Alliance senior officials in March 2016.
Pacific Alliance members are now assessing the
prospects for an agreement with New Zealand.
Beyond trade negotiations, our role is to resolve
major market access challenges. This year, we
enforced trade rights on behalf of exporters
in a WTO legal dispute concerning Indonesian
agricultural barriers. The non-tariff barriers (NTBs)
that New Zealand challenged were introduced in
2011 and have resulted in our beef exports falling
by over 80 percent into what was once our secondlargest export market by volume, worth $180
million per year. Certain horticultural exports have
also been held back in this important and highpotential market. We are leading the litigation in
close collaboration with the Ministry for Primary
Industries and our export industry. We expect a
ruling towards the end of 2016.
As a small country dependent on global trade,
New Zealand is committed to supporting a robust
and viable WTO. This is reflected in New Zealand
accepting the WTO Trade Facilitation Agreement
(TFA) in September 2015. The TFA will facilitate
trade by simplifying and streamlining customs
and border processes. It will minimise costs to
businesses associated with getting products
across borders and into the marketplace. The
TFA will enter into force once two- thirds of WTO
members have accepted it.
We were active in the current round of WTO
negotiations, including as chair of the agriculture
negotiations, at the 10th Ministerial Conference
of the WTO in Nairobi, Kenya, in December 2015.
At the conference, we welcomed the agreement
of the WTO Nairobi package. The most important
outcome for New Zealand was the agreement to
eliminate the ability of WTO members to subsidise
their agricultural exports. This outcome directly
benefits New Zealand agricultural exporters.
OBJECTIVE 2
The successful conclusion of negotiations on the
expansion of the WTO Information Technology
Agreement (ITA) was also welcomed. This
will remove tariffs from 201 information and
communication technology products. The WTO
estimates that the value of global trade covered
in the expanded ITA is $1.9 trillion annually. The
value of New Zealand’s exports of the products
covered is some $1 billion annually. Phasing out
tariffs on these products will boost the global
economy, and benefit the IT industry and New
Zealand consumers. It is also the first major tariffelimination deal at the WTO in the past 19 years.
We have continued to work with our NZ Inc
counterparts to deliver an improved policy
environment. We have also intensified operational
support to assist businesses achieve their
internationalisation objectives. The Building
Export Markets workstream includes a crossagency group to reduce NTBs faced by exporters.
This group, chaired by MFAT, is overseeing how
government is collectively focusing its effort
to address NTBs. Specifically, we have taken on
the role of ‘services champion’ and, with New
Zealand Trade and Enterprise (NZTE), are assessing
the regulatory barriers faced by our services
exporters.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
The Ministry conducted an initial survey of its
export business stakeholders this year. Fifty-three
percent of respondents who completed the survey
reported that the Ministry had added significant
value to their business, and 16 percent reported
outstanding value. Fifty percent of respondents
reported that they found Ministry staff to be very
helpful, and 33 percent found them exceptionally
helpful.
The more satisfied respondents highlighted our
work for market access, including the negotiation
and implementation of FTAs, clarification of
overseas regulations, advice on local politics,
market conditions and opportunities, and the
opening of doors to overseas partners and
decision-makers.
The less satisfied respondents recommended that
we make it easier for business to engage with
Heads of Mission and our other staff, intensify
our business outreach, promote plain English
communication with business, and clarify the
partnership opportunities available for business
through the New Zealand Aid Programme.
The survey findings will inform our 2016-17
business engagement work programme and
activities.
15
OBJECTIVE 2
16
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Case study:
Conclusion of Trans-Pacific Partnership negotiations
New Zealand’s Trans-Pacific Partnership (TPP) National
Interest Analysis (NIA), publicly released on 26 January
2016, addresses the implications of TPP for New
Zealand. This included the legislative amendments,
regulatory changes, and changes to policy and practice
necessary to implement the agreement.
Following signature, the final text of the TPP,
together with the TPP NIA, was presented to
Parliament for treaty examination by the Foreign
Affairs, Defence and Trade Select Committee (FADTC).
During this process, FADTC received submissions
from the public. FADTC reported back to Parliament
on 4 May 2016.
to build on the $20 billion of goods and $8 billion of
services exported to TPP countries in 2014.
The 12 TPP signatories collectively constitute
approximately 36 percent of world GDP – worth a
total of US$28 trillion. TPP would be New Zealand’s
first free trade agreement with the United States
(world’s largest economy), Japan (world’s thirdlargest economy), Canada, Mexico, and Peru.
An implementing omnibus bill was then introduced
to the House of Representatives on 9 May 2016. This
makes the legislative changes required to comply
with New Zealand’s obligations in TPP, except for
obligations related to plant variety rights, for which
New Zealand has a three-year period following entry
into force to implement. On 12 May 2016, the bill
passed its first reading and was referred to FADTC
for consideration.
Under TPP, around $274 million of tariffs currently
payable on goods imported from New Zealand will
be eliminated – half of which will be removed from
the first year the agreement enters into force. All
originating New Zealand exports to TPP countries
will ultimately be duty free, with the exception of
some dairy products to some markets and a reduced
tariff on beef to Japan. New Zealand service suppliers
and investors will also benefit from reduced barriers
in the region. And government suppliers will be given
access to a number of international markets that are
currently closed to New Zealand providers. Overall,
TPP is estimated to add at least $2.7 billion a year to
New Zealand’s GDP by 2030.
TPP will give New Zealand better access to globally
significant markets, contributing to the aim of the
Government’s Business Growth Agenda of raising
exports to build a more competitive and productive
economy. TPP will diversify New Zealand’s trade and
investment relationships, and provide a platform
Factsheets have been published and 17 roadshows
and hui have been held nationwide throughout
2016 to explain what the agreement means for New
Zealand, and to help businesses prepare to take
advantages of new opportunities following TPP’s
entry into force.
Signing of the
Trans-Pacific
Partnership,
Auckland,
New Zealand
4 February 2016.
OBJECTIVE 3
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 3:
Embed New Zealand as an integral and
trusted partner in the Asia-Pacific
During 2015-16, we advanced New Zealand’s
political, economic and security interests in the
Asia-Pacific. This region is particularly important
to New Zealand given its proximity, its increasing
influence and the desire of countries in this region
to become more closely integrated.
Over the 2015-2019 period, we will know that we
are successful when:
• The Asia-Pacific Economic Cooperation study
on the Free Trade Area of the Asia-Pacific is
concluded by the end of 2016 and it reflects
New Zealand’s ambition
• ASEAN 2015 commemorative events raise New
Zealand’s profile and lead to an intensification
of political and economic activity between
New Zealand and ASEAN
• The value of two-way trade and investment
with the region increases
• People-to-people links with the region
strengthen, as indicated by the number of
short-term visitors, students, and improved
air links.
We continued to work towards the long-term
vision of a Free Trade Area of the Asia Pacific
(FTAAP). New Zealand has been involved in shaping
a Collective Strategic Study on issues impacting
the realisation of the FTAAP, which is due to be
presented to Asia-Pacific Economic Cooperation
(APEC) leaders at the end of 2016. The study will
provide an analysis of potential economic and
social benefits and costs, analyse the various
pathways towards a Free Trade Area, and identify
challenges economies may face in realising this
goal. Within APEC, divergent views remain about
what an FTAAP might entail, and how we get there,
but we are hopeful the study will lead to a useful
work programme tackling key challenges to further
regional economic integration.
A range of important anniversaries showcased
New Zealand’s relationships with South East
Asia, including strengthening our partnership
with the region. New Zealand celebrated the 40th
anniversary of relations with the Association
of Southeast Asian Nations (ASEAN) in 2015 (see
accompanying case study). New Zealand also
celebrated important diplomatic anniversaries with
Singapore and Viet Nam (in 2015) and with Thailand
and the Philippines (in 2016).
New Zealand has also invested significantly in
Head of Government and Head of State-level
diplomacy with South and South East Asia in
the past year, with visits from, or to, Viet Nam,
Singapore, Malaysia, the Philippines, India and Sri
Lanka. This intense pace of high-level engagement
is emblematic of a deepening and sharpening of
diplomatic activities in the region.
A number of countries in South and South East Asia,
including Sri Lanka, Myanmar and the Philippines,
have undergone significant political changes in
the past year. New Zealand has sought to navigate
these changes in a way that creates maximum
mutual advantage. Prime Minister John Key visited China accompanied
by Minister for Primary Industries Nathan Guy,
Minister of Trade Todd McClay and a delegation
of 42 businesses. Meetings with President Xi and
Premier Li strengthened and bolstered the political
relationship with Beijing. A business event with Jack
Ma, the founder of online marketplace Alibaba, and
a number of other highly successful entrepreneurs
demonstrated the high regard for New Zealand in
China. As well as promoting traditional exports, the
delegation and events highlighted the broadening
of our relationship with China through a focus on
the creative sector (including a New Zealand Film
Festival) and New Zealand’s science and innovation.
Throughout the visit, the Prime Minister oversaw
the signing of film, tourism, science and business
agreements potentially worth more than $250
million.
The Ministry supported visits by the Minister of
Māori Development, Te Ururoa Flavell, to China,
Korea, and Japan – in each case accompanied by a
business delegation – showing the value of personal
and cultural connections in building and sustaining
relationships and in securing business deals.
17
OBJECTIVE 3
18
New Zealand’s high-quality, high-value, products
are in demand in all these markets and the
Māori dimension of business is well received. It
helps New Zealand to stand out in increasingly
competitive markets. All three countries are
important partners for Māori businesses – as
export destinations, and sources of investment and
visitors.
Progress was also made in strengthening
partnerships and connections at sector levels. In
agriculture, work with Fonterra deepened links with
the key dairy region of Hokkaido, Japan. In forestry,
support was provided for Crown Research Institute
Scion to re-engage with Japan. In renewable energy,
new commercial relationships were developed with
the geothermal industry in Japan. New transport
technologies were explored during the visit of
Transport Minister Simon Bridges in August 2015. In
sport, educational and promotional activities were
held in the lead-up to Japan’s hosting of the Rugby
World Cup 2019 and the Olympics 2020.
The value of two-way trade and investment within
the Asia-Pacific region are:
• two-way trade in goods and services between
NZ-APEC: $97.0 billion (for the year ending 31
March 2016), up 4% from the March 2015 year
• foreign direct investment from APEC: $65.5
billion (as at 31 December 2015), down 17%
from December 2014
• overseas direct investment to APEC: $15.3
billion (as at 31 December 2015), down 26%
from December 2014.
Visitor arrival figures are:
• visitor arrivals from APEC countries (nearly 2.5
million) were up 251,184 or 11.3% in June 2016
compared with June 2015, with the biggest
change in arrivals from China (up 83,552 or
26.7%).
New air links include:
• Air New Zealand to return to Kansai route
(after withdrawing in 2013)
• Air New Zealand established direct flights to
Houston and Buenos Aires.
Prime Minister John Key attended the Tenth East
Asia Summit (EAS) in Kuala Lumpur in November
2015. The EAS is an important body for leaders
to discuss key strategic political, economic and
security issues concerning the region. It is also an
important vehicle for New Zealand’s engagement
MINISTRY OF FOREIGN AFFAIRS AND TRADE
in the region and provides regular access to
key partners at the leader and ministerial level.
New Zealand contributed to constructive moves
to strengthen the EAS as a body to address major
regional issues.
To build the capability of New Zealanders and New
Zealand organisations to engage in the Asia-Pacific
region, we are sponsoring and leading development
and delivery of a cross-agency China Capable
Public Sector programme. This will improve
New Zealand’s international competitiveness and
ensure our objectives in relation to China are better
addressed. A number of initiatives are under way
including a community of practice consisting
of China experts from across the public sector,
knowledge transfer events, masterclasses and
development of a repository of online knowledge
and resources aimed at China practitioners and
leaders of agencies. This is underpinned by an
integrated talent management framework that
attracts, develops and deploys a talent pipeline
of China expertise across the New Zealand public
sector.
On 19 February 2016, the Australian Prime Minister
announced a new pathway to permanent residence,
then citizenship, for New Zealanders living in
Australia. Around 100,000 New Zealanders could
be eligible for the new pathway, which opens on
1 July 2017. The new pathway acknowledges the
significant contributions many New Zealanders
make to Australia and their enduring community
ties.
The announcement follows over 15 years of transTasman engagement about New Zealanders living
in Australia. While New Zealanders have the freest
access of any people to live, work and study in
Australia, New Zealanders arriving in Australia since
February 2001 have not been considered permanent
residents, with consequences for their rights and
entitlements. The New Zealand Government has
continued to highlight the practical difficulties that
arise for some New Zealanders as a result of the
policy, and the consequential implications for the
Australian Government.
The pathway announcement was made during
the Prime Minister’s visit to Sydney for the annual
Leaders’ Meeting with the Australian Prime Minister.
The meeting provides the opportunity for deep
engagement on bilateral, regional and global
issues. An event bringing together the Australian
and New Zealand business communities was held
alongside the Leaders’ Meeting, and a delegation
OBJECTIVE 3
of around 30 senior New Zealand business leaders
accompanied the Prime Minister to Sydney.
In March/April 2016, Prime Minister John Key
visited Washington to meet with economic and
trade leaders and attend the Nuclear Security
Summit. The United States is a key economic
partner for New Zealand. Discussions focused on
ways to increase trade between New Zealand and
the United States, including under TPP. Further
information on the Nuclear Security Summit is
provided under objective 6 on page 30.
In April 2016, the Ministry supported a delegation
led by the Speaker, Rt Hon David Carter to help
strengthen New Zealand’s bilateral ties with
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Latin America. The delegation engaged in a
wide-ranging programme in Mexico, Chile and
Argentina with a specific emphasis on building links
with parliamentarians in each country, fostering
international cooperation, and promoting New
Zealand’s national interests.
19
We are also advancing the Government’s goal to
open an Embassy in Colombia. Colombia has one of
the strongest performing economies in the region.
A dedicated New Zealand presence in Bogotá will
help to support the development of strong business
links, particularly investment in Colombia’s agribusiness and dairy sectors.
Case study:
New Zealand and ASEAN commit to a Strategic
Partnership
In 2015 New Zealand and Association of
Southeast Asian Nations (ASEAN) celebrated the
40th anniversary of relations. The ASEAN-NZ
Commemorative Summit in November marked a
major shift in our relationship as we elevated the
status of the relationship to the highest level – a
Strategic Partnership.
As a demonstration of commitment to the
partnership, Prime Minister John Key announced
that New Zealand would invest over $200 million
into cooperation with ASEAN over 2015-2018. “The
funding will focus on building the capability of
the region’s people and creating links between our
young leaders and emerging entrepreneurs – the
people who will build on the ties we have forged in
the past 40 years,” he said.
New Zealand’s development assistance will form a
large part of the overall investment, and ASEAN is
now New Zealand’s largest development programme
outside of the Pacific.
Activities already under way include a new
Prime Minister’s Fellowship programme, increased
postgraduate scholarships and English Language
Training for Officials (ELTO), young business leader
exchanges, safe vegetable production in Viet Nam,
and an initiative to reduce Foot and Mouth Disease
in Laos and Myanmar.
New Zealand also commemorated the 40th
anniversary by presenting awards to 40 people
who have made an outstanding contribution
Opening of the
New Zealand
Mission to ASEAN.
L-R Stephanie Lee,
Ambassador to
ASEAN; Hon Tim
Groser , Minister
of Trade; I Gusti
Agung Weska
Puja, DirectorGeneral ASEAN
Cooperation,
Indonesian
Ministry of Foreign
Affairs; Vongthep
Artakaivalvatee,
ASEAN Deputy
Secretary-General.
to developing relations between the ten ASEAN
countries and New Zealand. Awards ceremonies
were held in each of the ten ASEAN countries.
We have growing trade ties underpinned by
the solid foundation of the ASEAN, Australia,
New Zealand Free Trade Agreement. ASEAN now
accounts for 13 percent of our total trade.
Our people-to-people links are strong. Last year we
welcomed more than 140,000 tourists from ASEAN
countries to New Zealand. More than 168,000 New
Zealanders visited ASEAN. More than 12,000 students
from ASEAN study in New Zealand.
ASEAN nations are home to 625 million people and
by 2030 GDP is expected to grow to US$5.2 trillion.
The 10 ASEAN nations are Brunei Darussalam,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand and Viet Nam.
OBJECTIVE 4
20
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 4:
Maximise the impact of New Zealand’s
engagement in improving the prosperity,
stability, and resilience of the Pacific Islands
region and its people
During 2015-16, we worked to deepen our leadership
role in the Pacific, and helped Pacific partners
to better harness opportunities for increased
prosperity, and to build resilience and stability.
Over the 2015-2019 period, we will know that we
are successful when:
• The Pacific Islands Forum, and its dialogue
process, becomes more tightly focused in its
agenda
• Licence returns from fisheries double to
approximately $500 million
• New Zealand supports Papua New Guinea to
host a successful APEC 2018
• A process is in place for determining the future
status of Bougainville
• The PACER Plus Agreement is concluded,
ratified, and being implemented by 2019.
New Zealand’s active support for a framework for
Pacific regionalism brought greater focus to the
leaders’ agenda for the Pacific Islands Forum, held
in September 2015. One of the key regional priorities
set by leaders and fisheries ministers was to
increase the sustainable returns from fisheries.
We engaged with key regional contacts to develop
policy and explore new investments in fisheries.
New Zealand hosted a Pacific Fisheries Ministers
and Officials Study Tour in April 2016, which was
instrumental in setting a new direction for the
region’s fisheries. During the year, New Zealand
committed $50 million of funding over three
years to support progress towards catch-based
management and improved fisheries oversight.
New Zealand funding, policy and governance
engagement contributed to the Forum Fisheries
Agency (FFA) supporting Pacific Island countries
to make the most from sustainable fisheries. This
included playing a role in supporting Pacific Island
countries to increase their returns from foreign
fishing licences. The Parties to the Nauru Agreement
members set and then steadily increased the
benchmark prices for purse seine vessel days. The
FFA forecast an estimated US$380 million revenue
from foreign fishing licenses in the 2015 calendar
year, making good progress towards the four-year
target of US$500 million. In addition, the FFA directly
contributed to generating US$28 million of new
investment in Pacific Island fisheries sectors.
Our aid focus remained on supporting sustainable
economic development activity, strengthening
security and governance, and responding
to humanitarian needs. Sixty percent ($322
million) of the New Zealand Aid Programme’s
funding was spent in the Pacific. We continue
to deliver results through influencing policy, aid
programme investments, regional cooperation and
humanitarian interventions.
In June 2016, Foreign Minister Murray McCully and
the European Commissioner for International
Cooperation and Development, Neven Mimica,
led a joint mission to Papua New Guinea, Vanuatu,
Kiribati and Tuvalu. The mission deepened
New Zealand’s development partnership and
relationship with the European Union through
jointly taking stock of progress across the region
and exploring and identifying areas of cooperation.
The mission also provided an opportunity for
Climate Change Issues Minister Paula Bennett,
who also participated, to connect with her Pacific
counterparts and engage with them on an issue
that is topmost in Pacific leaders’ minds.
The New Zealand-European Union sustainable
energy partnership was further enhanced through
the subsequent co-hosting of the Pacific Energy
Conference on 7 June 2016. This resulted in over $1
billion committed by donors to sustainable energy
projects (see accompanying case study).
OBJECTIVE 4
New Zealand’s energy focus was on the private
sector in Polynesia and Fiji, and increasing access
in Melanesia – starting with scoping missions in
Papua New Guinea and the Solomon Islands. Our
joint project with United Arab Emirates to build
a 1 megawatt (MW) photovoltaic system in the
Solomon Islands proceeded from identification
into implementation, with completion due by the
end of 2016. In June we began a project in Kiribati
to upgrade an ageing and unsafe electricity
network. New Zealand’s support for the Secretariat
of the Pacific Regional Environment Programme
based in Apia, Samoa contributed to savings
of more than 30 percent of MW hours across
greenhouse gas abatement projects, as well as the
installation of 2.2 MW of renewable energy capacity.
During 2015-16, we commenced scoping and
design of a number of activities for our new
Information and Communications Technology
(ICT) investment priority. Of particular note is the
Pacific Connectivity Project, which aims to deliver
increased connectivity for the Cook Islands, Niue
and Tokelau through investment in submarine cable
and satellite technology. Other activities focus on
increasing connectivity in Tuvalu, as well as working
with the University of the South Pacific on the ICT
network design for connecting campuses across the
region.
New Zealand has also provided support to Pacific
countries to achieve increased incomes and
employment from agriculture and tourism. We are
designing and undertaking activities focused on
increasing economic and food security benefits
from agriculture in Vanuatu, Papua New Guinea,
Fiji and Tonga, with support from the Ministry for
Primary Industries (MPI) and, in the latter case, the
Growers’ Federation of Tonga. We also revised our
Pacific Biosecurity memorandum of understanding
(MOU) with MPI, with a new MOU entering into force
in May 2016. We worked closely with the Australian
Pacific Horticultural and Agricultural Market Access
programme in Tonga, Vanuatu and Samoa.
New Zealand’s support for tourism development
was focused primarily on growing tourism demand
and increasing local value to drive a step-change
in growth. Two-thirds of the total budget was
committed to four infrastructure projects: the
Matavai Resort expansion in Niue; the Munda
airport development in the Solomon Islands;
and development of waterfront districts in Apia,
Samoa and Port Vila, Vanuatu. Our tourism sector
support programmes included supporting product
development, destination marketing and workforce
MINISTRY OF FOREIGN AFFAIRS AND TRADE
skills development in Niue, Samoa and Vanuatu.
Our support for tourism extended beyond direct
tourism-related activities, for example, general
budget support payments to the Cook Islands were
linked to tourism development milestones.
As part of rebuilding our engagement with Fiji,
we coordinated a well-executed response by
New Zealand in the aftermath of Tropical Cyclone
Winston in late February. New Zealand was the
first on the ground in the immediate aftermath and
also committed to long-term recovery, with efforts
focused on Vanua Balavu in the Northern Lau
Group. The Ministry is responsible for the delivery
of $15.4 million of aid that has been committed to
Fiji since Cyclone Winston. $5.4 million of this was
for the emergency response, and resulted in more
than 500 personnel, over 450 tonnes of emergency
aid supplies, and deployment of significant New
Zealand Defence Force assets. A further $10 million
is going to a recovery package to rebuild critical
infrastructure.
The Ministry coordinated a programme of senior
official, military and ministerial engagements
with Fiji across a range of sectors. Ministerial
visits included the Minister of Foreign Affairs, the
Minister of Defence and the Minister of Trade. These
culminated in the first visit by a New Zealand Prime
Minister in 10 years, in June 2016. New Zealand has
demonstrated it is willing to re-engage with the
Fijian Government. We have seen the quality of
policy engagements improve in the year and new
areas of cooperation are opening up.
In recognition of Papua New Guinea’s influence
in the region, and its potential to be a significant
economic player, the Ministry undertook a range
of initiatives to develop our bilateral relationship.
A new trade commissioner started in Port Moresby
in September 2015, and a special adviser in MFAT
increased New Zealand’s engagement and support
to Papua New Guinea in the lead-up to APEC 2018.
The Ministry hosted a senior delegation from
Papua New Guinea as part of the Pacific Fisheries
study tour. We also provided a third rotation of
foreign service training to the Papua New Guinea
Department of Foreign Affairs.
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OBJECTIVE 4
22
With a date for a referendum on Bougainville’s
constitutional status now nominally set for
2019, our High Commission in Port Moresby is
deepening its engagement with members of the
Autonomous Bougainville Government, as well as
with stakeholders in Bougainville and Port Moresby.
We have provided funding for the New Zealand
Electoral Commission to engage with the Papua
New Guinea Electoral Commission and the Office
of the Bougainville Electoral Commission. This will
enable support to both agencies in the lead up to
the referendum.
Good progress was made this year with
negotiations on the Pacific Agreement on Closer
Economic Relations Plus (PACER Plus) being
developed between members of the Pacific
Islands Forum. We moved closer to concluding
negotiations, including an Economic Cooperation
and Development Assistance Chapter. We laid the
groundwork for a meeting of forum trade ministers
in August 2016. Pilot labour mobility initiatives
were developed for fisheries and Canterbury trades
during the year.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
The Ministry has aimed to support Pacific partners
to adapt to climate change and reduce disaster
risks, and to strengthen New Zealand’s Pacific
disaster response and recovery mechanisms.
Capability building programmes with National
Disaster Management Offices in Tonga, Tokelau,
Samoa, Niue and the Cook Islands progressed, with
detailed work plans being worked through.
The establishment of the New Zealand Institute of
Pacific Research (NZIPR) and Pacific Broadcasting
Initiative were important initiatives that will project
New Zealand’s visibility in the region and create
a centre of excellence for Pacific knowledge. The
Ministry invested $7.5 million over five years in the
NZIPR. The Institute will deliver timely and practical
research that feeds into solutions and practical tools
to make the Pacific prosperous, safe and self-reliant.
The Ministry invested $0.9 million in 2015-16 into the
new broadcasting initiative. This was launched by
the Prime Minister in September 2015 and will see
more New Zealand television content and sports
coverage provided to the Pacific free of charge.
OBJECTIVE 4
MINISTRY OF FOREIGN AFFAIRS AND TRADE
23
Case study:
Over $1 billion pledged to Pacific sustainable
energy projects
A Pacific Energy Conference co-hosted by New
Zealand and the European Union (EU) on 7 June 2016
in Auckland resulted in over $1 billion committed by
donors to sustainable energy projects in the Pacific.
The one-day event brought together leaders from
across the Pacific, along with representatives from
donors and private sector organisations around the
world.
New Zealand committed $100 million between
2018 and 2024 to new projects in nine countries.
Other investors included the EU, the Asian
Development Bank, the World Bank Group, Japan,
the United Arab Emirates and Australia. The
World Bank Group committed US$340 million. The
Asian Development Bank plans to invest US$303
million. The UAE committed $50 million. The EU
committed another EUR 39 million to the EUR 82
million invested since 2013.
The conference built on the success of the Pacific
Energy Summit in 2013, also co-hosted by New
Zealand and the EU. The 2013 Summit kick-started
wide-scale international investment in energy in
the Pacific, and has resulted in over $900 million of
investment in over 70 energy projects completed or
being developed across the region.
As a result of the commitments made at the 2016
conference and the 2013 summit, by 2024 over a
million more people will have access to clean and
reliable electricity for the first time. Renewable
electricity in Polynesia4 will be increased to 50
percent or higher, saving each year over 20 million
litres of diesel and 60,000 tonnes of CO2.
Since 2013, New Zealand and the EU have partnered
to deliver renewable energy projects in Tuvalu,
Samoa, the Cook Islands and Kiribati. At the
conference, New Zealand and the EU signed a Joint
Declaration of Cooperation on a Pacific Partnership
for Sustainable Energy. It signals our commitment
to expand the scope of our close cooperation on
renewable energy to benefit Tonga, Niue, islands in
the northern Pacific and others.
The declaration also paves the way for future
expansion of the successful EU-New Zealand
partnership to areas such as sustainable agriculture
and climate change, in accordance with the
framework established by the Paris Agreement.
Pacific Energy Country Profiles, published for the
conference, summarised the opportunities for, and
progress of, energy projects in each country.
EU Commissioner
for International
Cooperation and
Development,
Mr Neven
Mimica, and New
Zealand Foreign
Minister, Hon
Murray McCully,
signing the EU-NZ
Declaration of
Cooperation:
Pacific Partnership
for Sustainable
Development on 7
June 2016.
4. Samoa, Tonga, Cook Islands, Tuvalu, Tokelau and Niue.
OBJECTIVE 5
24
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 5:
Promote sound international solutions
on climate change, natural resources, and
environmental protection
During 2015-16, we worked with other agencies
to represent New Zealand at global forums to
create smart solutions to global environmental
challenges. These challenges, particularly to the
atmosphere and oceans, require the creation and
implementation of sensible international rules and
frameworks to both protect the environment and
support economic growth.
Over the 2015-2019 period, we will know that we
are successful when:
• A new climate change agreement is concluded
by the globally agreed deadline; it provides
a pathway to lowering emissions and is
consistent with the Government’s objectives
• Estimated number of IUU vessels and number
of whales caught in the Southern Oceans
decline
• A marine protected area in the Ross Sea is
secured
• International efforts intensify to reduce
marine debris and address ocean acidification,
and international agreement is reached on
marine biodiversity.
New Zealand contributed to the conclusion of
a new global agreement on climate change in
Paris in December 2015. The Paris Agreement
sets the world on a path to holding the increase
in global average temperature to well below 2°C
above pre-industrial levels, at the same time
pursuing efforts to limit the temperature increase
to 1.5°C. It also aims to increase the ability to
adapt to climate change and to make finance
flows consistent with low emissions and climateresilient development. All parties will contribute
to this effort, taking account of their national
circumstances. The agreement accommodates
New Zealand’s interests in carbon markets, the
land sector and climate finance, and will provide
a strong platform for our efforts to develop
innovative solutions to agriculture emissions
and to help Pacific countries meet their needs.
Momentum behind ratification of the Paris
Agreement is strong and entry into force well
ahead of 2020 is anticipated (see accompanying
case study).
New Zealand has continued to collaborate closely
with international partners to bring an end to
illegal, unreported and unregulated (IUU) fishing
in the Southern Ocean by disrupting fishing,
the landing and sale of catch, and the business
activities of the owners/operators of Southern
Ocean IUU fishing vessels. At the beginning of
2015, there were six known IUU fishing vessels that
had regularly fished in the Southern Ocean in the
previous five years. By mid-2016 five of those vessels
have either been detained indefinitely in port
(three) or sunk (two). New Zealand has played a role
in the investigations into and ongoing prosecutions
in Spain against the beneficial owners of a number
of these vessels.
The New Zealand Government made clear to the
Government of Japan its deep disappointment in
Japan’s decision to resume special permit whaling
in the Southern Ocean in the 2015-16 season, calling
on Japan to take heed of the 2014 International
Court of Justice decision and international scientific
advice concerning their whaling activities.
New Zealand continued to place importance on
its leadership role in Antarctic governance. At the
annual meeting of Antarctic Treaty members, New
Zealand promoted the development of a common
vision for tourism, co-sponsored a resolution
reaffirming the permanency of a ban on mining in
Antarctica and, with others, adopted the Santiago
Declaration on the Twenty-fifth Anniversary of the
Signing of the Protocol on Environmental Protection
to the Antarctic Treaty.
OBJECTIVE 5
MINISTRY OF FOREIGN AFFAIRS AND TRADE
In the context of the ongoing work towards the
establishment of a Marine Protected Area in
the Ross Sea region of Antarctica, New Zealand
welcomed China’s declared support for a
revised proposal during the 2015 meeting of the
Commission for the Conservation of Antarctic
Marine Living Resources.
New Zealand is participating in negotiations for a
new legally binding instrument for the conservation
and sustainable use of marine biological diversity
beyond areas of national jurisdiction, under the
United Nations Convention on the Law of the Sea.
The first preparatory committee discussions have
taken place and good progress is being made.
In partnership with the Secretariat of the Pacific
Community, the University of the South Pacific and
the Principality of Monaco, New Zealand launched a
$1.8 million four-year project led by the Secretariat
of the Pacific Regional Environment Programme to
help build the resilience of Pacific Island countries
and territories to the impacts of ocean acidification.
A regional vulnerability assessment has been
completed and published, and pilot sites in Tokelau,
Kiribati, Vanuatu and Fiji are being identified.
Supporting Pacific Island countries to make the
most from their fisheries contributes to both
objectives 4 and 5 of the Ministry’s strategic
framework. Information on this deliverable is
included under objective 4 on page 20.
25
OBJECTIVE 5
26
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Case study:
New Zealand signs Paris Agreement
Climate Change Minister Paula Bennett signed the
historic Paris Agreement on Climate Change on
behalf of New Zealand at the United Nations in
New York on 22 April 2016. The agreement was
concluded at the twenty-first Conference of
Parties (COP21) to the United Nations Framework
Convention on Climate Change (UNFCCC) in Paris
on 12 December 2015.
legal footing. The intended nationally determined
contributions pledged under the agreement cover
189 countries responsible for 99 percent of global
emissions.
More than 170 countries have already signed the
agreement and UNFCCC Parties will continue to
work together to flesh out its operational details.
New Zealand played an active
and constructive role in the
lead-up to COP21, and was able
to influence the architecture
of the agreement in a number
of critical areas.
We convened a series
of so-called ‘blue skies’
dialogues, bringing a
group of international lead
negotiators to Auckland each
year to workshop key issues
in the negotiations. These
frank exchanges saw ideas
formulated that found their
way into the Paris outcome.
New Zealand Minister for Climate Change Issues, Hon Paula Bennet, signing the Paris Agreement on
Climate Change at the United Nations on 22 April 2016. Photo: UN Photo/Amanda Voisard.
New Zealand spearheaded an initiative via the
‘Friends of Fossil Fuel Subsidy Reform’ resulting
in a communique endorsed by 40 governments
calling for accelerated action to phase out inefficient
fossil fuel subsidies (which total around US$500
billion globally each year). Prime Minister John Key
delivered the communique to UNFCCC Executive
Secretary Christiana Figueres at a high-level event
during Leaders’ Day at the Paris COP.
New Zealand also secured support from 18 countries
for a Ministerial declaration on carbon markets,
which was launched at the closing plenary in Paris.
These 18 countries are now working together to
ensure there is an effective and liquid international
carbon market, operating with environmental
integrity.
We also drew global attention to the issues around
climate change and agriculture, with then Climate
Change Issues Minister, Tim Groser, delivering
keynote addresses and speaking as a panellist at
numerous high-level international events.
The agreement strengthens the global response
to climate change and aims to hold the increase
in average global temperature to well below 2°C
above pre-industrial levels, at the same time
striving to limit increases to 1.5°C. It ensures, for
the first time, that all countries will contribute to
the global response on climate change on an equal
Alongside this, New Zealand will complete the
domestic processes required for its ratification by
the end of 2016.
The New Zealand Government has announced
an ambitious target of reducing greenhouse gas
emissions to 30 percent below 2005 levels, by
2030. New Zealand’s current target is to reduce
greenhouse gas emissions to 5 percent below 1990
levels by 2020.
New Zealand will also continue to be part of the
international effort to provide and mobilise climate
finance. At COP21, the Prime Minister announced
New Zealand’s intention to contribute up to $200
million in climate-related support over the next four
years, mainly to support clean energy and climateresilience in Pacific Island countries.
This is on top of over $100 million committed to
solar energy projects across eight Pacific Island
countries since 2013.
In May 2016, former New Zealand Climate Change
Ambassador Jo Tyndall was elected co-chair of the
newly established Ad Hoc Working Group on the
Paris Agreement (APA).
The APA will develop the rules and guidelines for
the effective implementation of the Paris Agreement
once it enters into force.
OBJECTIVE 6
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 6:
Protect and advance New Zealand’s and
New Zealanders’ security
During 2015-16, the Ministry worked to secure
New Zealand and the safety of New Zealanders
by working domestically and internationally to
address a broad range of security threats, including
threats from global terrorism, increased targeting
of New Zealand by people smugglers, and a rapidly
growing occurrence of sophisticated cyber-attacks.
Over the 2015-2019 period, we will know that we
are successful when:
• New Zealand delivers successful counterterrorism and radicalisation capacity-building
initiatives, targeted at reducing the terror
threat level in the Asia-Pacific
• New Zealand’s positions and interests are
reflected in international policy settings on
counter-terrorism and radicalisation
• The number of New Zealanders registered on
the Ministry’s SafeTravel website has increased
and we are well prepared to provide consular
assistance at major international events where
New Zealanders gather
• An effective secretariat for the Arms Trade
Treaty is in place, which supports governance,
rules of procedure, and global implementation
of this treaty.
New Zealand has approached the complex set of
challenges posed by global terrorism on multiple
levels. We have worked as a member of the UNSC
and chaired the Council’s ISIL, Al-Qaida and the
Taleban sanctions committees. We have been
an active member of the global counter-terrorist
financing body, the Financial Action Task Force. New
Zealand is also a member of the Global Counter-ISIL
Coalition, including its working groups on foreign
terrorist fighters and counter-terrorism financing.
This is where our efforts can most effectively
target the financial and human resources that ISIL
depends on for its existence.
We have supported the joint Australia-New Zealand
Building Partner Capacity Mission in Iraq. Over
7,000 Iraq Army personnel have now been trained
and four junior leadership courses delivered by
New Zealand Defence Force personnel, supported
by the New Zealand Embassy in Baghdad. The
military deployment and resources for the Embassy
were extended this year to 2018. New Zealandtrained Iraqi military personnel are now playing a
significant role in defeating ISIL in Iraq. New Zealand
has also contributed $23.9 million in financial
assistance over the past five years, in recognition of
the humanitarian crisis in the region, including most
recently a $1.4 million contribution to help rebuild
communities damaged by fighting in Iraq.
Closer to home, New Zealand is working to boost
counter-terrorism capability and capacity in the
Pacific and South East Asia. Through the Ministry’s
Pacific and Global Security Funds, New Zealand
has contributed to a range of security-related
initiatives over the past 12 months. This has
included funding community policing programmes
to train Indonesian frontline law enforcement staff
in approaches to countering violent extremism.
We have funded aviation security and counterImprovised Explosive Device workshops at the
Kuala Lumpur-based South East Asia Regional
Centre for Counter-Terrorism. We have funded
research into the impact of terrorism on a range of
different groups in South East Asia.
We have also assisted with a comprehensive
review of the implementation of counter-terrorism
resolutions in South East Asia by the UN. Our
appointment in January 2016 of an Ambassador
for Counter-Terrorism has facilitated an expansion
in our diplomatic engagement with partners and
important international counter-terrorism forums
and will contribute further to national, regional and
international counter-terrorism efforts.
This multi-tiered approach means that we are well
placed to influence international policy settings
and to contribute in a meaningful way at all levels.
In addition to the deployment in Iraq, we have
supported the extension of mandates for
New Zealand peace support commitments in
Afghanistan, South Korea and the Sinai.
The challenges posed by irregular migration,
including people smuggling, are complex and
multi-dimensional. This year we have continued to
27
OBJECTIVE 6
28
work with partners to counter the security and
humanitarian threats posed by criminal people
smugglers and human traffickers who target the
vulnerable.
At a regional level, New Zealand continues to play
an active role in the forum on the Bali Process
on People Smuggling, Trafficking in Persons and
Related Transnational Organised Crime. Supported
by MFAT, the Ministry of Business, Innovation
and Employment (MBIE) has established and cochaired the Working Group on Disruption, with Sri
Lanka. As part of this, New Zealand led a first-ever
and highly successful Joint Period of Action (JPA)
from September-October 2015, which focused on
disrupting criminal networks in the region through
separate but coordinated law enforcement
operations. We have also supported regional
capacity-building initiatives on both deterring
and responding to irregular migration, as well
as efforts to encourage dialogue and actions to
address its root causes.
Most cyber security risks to New Zealand
originate from outside our borders. This means
that international cooperation and engagement
on cyber security policy is critical. New Zealand
released its refreshed National Cyber Security
Strategy in December 2015. Under the revised
international cooperation goal, New Zealand
agencies – led by the National Cyber Policy
Office and MFAT – are tasked with protecting
and advancing New Zealand’s interests on
cyberspace issues internationally. This year
we have contributed to this goal by promoting
internet governance and norms of state behaviour
online, by building networks of international
cooperation, by contributing to international
cyber security capability and confidence, and by
working to maximise the economic opportunities
of cyberspace.
Significant cyber security developments this year
include New Zealand funding a cybercrime needs
assessment in the Pacific that is intended to guide
priorities and capacity-building efforts in the
future. A regular cyber dialogue with China was
established in early 2016, which will complement
the range of cyber engagements that New Zealand
has with other countries.
We also played a key role in New Zealand’s broader
national security system. We worked closely in
support of the Ministry of Defence and the New
Zealand Defence Force in delivering the Defence
White Paper 2016, and contributed to the range of
MINISTRY OF FOREIGN AFFAIRS AND TRADE
reviews and initiatives involving the New Zealand
Intelligence Community.
Commercial interest in outer space activities
in New Zealand has increased and progressed
significantly this past year. Alongside other
government agencies, including MBIE as the lead
space policy agency, we were heavily involved in
developing policy and international cooperation
to best-position New Zealand to take advantage
of the space economy, while also ensuring New
Zealand’s security interests are advanced.
We led the successful negotiation and signature
of a Technology Safeguards Agreement (TSA) with
the United States. This will enable the use and
secure management of United States rocket and
satellite technology in New Zealand, while also
protecting New Zealand’s national and security
interests. The TSA reinforces New Zealand’s
reputation for supporting international arms
control and counter proliferation.
Other developments include an application to join
the United Nations Committee on the Peaceful Uses
of Outer Space and progress towards accession
to the United Nations Convention on Registration
of Objects Launched into Outer Space. We also
contributed to the drafting of the proposed Outer
Space and High Altitude Activities Bill.
New Zealand has been particularly active on
nuclear security issues this year, with Prime
Minister John Key representing New Zealand at the
fourth Nuclear Security Summit held in Washington
in March 2016 (see accompanying case study).
New Zealand continued its two-year terms as a
member of the governing bodies of two major
non-proliferation and arms control agencies,
which amplified New Zealand’s voice in decisions
and usefully supported our UNSC membership.
New Zealand was on the Organisation for the
Prohibition of Chemical Weapons’ Executive
Council until May 2016, and is a member of the
International Atomic Energy Agency’s Board of
Governors until September 2016.
New Zealand took its turn as President of the
Geneva-based Conference on Disarmament (CD)
over August-September 2015. As the final President
for the 2015 year, New Zealand’s primary task was
to prepare and forge consensus on the CD’s annual
report and also to shepherd through its annual
resolution at the UN General Assembly.
OBJECTIVE 6
New Zealand was an active participant in a number
of international disarmament-related meetings
held throughout the year. These included important
discussions on nuclear disarmament (in the new
Open-Ended Working Group ‘Taking Forward
Multilateral Nuclear Disarmament Negotiations’).
We were a member of the Bureau for the first
Review Conference of the Cluster Munitions. We
were at the First Conference of States Parties (CSP1)
of the Arms Trade Treaty, where New Zealand was
selected as Vice-President for Asia/Pacific for CSP2.
New Zealand is continuing its leadership role on
efforts to implement and universalise the Treaty
(including through promotion of our ATT Model
Legislation). During this past year, New Zealand
provided both reports due from MFAT in 2016
including our first annual report on arms flows into
and out of New Zealand.
New Zealand has been an active participant in
the Nuclear Suppliers Group discussions about
broadening membership to include countries
that have not ratified the key Nuclear NonProliferation Treaty.
The Ministry is responsible for assisting New
Zealanders in distress overseas, including in the
event of a large-scale emergency, by providing
24/7 high-quality consular services. This includes
management of individual cases when New
Zealanders find themselves in difficulty, or in
responding to a major offshore incident.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
During 2015-16, we provided consular services,
advice and support to 2,751 New Zealanders
overseas. We responded to general consular
enquiries from a further 46,706 New Zealanders.
We provided a consular response to several major
incidents during the year: terrorism-related
attacks in Bangkok, Paris, Jakarta, Brussels and
Istanbul, as well as Tropical Cyclone Winston in Fiji.
In all cases, the safety and well-being of a number
of New Zealanders in these locations were quickly
confirmed. Advice and support were also provided.
In 2015-16, 55,118 New Zealanders travelling
or living overseas registered on the SafeTravel
website. We have an ongoing targeted SafeTravel
outreach programme including increased
engagement with the media, travel industry,
airlines, insurance companies and international
sporting bodies. In March 2016, SafeTravel was
launched on Facebook, immediately attracting a
high number of followers.
This year 82 percent of our consular clients
surveyed were satisfied with the quality of the
advice and support they received – and 78 percent
said it exceeded their expectations.
29
OBJECTIVE 6
30
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Case study:
Contributing to advancing global nuclear security
The fourth Nuclear Security Summit held in
Washington in March 2016 provided a focus for
New Zealand’s contribution to help keep the world
safe from nuclear war, terrorism and accidents.
Prime Minister John Key represented New Zealand,
as he has at the previous three summits, along with
more than 50 leaders of other nations.
At the summit, New Zealand was able to highlight
some of our own efforts over the last year to
advancing global nuclear security objectives. These
included:
• Ratification of the 2005 Amendment to the
Convention on Physical Protection of Nuclear
Materials. This sets obligations for states to
secure their civilian nuclear material – in use,
storage or transport – in a manner consistent
with International Atomic Energy Agency
guidance.
• For New Zealand to be able to ratify the
amendment, it needed to review its 50-year-old
legislation dealing with the safety and security
of nuclear and radioactive material. It enacted
the Radiation Safety Act (2016) and implemented
a Code of Practice for the Security of Radioactive
Material. The Ministry of Health led this work
while we helped with international aspects.
Most of the radioactive material in New Zealand
is held for medical and industrial measuring
uses. By international standards, New Zealand
holds very small amounts of radioactive
material but we take its security very seriously.
• New Zealand also ratified the International
Convention for the Suppression of Acts of
Nuclear Terrorism, which requires states to
criminalise the planning, threatening, or
carrying out acts of nuclear terrorism.
• We hosted New Zealand’s first peer review
mission from the International Atomic Energy
Agency, to provide advice and to ensure that
New Zealand’s radioactive material is secured in
accordance with international best practice.
• We also made a contribution to suppressing acts
of nuclear terrorism by hosting a successful
Proliferation Security Initiative exercise –
Exercise Maru 2015. More than 130 participants
from 25 countries attended the exercise, which
focused on what steps countries with limited
resources and capacity can take to intercept
weapons of mass destruction and their
components. These steps include improving
customs procedures, establishing national plans
and building effective international networks.
A wide view of the opening session of the Nuclear Security Summit hosted by the United States. Photo: UN Photo/Eskinder Debebe.
OBJECTIVE 7
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Objective 7:
Build robust and enduring organisational
capability to deliver strengthened and
coherent international engagement
During 2015-16, we focused on ensuring the Ministry
has robust and enduring organisational capability
to deliver on our strategic objectives.
A key priority for the Ministry is lifting strategic
performance. Improving strategic performance
focuses on strategic, governance and accountability
issues to ensure that senior leadership team (SLT)
is best able to deliver organisational leadership.
As part of this, the Ministry revised its strategic
and annual planning process around our fouryear objectives. The process ensures SLT has an
organisational view of our work and clear goals,
ensures good alignment between our four-year
objective and divisional plans, and allows resources
to be allocated and prioritised effectively against
our strategic framework.
In February 2016, enhancements were made to
the Ministry’s governance arrangements with
the establishment of three ancillary committees
to support the SLT Board. The new ancillary
committees meet monthly, of which:
• the Strategy and Policy Committee oversees how
we plan to develop and deliver our foreign, trade
and aid policy
• the Coordination and Performance Committee
oversees how we coordinate our effort in the
Ministry and with others to deliver our foreign,
trade and aid policy
• the Resources Committee oversees what
resources we need to develop and deliver our
foreign, trade and aid policy.
During 2015-16, our operating model was adjusted
to strengthen the Ministry and better support
the achievement of our objectives. The roles of
Deputy Chief Executive and Chief of Staff were
established in the Office of the Chief Executive, and
the functions within the Strategy and Governance
Group were realigned with other groups across
the Ministry in August 2015. The establishment of a
Deputy Chief Executive position and an enhanced
Office of the Chief Executive have helped to
reinforce the Ministry’s policy and organisational
leadership capabilities (as shown by the drive
to lift strategic performance, for example), and
strengthened our capacity to engage consistently
with key stakeholders.
A capability review commenced in August 2015
to strengthen the international development
operating model, to ensure the Ministry is best
placed to successfully deliver on the New Zealand
Aid Programme strategic plan, and to enhance
our relationships with customers, partners
and stakeholders. As a result, a new Pacific and
Development Group (PDG) has been established
from 1 August 2016, which is intended to build
closer collaboration between our international
development assistance and our foreign and trade
policy. A new Pacific Branch will also be created
within PDG, to be led by an assistant secretary, with
the aim of becoming a centre of excellence in Pacific
matters.
During the year, we embarked on an initiative
to strengthen a career Ministry. This involved a
process over November-December in which all
parts of the organisation, onshore and offshore,
were invited to share ideas about how we might
best strengthen the career Ministry and make it a
better place to work. As a result, we have developed
a programme that will be delivered over 18 to 24
months to address issues such as diversity, worklife balance, training and development, and career
options for staff.
31
OBJECTIVE 7
32
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Equal employment opportunities
We place a strong emphasis on fostering a diverse
and inclusive workplace. In representing New
Zealand, it is important that we have a diverse
workforce that reflects the cultural diversity of New
Zealand and our role and position in the Pacific.
We are committed to the principle and practice of
equality. We base appointments on merit, while
recognising the employment aspirations of Māori,
Pacific people, ethnic and minority groups, women
and people with disabilities. We ensure fairness in
employment for all persons and groups.
The profile of Ministry staff in New Zealand and
seconded staff as at 30 June 2016 and as recorded in
the HR system is:
Gender
Total
Female
53%
Male
47%
Ethnicity
Total
Asian
2.7%
European
48.8%
Māori
5.3%
Middle Eastern/Latin American/African
0.2%
Other Ethnicity
9.3%
Pacific Peoples
2.2%
Unspecified
31.5%
established for permanent staff returning from
posts as an option for temporary placement while
seeking to secure an ongoing role.
Several initiatives were implemented during the
year to strengthen leadership. We integrated the
Public Sector Leadership Success Profile (LSP) into
the MFAT Capability Framework, and reflected
the profile as part of leaders’ performance and
development plans.
We implemented a talent management approach
for tier 2 and 3 leaders that aligns to State sectorwide talent processes. This will allow us to better
understand our capability strengths and gaps and
to better target development investment, identify
critical roles and undertake succession planning.
We have continued to focus on building
management and leadership capability:
• A second cohort has participated in the
Ministry’s Aspiring Leaders Programme for senior
professionals who aspire to a leadership role as
their next career move.
• A new programme is being implemented for
Ministry staff who are about to go on their first
posting and who will be managing staff.
• We continue to focus on building management
capability through our management
development programme.
• An Unconscious Bias and Inclusive Leadership
programme consisting of workshops, webinars
and resources, is being rolled out to all managers.
The Ministry put in place a health and safety work
programme to both sharpen our commitment to
staff well-being and address the new requirements
of the Health and Safety at Work Act 2015. This is a
comprehensive programme impacting on all parts
of the Ministry onshore and offshore. Through this
programme, frameworks, systems and processes
were introduced to identify and mitigate hazards
and report health and safety incidents. Health and
safety representatives were appointed, training
opportunities provided to managers and staff, and
brochures were given to all staff in New Zealand
and at posts. A stocktake of progress against the 2012 language
training review was undertaken and a number of
actions identified to enhance language capability.
During the year, the Ministry made the rotational
system more fluid by making a number of practical
changes to address some of the issues hindering the
movement of staff between onshore and offshore
roles. This included providing more certainty that
those going on posting will have a meaningful
role on their return. Special Adviser roles were
We strengthened links with Māori business
including through the Māori business winter
lecture series. The work we commissioned to raise
awareness of the Māori economy and Māori culture
and values is now informing the content of the
MFAT-Māori policy engagement workshops.
We have also continued to enhance and embed
the Foundations Programme by adding additional
courses and modules and opening the programme
to all staff.
We continued to invest in building the capability of
our staff to effectively represent Māori interests
offshore. About 18 percent of Ministry staff have
now participated in the Te Reo Māori programme
delivered by Whitireia Polytechnic. OBJECTIVE 7
In April-May 2016, we conducted our employee
engagement survey. Over 83 percent of staff
participated in the survey. The results show
engagement in the Ministry has continued to rise
over the last two years, with the engagement
index at 72.8 percent. This is an increase on the
2015 result of 70.5 percent, and significantly above
the State sector benchmark of 67.4 percent for
2016. The employee engagement profile shows the
percentage of employees at the Ministry who are
considered engaged, ambivalent or disengaged. The
level of engagement has increased to 25.8 percent.
This is an increase on the 2015 result of 22.3 percent,
and above the State sector benchmark of 18.2
percent for 2016.
We continued to lead NZ Inc cross-agency work
and an integrated NZ Inc approach, offshore and
onshore. We commenced a process to refresh the NZ
Inc country strategies for China, India and Australia.
The Ministry and NZTE implemented a new initiative
to enhance the delivery of ministerial trade
missions by the Ministry, NZTE and other NZ Inc
agencies. The NZ Inc Missions Governance Group
was established to promote an environment that
will enable NZ Inc agencies to deliver consistently
world-class ministerial trade missions that create
the conditions and connections for international
growth. The group has developed an agreed
approach, operating principles and structure,
process map and other tools to support NZ Inc
agencies’ delivery of ministerial trade missions with
an accompanying business delegation.
The Ministry also established an NZ Inc Senior
Reference Group, which comprises selected tier 2
managers from across our NZ Inc partner agencies.
This group is overseeing a programme in support
of cross-agency performance alignment across the
offshore network. This programme spans topics
from improvements to the overall NZ Inc operating
model (including service performance) through to
forward footprint planning.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
During 2015-16, we delivered a programme of
more than 100 inbound and outward visits plus
numerous events of varying scale and complexity,
including six official visits by a Head of State or
Head of Government to New Zealand in support
of the Government’s strategic foreign policy
objectives.
Significant events hosted by the Ministry in 2015-16
included the signing of the TPP and associated
domestic roadshow and hui programme throughout
New Zealand. We also hosted a RCEP negotiating
round and the Pacific Energy Conference.
The Ministry supported participation by the
Prime Minister and Government Ministers in
a number of international fora including the
Pacific Island Forum, East Asia Summit, APEC
2015, UN General Assembly (Leaders’ week),
Commonwealth Heads of Government Meeting
2015, World Humanitarian Summit, Paris Climate
Change Conference, Australian/New Zealand
Prime Ministers’ dialogue, and the WW100
commemorations.
The Ministry enhanced systems by implementing
improvements to its web, mobile device
management, UN Handbook and finance
system. Major projects in the New Zealand Aid
Programme management system, expense and
invoice management system, asset information
management system and consular programme have
made good progress.
In the last 12 months, significant property projects
were progressed or completed including:
• Beijing Chancery rebuild
• relocation of the Manila Embassy
• relocation of the Canberra High Commission
(temporary)
• Canberra chancery fence
• Canberra chancery refurbishment
• relocation of Chengdu Consulate.
The Ministry is subject to Cabinet Circular (16) 3 New Zealand Business Number – Implementation Requirements,
which was issued on 25 May 2016 and sets out requirements for us to implement the New Zealand Business Number
(NZBN). NZBN is a universal identifier that will help businesses to easily update, share key information and interact with each
other. This has been introduced to streamline all essential business information, and over time will become the only
number businesses will need to use to interact with a range of other businesses and government agencies.
The Ministry is a tier 3 agency and must implement NZBN requirements by 31 December 2018. This project has been
added to the Ministry’s portfolio of projects and funding has been allocated to advance it during the 2016-17
and 2017-18 financial years.
33
OBJECTIVE 7
34
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Case study:
Digital strategy comes to fruition
In 2013 we began developing a digital
communications strategy to improve our digital
footprint and build capability and staff confidence
in using social media. The strategy includes our web
and social media presence.
The strategy is based on change that needs to occur
across the entire Ministry in an age that is governed
by digital technology and communications. It
unfolds across three interconnected phases: the
need to build guidelines, processes, platforms and
training opportunities to give our people confidence
and opportunity to communicate; the need to
understand digital data to understand better the
world we are working in; and the need to stretch
ourselves into new digital areas.
During 2015-16, we made significant inroads into the
first of these three phases. The Ministry now has
41 Facebook accounts, 39 Twitter accounts, three
Instagram accounts and – based in China – two
WeChat and one Weibo accounts, operated by our
staff around the world. We have a varied training
programme allowing staff to access online learning
as well as participate in regional seminars.
Part of our strategy is that staff interactions in
social media align with – and amplify – the New
Zealand values that are central to our reputation as
a nation. These values include openness, fairness,
integrity, representing the voice of small countries,
accessibility, honesty and the Māori concept of
kaitiakitanga or stewardship. We look for areas
of reciprocity and connectivity – where joint
interests lie – and try to nuture relationships. These
values underpinned our bid for non-permanent
membership on the UN Security Council, and
are consistent with our actions in a range of
international forums. Two social media campaigns
have had these values at their core: one supporting
Helen Clark’s bid for the UN Secretary-General,
another promoting Māori culture.
Our web presence has been consolidated this year.
We had 57 separate websites on different technical
platforms and brought all but four together on the
same platform, easily accessible on mobile and at
one site: www.mfat.govt.nz. SafeTravel remains a
separate site as it has a specific brand, purpose, and
audience. The content on our main site has been
updated and written in plain English so that the
Ministry’s role and work can be clearly understood
by non-specialist audiences.
A new online tariff finder was also developed to
help New Zealand businesses search all our trade
agreements for information on tariffs in different
countries at https://tariff-finder.fta.govt.nz/.
During the last year, we selected a social media
monitoring tool, to scan all the publicly available
digital data we may be interested in across social
media, forums, blogs and daily news content
allowing us to analyse more effectively the impact
of our work and monitor any relevant issues that
may arise.
Image of MFAT’s web page.
Developing our connectivity in the digital world
has enhanced our collaboration with other
organisations, which includes regular meetings
with other NZ Inc agencies to align our digital
activities and share our expertise. Foreign
ministries from a number of other countries have
been early adopters of social media and we are
benefiting from their experience, and in turn
sharing our experiences with them.
STATEMENT OF RESPONSIBILITY
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Responsibility
I am responsible, as Chief Executive of the Ministry of Foreign Affairs and Trade (the Ministry), for:
• the preparation of the Ministry’s financial statements, and statements of expenses and capital
expenditure, and for the judgements expressed in them;
• having in place a system of internal control designed to provide reasonable assurance as to the integrity
and reliability of financial reporting;
• ensuring that end-of-year performance information on each appropriation administered by the Ministry
is provided in accordance with sections 19A to 19C of the Public Finance Act 1989, whether or not that
information is included in this annual report; and
• the accuracy of any end-of-year performance information prepared by the Ministry, whether or not that
information is included in the annual report.
In my opinion:
• the financial statements fairly reflect the financial position of the Ministry as at 30 June 2016 and its
operations for the year ended on that date; and
• the forecast financial statements fairly reflect the forecast financial position of the Ministry as at 30 June
2017 and its operations for the year ending on that date.
Brook Barrington
Chief Executive
30 September 2016
35
STATEMENT OF PERFORMANCE
36
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of performance
The Minister of Foreign Affairs purchased from us provision of the following eight output expenses in Vote
Foreign Affairs and Trade, and one output expense in Vote Official Development Assistance:
Vote Foreign Affairs and Trade
• Administration of diplomatic privileges and immunities
• Consular services
• Pacific Security Fund
• Policy advice and representation – international institutions
• Policy advice and representation – other countries
• Policy advice and representation – other countries PLA
• Promotional activities – other countries
• Services for other New Zealand agencies overseas
Vote Official Development Assistance
• Management of New Zealand Official Development Assistance
In addition, the Ministry has a capital expenditure appropriation for the purchase of assets by and for the
use of the Ministry.
The following statement of performance records results and services delivered for each of the above
output expenses as agreed between the Minister of Foreign Affairs and the Secretary of Foreign Affairs
and Trade in the Strategic Intentions 2015-2019 and the 2015-16 Estimates (and Supplementary Estimates) of
Appropriations as required by section 19C of the Public Finance Act 1989.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Administration of diplomatic privileges and immunities
37
This output expense involves the administration of the Government’s responsibilities and obligations under
the Diplomatic Privileges and Immunities Act 1968 and the Consular Privileges and Immunities Act 1971,
which give effect to the 1961 Vienna Convention on Diplomatic Relations and the 1963 Vienna Convention
on Consular Relations.
Services we provided included the:
• administration and facilitation of privileges and immunities to members of the diplomatic and consular
corps and their dependants
• resolution of immunity issues arising under the Vienna Conventions on Diplomatic and Consular
relations
• facilitation, documentation, and formalities for the appointment of diplomatic and consular staff of
foreign missions and consular posts accredited to New Zealand
• provision of host government services to the diplomatic and consular corps
• provision of advice to Ministers, diplomatic missions, government agencies and other parties regarding
the interpretation and application of diplomatic and consular privileges and immunities in New Zealand.
2015-16
Budget
standard
Performance measures
2014-15
Actual
standard
Actual
standard
1595
164
New measure
Number of foreign diplomatic and consular staff (and their
dependents) resident in New Zealand
1,2026
1,358
New measure
Percentage of relevant formal New Zealand appointment
documentation prepared in compliance with the Diplomatic
Privileges and Immunities Act 1968 and Consular Privileges and
Immunities Act 1971 and the Vienna Convention on Diplomatic
Relations and the Vienna Convention on Consular Relations
100%
100%
100%
Percentage of arrival and departure documentation for foreign
diplomatic and consular staff resident in New Zealand completed
within 10 working days
95%
96%
94%
Percentage of diplomatic corps respondents satisfied with quality
of diplomatic protocol service (four or above on five point scale)
80%
97%
New measure
800-1,000
1,178
1,052
Number of foreign diplomatic missions and consular posts resident
in New Zealand (including those led by Honorary Consuls or
Honorary Consuls General)
Ministerial services
Number of Ministerial letters prepared
Number of Parliamentary Question responses
200-250
364
374
Number of Official Information Act request (OIA) responses
provided
150-200
307 7
218
Percentage of Ministry OIA requests responded to within statutory
timeframes
90%
79%
Revised
measure
Percentage of Ministerial OIA request replies completed five days
prior to the statutory time limit, unless otherwise agreed
90%
83%
Revised
measure
5. The budget standard for this measure has been corrected from 163 to
159 as at 1 July 2015. MFAT has developed a new system that allows us
to accurately record information. The previous figure was incorrectly
recorded as the new methodology set in.
6. The budget standard for this measure has been corrected from 1,725
to 1,202 as at 1 July 2015. MFAT has developed a new system that
allows us to accurately record information. The previous figure was
incorrectly recorded as the new methodology set in.
7. The Ministry received an increased volume of OIA requests
during 2015-16 that related particularly to the Trans-Pacific
Partnership and Australian detention centres and deportations.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
38
Budget
standard
Performance measures
2014-15
Actual
standard
Actual
standard
Percentage of Ministerial correspondence completed within 15
working days
90%
57% 8
66%
Percentage of Ministerial OIA request responses that are factually
accurate, meet any legislative requirements, and contain no
avoidable errors, measured by rejection rates by the office of each
Minister
95%
95%
90%
20 days
26 days
24 days
4 or above on a
5 point scale
The Minister of
Foreign Affairs
expressed
gratitude for
the support
received from
the Ministry 9
Result
unavailable
at time of
reporting
Average number of days to send final OIA request response to a
requestor (for Ministry OIAs)
Average Ministerial satisfaction score
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
30/06/16
30/06/16
30/06/16
Actual
Actual
Appropriation
Variance
$000
$000
$000
1,638
2,000
362
$000
1,241
Annual appropriations
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $0.362 million between appropriation and actual expenditure is due to an expectation
of increased activity that did not eventuate and the continuation of savings achieved across the Ministry.
Consular services
This output expense concerns the provision of consular and notarial services to New Zealanders
abroad. This includes helping New Zealanders in distress; providing a response capability in
the event of an emergency involving New Zealanders overseas, such as a terrorist incident
or natural disaster; and formally validating documentation for use in other countries.
8. The increased volume and complexity of Ministerial
correspondence processed in 2015-16 had a direct impact on
our ability to achieve our standards. The Ministry continues to
embed new systems to service the high volume of Ministerial
correspondence received.
9. As reported from the Minister of Foreign Affairs address at the
MFAT Leaders' Meeting on 27 May 2016.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
Budget
standard
Performance measures
Number of overseas locations where consular services are provided
2014-15
Actual
standard
39
Actual
standard
65
66
66
2,300-2,700
2,751
2,417
General consular advice enquiries responded to (demand driven)
50,000-60,000
46,706
41,702
Notarial services provided (demand driven)
10,000-12,000
13,704
11,110
3-6
610
7
85%
82%
85%
Distressed New Zealanders overseas who received consular services
(demand driven)
Consular emergencies responded to
Percentage of respondents satisfied with quality of consular services (4 or
above in a 5 point scale)
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
30/06/16
30/06/16
30/06/16
Actual
Actual
Appropriation
Variance
$000
$000
$000
$000
18,284
18,286
2
18,232
Annual appropriations
Pacific Security Fund
This output expense supports the implementation of New Zealand’s Pacific Security Strategy. The Pacific
Security Fund (PSF) is a $2.7 million contestable inter-agency fund, which we administer. The fund is
drawn on by government departments and agencies to meet the cost of activities that advance or protect
New Zealand’s security interests, by reducing risks from threats arising in or operating through Pacific
island countries.
2015-16
Budget
standard
Performance measures
2014-15
Actual
standard
Actual
standard
All project bids and evaluations are assessed as consistent with
Government objectives for the Pacific Security Fund, and this is confirmed
by independent annual audit
100%
100%
100%
Funds are accessed, disbursed and monitored in accordance with the
management process established by the Pacific Security Coordinating
Committee
100%
100%
100%
Independent assessments of at least one project over $100,000 finds that
they were successful in achieving the majority of their objectives
100%
100%
100%11
10. The Ministry provided consular response to several major incidents
during the year: terrorism-related attacks in Bangkok, Paris,
Jakarta, Brussels and Istanbul, as well as Tropical Cyclone Winston
in Fiji.
11. This was reported in the 2014-15 Annual Report as “assessment is
currently under way and due for completion in September 2015”.
The result has now been updated to reflect the completion of the
assessment.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FINANCIAL PERFORMANCE (figures are GST exclusive)
40
30/06/15
30/06/16
30/06/16
30/06/16
Actual
Actual
Appropriation
Variance
$000
$000
$000
$000
2,396
2,759
363
2,110
Annual appropriations
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $0.363 million between appropriation and actual expenditure was primarily due to
delays in projects where funds had been allocated in the 2015-16 financial year under the PSF’s contestable
funding structure, but not spent.
Policy advice and representation – international institutions
This output expense is concerned with policy advice and representation activities directed to the
management of New Zealand’s membership of, and foreign affairs and trade interests in, international
institutions. This includes major areas of multilateral cooperation to which the Government has decided to
give special attention such as international trade in goods and services, counter-terrorism, disarmament
and arms control, international environment, and human rights issues.
The organisations include:
• the United Nations and its associated institutions
• the World Trade Organization (WTO)
• the Commonwealth and its associated institutions
• the Organisation for Economic Co-operation and Development (OECD)
• Antarctic organisations
• international environmental organisations
• international disarmament organisations.
2015-16
Budget
standard
Performance measures
2014-15
Actual
standard
Actual
standard
Binding international treaties concluded by the Ministry under this output
expense class12
12-15
21
New
measure
Policy submissions produced for Ministers under this output expense class
300-500
441
593
Met
Partially
met 13
Substantially
met
7.5
7.3
7.5
Met
Substantially
met 15
Substantially
met
Outcomes from negotiations favourable for New Zealand and are aligned
with government expectations
Average score out of 10 of a sample of policy papers reviewed by an
external reviewer (New Zealand Institute of Economic Research)14
Research indicates that MFAT is effective at influencing key relationships
and safeguarding our interests
12. Binding international treaties include multilateral, plurilateral
and bilateral treaties. Concluded means signed or, if signature is
not provided for in the treaty, acceded to, adopted, accepted or
ratified.
13. This is based on an aggregate of negotiations-related targets,
tracked through the Ministry’s quarterly performance dashboard,
using the Red, Amber and Green traffic light ratings reported
across the year. The rating scales applied are: Fully Met = 0% Red,
Substantially Met = less than 25% Red, Partially Met = between 25%
and 50% Red, and Not Met = 50% or more Red. The result against
this measure is 25% Red. Red ratings relate to slower than desired
progress on the China FTA upgrade, India FTA and GCC FTA.
14. The review by NZIER uses a 5 point scale ranging from 5 to 9+. The
following interpretation is applied to NZIER’s assessment: 5 – Poor;
6 – Borderline: does the job but with risks; 7 – Adequate; 8 – Good:
goes beyond the task at hand somewhat; 9+ Excellent.
15. This is based on an aggregate of relationship-based targets
tracked through the Ministry’s quarterly performance dashboard,
using the Red, Amber and Green traffic light ratings reported
across the year. The rating scales applied are: Fully Met = 0% Red,
Substantially Met = less than 25% Red, Partially Met = between 25%
and 50% Red, and Not Met = 50% or more Red. The result against
this measure is 11% Red. Excluded from the base of calculation was
a small number of ratings that were not available for assessments.
However, had they been available and were registered as Red in
the worst case scenario, they would not have made a difference
to the overall results of “Substantially Met”. Red ratings relate to
real exports to GDP ratio, and slower than desired progress on the
China FTA upgrade, India FTA and GCC FTA.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FINANCIAL PERFORMANCE (figures are GST exclusive)
41
30/06/15
30/06/16
30/06/16
30/06/16
Actual
Actual
Appropriation
Variance
$000
$000
$000
$000
72,203
72,327
124
66,763
Annual appropriations
Policy advice and representation - other countries
This output expense is concerned with policy advice and representation activities directed towards
the management of New Zealand’s foreign affairs and trade relations with other countries, focusing on
individual country relationships and regional organisations of significance to New Zealand.
2015-16
Budget
standard
Performance measures
2014-15
Actual
standard
Actual
standard
Non-binding arrangements concluded by the Ministry under this output
expense class
35-45
35
New
measure
Inwards visits supported by the Ministry under this output expense class
30-60
32 16
68
Outwards visits by New Zealand Ministers supported by the Ministry under
this output expense class
40-70
74
17
110
Total number of days of outward visits by New Zealand Ministers
supported by the Ministry under this output expense class
200-350
432
New
measure
Policy submissions produced for Ministers under this output expense class
300-500
212
252
Outcomes from negotiations favourable for New Zealand and are aligned
with government expectations
Met
Partially
met 18
Substantially
met
Percentage of visits rated as 4 or better on a scale of 1-5 by internal review
against the Ministry’s visits quality standard for visits management
80%
77%
66% of
criteria and
30% of visits
7.5
7.3
7.5
Met
Substantially
met 19
Substantially
met
Average score out of 10 of a sample of policy papers reviewed by an
external reviewer (NZIER)
Research indicates that MFAT is effective at influencing key relationships
and safeguarding our interests
16. Inward visits are MFAT-led or funded visits including visits by
Heads of States, Foreign Ministers and Trade Ministers. The high
number of visits in the previous year relates to travel for the UNSC
campaign.
17. Outward visits are visits by Head of State, Prime Minister, Cabinet
Ministers, Special Envoys and Parliamentary and Speaker-led
delegations. The high number of visits in the previous year relates
to travel for the UNSC campaign.
18. This is based on an aggregate of negotiations-related targets,
tracked through the Ministry’s quarterly performance dashboard,
using the Red, Amber and Green traffic light ratings reported
across the year. The rating scales applied are: Fully Met = 0% Red,
Substantially Met = less than 25% Red, Partially Met = between 25%
and 50% Red, and Not Met = 50% or more Red. The result against
this measure is 25% Red. Red ratings relate to slower than desired
progress on the China FTA upgrade, India FTA and GCC FTA.
19. This is based on an aggregate of relationship-based targets
tracked through the Ministry’s quarterly performance dashboard,
using the Red, Amber and Green traffic light ratings reported
across the year. The rating scales applied are: Fully Met = 0% Red,
Substantially Met = less than 25% Red, Partially Met = between 25%
and 50% Red, and Not Met = 50% or more Red. The result against
this measure is 11% Red. Excluded from the base of calculation was
a small number of ratings that were not available for assessments.
However, had they been available and were registered as Red in
the worst case scenario, they would not have made a difference
to the overall results of “Substantially Met”. Red ratings relate to
real exports to GDP ratio, and slower than desired progress on the
China FTA upgrade, India FTA and GCC FTA.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FINANCIAL PERFORMANCE (figures are GST exclusive)
42
30/06/15
30/06/16
30/06/16
30/06/16
Actual
Actual
Appropriation
Variance
$000
$000
$000
$000
221,975
228,745
6,770
216,717
Annual appropriations
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $6.770 million between appropriation and actual expenditure was due to the delay
on initiatives where the funding ($4.873 million) will now be carried forward into 2016-17. The remaining
amount relates to the continuation of savings from across the Ministry.
Policy advice and representation - other countries PLA
This output expense is limited to the costs set out in the Foreign Affairs Act 1998, of superannuation for
local staff employed by overseas posts to help with the management of New Zealand’s foreign and trade
relations with other countries.
2015-16
Budget
standard
Performance measures
Actual
standard
Met
New Zealand Government Superannuation Scheme for locally recruited
staff in the United States of America continues to be funded to the
required level by the Crown
2014-15
Actual
standard
Met
Met
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
Actual
$000
12
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
20
20
-
Permanent appropriations
Promotional activities - other countries
This output expense supports the promotion of investment in New Zealand by funding a range of activities
including:
• enhancing the understanding of New Zealand and offshore markets as investment destinations
• demonstrating the Government’s interest in attracting investment to New Zealand and support for
New Zealand industries undertaking overseas direct investment activities
• establishing and maintaining influential overseas investment contacts
• supporting investment-related visits to and from New Zealand
• enabling New Zealand industries to undertake overseas direct investment activities to support their
sustainable growth and international competitiveness.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
Budget
standard
Performance measures
Annual review of fund finds that projects met agreed objectives outlined in
their application
2014-15
Actual
standard
100%
100%
Actual
standard
Revised
measure
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
Actual
$000
72
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
45
175
130
Annual appropriations
Services for other New Zealand agencies overseas
This output expense involves the provision of services to other New Zealand agencies with overseas
interests.
In 2015-16, services were provided to the following departments by our diplomatic and consular posts
overseas:
• Department of Internal Affairs
• Education New Zealand
• Ministry for Primary Industries
• Ministry of Business, Innovation and Employment
• New Zealand Customs Service
• New Zealand Defence Force
• New Zealand Police
• New Zealand Trade and Enterprise
• Tourism New Zealand
• The Treasury.
These services included assistance with staff transfers to and from posts, accommodation management,
general administration such as the provision of receipting and banking facilities, and diplomatic
facilitation. Ministry staff also undertook core agency work on behalf of agencies (for example, issuing
emergency travel documents on behalf of the Department of Internal Affairs and visa processing on behalf
of Immigration New Zealand).
2015-16
Performance measures
Average satisfaction score on the Ministry’s service provision on a five
point scale20
20 Based on surveys of NZ Inc secondees and head office contacts.
Budget
standard
3.5
2014-15
Actual
standard
3.8
Actual
standard
New
measure
43
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FINANCIAL PERFORMANCE (figures are GST exclusive)
44
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
Revenue
Other
7,090
7,786
(696)
7,114
Total revenue
7,090
7,786
(696)
7,149
Expenditure
Annual appropriations
7,187
7,786
599
7,149
Total expenses
7,187
7,786
599
(97)
-
(97)
30/06/15
Actual
$000
7,114
(35)
Net surplus/(deficit)
EXPLANATION OF SIGNIFICANT VARIANCES
The reduced expenditure of $0.599 million between appropriation and actual expenditure was primarily due
to less demand for agency services.
Ministry of Foreign Affairs and Trade - capital expenditure PLA
This appropriation is limited to the purchase or development of assets by and for the use of the Ministry of
Foreign Affairs and Trade, as authorised by section 24(1) of the Public Finance Act 1989.
2015-16
Performance measures
Budgeted standard
Actual standard
Achieved
Achieved
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
1,385
1,500
115
Property, plant
and equipment
29,875
50,673
20,798
Intangibles
10,378
20,789
10,411
Total
41,638
72,962
31,324
Expenditure is in accordance with the
Ministry’s capital expenditure plan
and Global Property Asset Plan
Achieved
2014-15
Actual standard
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
Actual
$000
8,022
40,697
4,255
52,974
Land
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $31.324 million between appropriation and actual expenditure was partly due to $20.913
million in property, plant and equipment arising from timing delays in the rebuild of the Beijing Chancery
and Official Residence, and refurbishment of the Canberra Chancery. In addition there were a number of
smaller property projects that cumulatively each under-spent due to timing delays by amounts of up to
$0.700 million. The remaining under-spend of $10.411 million in Intangibles was due to timing delays with
two significant business system projects and putting on hold one planned business system project.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Management of New Zealand Official Development Assistance
45
This appropriation is limited to advice and representation on international development issues and the
management of the New Zealand Official Development Assistance Programme.
2015-16
Performance measures
Budget standard
2014-15
Actual standard
Actual standard
Quantity
500 or less
Number of activities21
473
515
$450,000 or more
$404,577
$337,058
Volume of Crown ODA resources
allocated to the Pacific bilateral and
regional
$316.77m (58.5%)
$322.2m (60%)
$300.4m (59%)
Amount and proportion of sectorallocable ODA directed primarily to
sustainable economic development
$191.21m (45%)
$167.7m (39%)
$151.0m (37%)
Policy submissions produced for
Ministers under this output expense
class
90-130
100
175
Number of Programme Strategic and
Results Frameworks in place
Increasing number
(Baseline to be set)
5 of 2723
New measure
Percentage of programmes rated 4 or
higher on a scale of 1-5 by review against
the Ministry’s quality standard for
programme management
80%
100%
100%
Percentage of activities rated 4 or higher
on a scale of 1-5 by review against the
Ministry’s quality standard for activity
management
80%
93%
82%
7.5
7.3
7.5
Percentage of the value of ODA delivered
using high order aid modalities24
45% or more
45%
58% or more
Percentage of development cooperation
funding for the partner government
sector disbursed in year for which it was
scheduled (Pacific bilateral programmes
only)
90%
99.9%25
New measure
Median annual activity expense
22
Quality
Average score out of 10 of a sample of
policy papers reviewed by an external
reviewer (NZIER)
21 This figure does not include work on Activities under identification
and design, and are therefore not yet recorded in the Activity
Management System. In 2015-16 we undertook a research project
(Optimal Focus) as part of our work to better understand the
effectiveness of ODA applied across a diverse range of programmes.
The research identified that collective ‘sectoral breadth’ of activities
was a more important marker of effectiveness than the size and
expense of the activity. In light of this new information we will
reconsider the use of this measure, and the ‘median annual activity
expense’ measure, for the 2016-17 year.
23 This result reflects the number of completed and signed-off
Programme Results Frameworks. There are a number of frameworks
in draft that are being used as the basis for the development of new
Country Results Frameworks as we shift our focus to developing
country-level strategies. We will update this measure to reflect this
shift in focus for 2016-17.
22 This is the median annual activity expenditure for all activities
that incurred expenditure during the 2015-16 year. As in prior years,
activities that were in implementation but did not have payments due
under contract were excluded from the calculation.
25 This result reflects the average across all 12 bilateral programmes.
“Government sector” means disbursed in the context of an
agreement with the partner government (Ministry/Department/Local
Government).
24 There are effectiveness and sustainability benefits when aid is
delivered through long-term commitments to partner country
priorities, using partner systems and priorities whenever possible.
Such approaches are described in MFAT as “high order aid modalities”.
STATEMENT OF PERFORMANCE
46
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
Performance measures
Budget standard
2014-15
Actual standard
Actual standard
Estimated proportion of development
cooperation covered by indicative
forward aid plans provided to partner
governments for the current year plus
two or more years in the future (bilateral
programmes only)
90%
66%26
New measure
Percentage of evaluations including
management response that are
published to our website within 3 months
of evaluation steering group sign-off
100%
027
New measure
Number of Ministerial letters prepared
60-90
72
83
Number of Official Information Act
request (OIA) responses provided
20-50
37
11
Percentage of Ministry OIA requests
responded to within statutory
timeframes
90%
77%
Revised measure
Percentage of Ministerial OIA request
replies completed five days prior to the
statutory time limit, unless otherwise
agreed
90%
100%
Revised measure
20 days
28 days
24 days
95%
100%
90%
4 or above on a 5 point
scale
The Minister of Foreign
Affairs expressed
gratitude for the
support received from
the Ministry28
Result
unavailable
at time of
reporting
Ministerial services
Average number of days to send final
OIA request response to a requestor (for
Ministry OIAs)
Percentage of Ministerial OIA request
responses that are factually accurate,
meet any legislative requirements, and
contain no avoidable errors, measured
by rejection rates by the office of each
Minister
Average ministerial satisfaction score
26 This result indicates that eight out of twelve bilateral programmes
fully met the criteria. To fully meet the criteria of this measure,
bilateral programmes are required to affirm all three of the following
concepts related to Forward Aid Plans:
• it was shared with the Partner Government in time to inform
national budget planning for the current year
• it was based on the Partner Government Financial Year
• it was for the current year plus two or more years in the future.
27 Twelve evaluations were published to the MFAT website in 201516. We consider publication within three months of evaluation
steering group sign-off an appropriate timeframe to generate
an agreed management response. In practice, however, it has
proved challenging to meet this timeframe. We are undertaking an
exercise to better understand the barriers involved and will look to
implement a more streamlined process that enables us to develop
a management response and publish to our website in a timely
manner.
28 As reported from the Minister of Foreign Affairs address at the MFAT
Leaders' Meeting on 27 May 2016.
STATEMENT OF PERFORMANCE
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FINANCIAL PERFORMANCE (figures are GST exclusive)
47
30/06/15
Actual
$000
55,141
Annual appropriations
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
58,079
59,477
1,398
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $1.398 million between appropriation and actual expenditure was mainly due to
reduced personnel expenses resulting from vacancies during the period of the capability review in early
2016 that remained unfilled until the new PDG operating structure was determined. With fewer staff there
was also less travel taking place resulting in reduced expenditure against the travel budget.
FINANCIAL OVERVIEW
48
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Financial overview
For the year ended 30 June 2016
MFAT’s financial performance (prior to re-measurements) for the 2015-16 year was:
• Total Departmental expenditure is within appropriations by $9.748 million (refer Appropriation
Tables page 84).
• An operating surplus of $13.425 million decreasing to surplus of $1.147 million after accounting for
re-measurement losses of $12.278 million.
6%
12%
12%
6%
MINISTERIAL
OPERATIONAL
EXPENDITURE
BY REGION
40%
20%
MINISTRY
OPERATIONAL
EXPENDITURE
BY CATEGORY
41%
15%
10%
6%
20%
12%
$46.318M
$81.000M
Americas (12%)
Asia (20%)
$37.519M
$44.217M
$57.617M
$22.638M
Australia &
Pacific (10%)
Europe (12%)
Accomodation
(15%)
$21.821M
$150.952M
Depreciation &
Amortisation
(6%)
Middle East
& Africa (6%)
New Zealand (40%)
$46.623M
$22.205M
Capital charge
(12%)
Travel (6%)
• This illustrates our operational expenditure by
region.
• The regional percentages are similar to 2014-15.
• The largest portion is New Zealand followed by
Asia, Americas, Europe, Australia/Pacific, and
Middle East and Africa.
$158.338M $74.406M
Personnel (41%)
Operating (20%)
• This illustrates our expenditure by category.
• This highlights that staff costs and infrastructure
-related costs represent approximately 75
percent of our overall operational expenditure.
FINANCIAL OVERVIEW
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Financial position
49
The financial position at balance date is robust with working capital (available funds) of $140 million with
current liabilities being 28 percent of current assets, and our current assets being 30 percent of total assets.
This means we are in a strong position to pay creditors and commit capital to our asset portfolio. Our asset
portfolio supports the provision of modern, secure and effective premises for accommodating NZ Inc’s
requirements offshore and modernising its IT system.
The following graph reflects our assets, liabilities and equity.
3%
2%
9%
7%
6%
6%
26%
MINISTRY
LIABILITIES
AND EQUITY
MINISTRY
ASSETS
58%
89%
$56.380M
$36.705M
$167.892M
Current
liabilities (9%)
Cash Bank, debtors
and prepayments (6%)
Debtor
Crown (26%)
$12.754M
$371.185M
$22.746M
Non current
liabilities (2%)
Land and buildings
(58%)
Computer hardware
and software (3%)
$574.720M
$45.326M
Equity (89%)
Furniture and fittings,
equipment and
motor vehicles (7%)
FINANCIAL STATEMENTS
50
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Financial statements
Statement of Comprehensive Revenue and Expense
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Actual
$000
Notes
30/06/16
Actual
$000
30/06/16
Unaudited
budget
$000
383,029
384,208
8,632
8,344
3,408
-
Revenue
368,284
9,237
17
3,640
381,178
Revenue Crown
Other Revenue
2
Gain on Foreign Exchange
Interest
12
100
171
-
395,252
392,652
3
158,338
163,944
Gain on sale of assets
Total revenue
Expenses
156,821
Personnel
103,495
Operating
4
95,701
102,678
Accommodation
5
57,617
56,612
Depreciation
10
20,971
21,107
Amortisation on intangible assets
11
1,667
1,738
6
46,623
46,473
51,974
18,433
1,191
44,956
40
376,910
Capital charge
Loss on foreign exchange
Total expenses
910
-
381,827
392,552
-
Re-measurement
(6,148)
60
(6,088)
370,822
10,356
(Gain)/loss on derivative financial instruments
18
11,971
Movement in discount rate for Long Service Leave
and Retirement Leave
15
307
-
Total re-measurement
Total expenses
Net surplus/(deficit)
12,278
-
394,105
392,552
1,147
100
-
-
1,147
100
Other comprehensive revenue and expense
(2,435)
7,921
Loss on property revaluations
Total comprehensive revenue and expense
The accompanying accounting policies and notes form part of these financial statements.
For information on major variances against budget refer to Note 21.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Changes in Equity
51
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Actual
$000
563,345
7,921
Notes
Balance at 1 July
Total comprehensive revenue and expense
(4,268)
Return of operating surplus to the Crown
20,000
Capital injections
586,998
Balance at 30 June
13
7
The accompanying accounting policies and notes form part of these financial statements.
For information on major variances against budget refer to Note 21.
30/06/16
Actual
$000
30/06/16
Unaudited
budget
$000
586,998
580,910
1,147
100
(13,425)
(100)
-
-
574,720
580,910
FINANCIAL STATEMENTS
52
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Financial Position
AS AT 30 JUNE 2016
30/06/15
Actual
$000
Notes
30/06/16
Actual
$000
30/06/16
Unaudited
budget
$000
ASSETS
Current assets
20,180
170,624
Cash and cash equivalents
2,887
Debtors and other receivables
9,467
Prepayments
3,309
Derivative financial instruments
206,467
11,996
49,872
167,892
93,709
8
5,738
1,998
9
10,784
7,862
18
157
7
196,567
153,448
Debtor Crown
Total current assets
Non-current assets
5,015
Debtors and receivables
8
4,553
4,201
3,564
Prepayments - leased land
9
3,477
3,621
Property, plant and equipment
10
423,735
462,810
Intangible assets
11
418,158
15,522
11,973
433,548
6,811
Total non-current assets
447,287
482,605
640,015
Total assets
643,854
636,053
LIABILITIES
Current liabilities
14,452
4,268
897
18,579
1,270
39,466
Creditors and other payables
12
15,624
18,183
Return of operating surplus
13
13,425
100
Provisions for other costs
14
721
545
Provision for employee entitlements
15
16,522
19,658
Derivative financial instruments
18
10,088
4,115
56,380
42,601
Total current liabilities
Non-current liabilities
9,653
Provision for employee entitlements
15
10,756
10,536
3,898
Provisions for other costs
14
1,998
2,006
12,754
12,542
13,551
Total non-current liabilities
53,017
Total liabilities
586,998
Net assets
69,134
55,143
574,720
580,910
EQUITY
437,668
General funds
7
426,445
431,580
149,330
Property revaluation reserve
7
148,275
149,330
586,998
Total equity
574,720
580,910
The accompanying accounting policies and notes form part of these financial statements.
For information on major variances against budget refer to Note 21.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Cash Flows
53
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Actual
$000
Notes
30/06/15
Actual
$000
30/06/16
Unaudited
budget
$000
385,761
441,173
10,136
8,444
12
-
1,575
-
Cash flows from operating activities
350,216
7,535
17
263
Receipts from Revenue Crown
Receipts from other revenue
Interest
Goods and services tax (net)
(157,923)
Payments to employees
(161,610)
(163,515)
(152,388)
Payments to suppliers
(150,921)
(159,719)
(46,623)
(46,473)
38,330
79,910
259
300
(31,260)
(71,975)
(44,956)
2,764
Payments for capital charge
Net cash flow from operating activities
16
Cash flows from investing activities
35,672
(48,719)
(4,255)
(17,302)
Sale of property, plant , equipment
Purchase of property, plant, equipment
Purchase of intangible assets
(10,378)
(4,550)
Net cash flow from investing activities
(41,379)
(76,225)
Cash flows from financing activities
(2,217)
Return of operating surplus
(4,268)
(3,685)
(2,217)
Net cash flow from financing activities
(4,268)
(3,685)
(16,755)
35,797
1,138
20,180
Net increase/(decrease) in cash
(7,317)
-
Add cash at the beginning of the year
20,180
49,872
Effect of exchange translation
adjustments
Closing cash at the end of the year
(867)
11,996
-
49,872
The GST (net) component of operating activities reflects the net GST paid and received to/from the Inland
Revenue Department. The GST component has been presented on a net basis, as the gross amounts do not
provide meaningful information for financial statement purposes.
The accompanying accounting policies and notes form part of these financial statements.
FINANCIAL STATEMENTS
54
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Commitments
AS AT 30 JUNE 2016
30/06/16
Actual
$000
30/06/15
Actual
$000
CAPITAL COMMITMENTS
Land and buildings
3,642
0
3,642
Less than one year
15,595
One to five years
6,000
Total capital commitments
21,595
Non-cancellable operating leases
Accommodation
38,589
Less than one year
36,554
65,684
One to five years
50,196
20,145
More than five years
21,783
124,418
Total non-cancellable operating lease commitments
108,533
128,060
Total commitments
130,128
CAPITAL COMMITMENTS
Capital commitments are the aggregate amount of capital expenditure contracted for the acquisition of
property, plant and equipment and intangible assets that have not been recognised as a liability as at 30
June 2016.
NON-CANCELLABLE OPERATING LEASES
MFAT leases property, plant and equipment in the normal course of its business. The majority of these
leases are for premises that have a non-cancellable leasing period.
Our non-cancellable operating leases have varying terms, escalation clauses and renewal rights. There are
no restrictions placed on us by any of its leasing arrangements.
The accompanying accounting policies and notes form part of these financial statements.
Statement of Contingent Liabilities and Contingent Assets
AS AT 30 JUNE 2016
MFAT has a contingent liability in the form of an indemnity as at 30 June 2016 to HSBC for $0.876 million as
part of the Chancery lease conditions in New York (30 June 2015: $0.913 million). MFAT also has a contingent
liability in the form of an indemnity authorised by the Minister of Finance in the event emergency medical
care is required for staff in Baghdad.
We have other contingent liabilities relating to employment and property disputes as at 30 June 2016
for $0.258 million (30 June 2015: $0.416 million). Disclosure of the individual disputes may prejudice the
Ministry’s position.
MFAT has contingent assets of $0.307 million that relate to employment and property issues as at 30 June
2016 (30 June 2015: nil).
The accompanying accounting policies and notes form part of these financial statements.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Notes to the financial statements
For the year ended 30 June 2016
Note 1: Statement of accounting policies
REPORTING ENTITY
Presentation currency and rounding
The Ministry of Foreign Affairs and Trade (’MFAT’) is
a government department as defined by section 2 of
the Public Finance Act 1989 and is domiciled in New
Zealand, operating globally. The relevant legislation
governing MFAT’s operations includes the Public
Finance Act and the Foreign Affairs Act 1988. MFAT’s
ultimate parent is the New Zealand Crown.
The financial statements are presented in New
Zealand dollars and all values are rounded to the
nearest thousand dollars ($000).
In addition, MFAT has reported on Crown activities
and trust monies that it administers.
MFAT manages the Government’s business with
foreign countries and their governments, and with
international organisations. The primary objective
of MFAT is to provide services to the Government
rather than making a financial return.
MFAT has designated itself as a public benefit entity
(PBE) for financial reporting purposes.
The financial statements for MFAT are for the year
ended 30 June 2016 and were approved for issue by
the Chief Executive on 30 September 2016.
BASIS OF PREPARATION
The financial statements have been prepared on a
going concern basis, and the accounting policies
have been applied consistently throughout the
period.
Statement of compliance
The financial statements of MFAT have been
prepared in accordance with the requirements
of the Public Finance Act 1989, which include the
requirement to comply with New Zealand generally
accepted accounting practice (NZ GAAP) and
Treasury Instructions.
The financial statements have been prepared in
accordance with tier 1 PBE accounting standards.
MFAT is a tier 1 entity under PBE standards as it has
expenditure greater than $30 million.
These financial statements comply with PBE
accounting standards.
Standards issued and not yet effective and not early
adopted
In 2015, the External Reporting Board issued
Disclosure Initiative (Amendments to PBE IPSAS 1),
2015 Omnibus Amendments to PBE Standards, and
Amendments to PBE Standards and Authoritative
Notice as a Consequence of XRB A1 and Other
Amendments. These amendments apply to PBEs
with reporting periods beginning on or after 1
January 2016. MFAT will apply these amendments
in preparing its 30 June 2017 financial statements.
MFAT expects there will be no effect in applying
these amendments.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Revenue
The specific accounting policies for significant
revenue items are explained below:
Revenue Crown
Revenue from the Crown is measured based on
MFAT’s funding for the reporting period. The funding
is established by Parliament when it passes the
Appropriation Acts for the financial year. The
amount of revenue recognised takes into account
any amendments to appropriations approved in the
Appropriation (Supplementary Estimates) Act for
the year and certain other unconditional funding
adjustments formally approved prior to balance
date.
A condition attached to the funding from the Crown
is that MFAT can only incur expenses within the
scope and limits of its appropriations.
The fair value of Revenue Crown has been
determined to be equivalent to the outputs
supplied.
55
FINANCIAL STATEMENTS
Revenue from services to third parties
56
Services to third parties is recognised at balance
date on a straight-line basis over the specified
period for the services unless an alternative method
better represents the stage of completion of the
transaction.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Lease payments under an operating lease are
recognised as an expense on a straight-line basis
over the lease term.
Lease incentives received are recognised in the
surplus or deficit as a reduction in rental expense
over the lease term.
Interest
Cash and cash equivalents
Interest revenue is accrued using the effective
interest rate method. The effective interest rate
exactly discounts estimated future cash receipts
through the expected life of the financial asset
to that asset’s net carrying amount. The method
applies this rate to the principal outstanding to
determine interest revenue each period.
Cash and cash equivalents includes cash on hand,
cash in transit, deposits held at call with banks, and
other short-term highly liquid investments with
original maturities of three months or less.
Rental revenue
Rental receipts are recognised as revenue on a
straight-line basis over the term of the lease. All
rental revenue is derived from other government
agencies at our overseas posts. No lease incentives
have been granted.
Expenses
Capital charge
The capital charge is recognised as an expense in
the financial year to which the charge relates.
Grant expenditure
Where grants are discretionary until payment, the
expense is recognised when the payment is advised.
Otherwise, the expense (and corresponding liability)
is recognised when MFAT does not have discretion
over the payment. For grants without conditions
attached, the expense/liability is recognised when
MFAT has an unconditional obligation to make
payment.
Foreign currency transactions
Foreign currency transactions (including those
for which forward exchange contracts are held)
are translated into the functional currency using
the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions
and from the translation at year-end exchange rates
of monetary assets and liabilities denominated in
foreign currencies are recognised in the surplus or
deficit.
Leases
An operating lease is a lease that does not transfer
substantially all the risks and rewards incidental to
ownership of an asset.
MFAT is only permitted to expend its cash and
cash equivalents within the scope and limits of its
appropriations.
Receivables
Short-term receivables are recorded at their face
value, less any provision for impairment.
A receivable is considered impaired when there
is evidence that MFAT will not be able to collect
amount due. The amount of the impairment is the
difference between the carrying amount of the
receivable and the present value of the amounts
expected to be collected.
Derivative financial instruments
Derivative financial instruments are used to hedge
exposure to foreign exchange movements. In
accordance with its Foreign Exchange Management
Policy, MFAT does not hold or issue derivative
financial instruments for trading purposes. We have
not adopted hedge accounting.
Derivatives are initially recognised at fair value
on the date a derivative contract is entered into
and are subsequently re-measured at their fair
value on each balance date. They are reported as
either assets or liabilities depending on whether
the derivative is in a net gain or net loss position
respectively. Movements in the fair value of
derivative financial instruments are recognised in
the surplus or deficit.
Foreign exchange derivatives are classified as
current if the contract is due for settlement within
12 months of balance date. Otherwise, foreign
exchange derivatives are classified as non-current.
Non-current assets held for sale
Non-current assets held of sale are held for sale if
their carrying amount will be recovered principally
through a sale transaction rather than through
FINANCIAL STATEMENTS
continuing use. Non-current assets held for sale are
measured at the lower of their carrying amount and
fair value less costs to sell.
Any increases in fair value (less costs to sell) are
recognised up to the level of any impairment losses
that have been previously recognised.
Non-current assets held for sale (including
those that are part of a disposal group) are not
depreciated or amortised while they are classified
as held for sale.
Property, plant and equipment
Property, plant and equipment consists of the
following asset classes: land, buildings, furniture
and fittings, plant and equipment, motor vehicles
and computer equipment.
Land is measured at fair value, and buildings
are measured at fair value less accumulated
depreciation. All other asset classes are measured
at cost, less accumulated depreciation and
impairment losses.
Individual assets, or group of assets, are capitalised
if their cost is greater than $5,000.
Revaluations
Revaluations are carried out for the following
classes of property, plant and equipment to reflect
the service potential or economic benefit obtained
through control of the asset. Revaluation is based
on the fair value of the asset, with changes reported
by class of asset. Accumulated depreciation at
revaluation date is eliminated against the gross
carrying amount so that the carrying amount after
revaluation equals the revalued amount.
Land and buildings
Land and buildings are recorded at fair value
and, for buildings, less depreciation accumulated
since the assets were last revalued. Valuations
undertaken in accordance with standards issued
by the New Zealand Property Institute are used
where available. Additions between revaluations
are recorded at cost. A revaluation for all land and
buildings was last completed on 31 October 2014.
Land and buildings are revalued every three years,
or whenever the carrying amount differs materially
to fair value.
Works of art
Works of art are recorded at cost less impairment
losses.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Other property, plant and equipment – at cost
Other property, plant and equipment – which
includes leasehold improvements, furniture and
fittings, computer equipment, motor vehicles,
and office equipment – are recorded at cost less
accumulated depreciation and accumulated
impairment losses.
Realised gains and losses arising from disposal
of property, plant and equipment are recognised
in the surplus or deficit in the period in which the
transaction occurs. Any balance attributable to the
disposed asset in the asset revaluation reserve is
transferred to retained earnings.
Impairment of property, plant and equipment
The carrying amounts of property, plant and
equipment are reviewed at least annually to
determine if there is any indication of impairment.
Where an asset’s recoverable amount is less than
its carrying amount, it will be reported at its
recoverable amount and an impairment loss will be
recognised. Losses resulting from impairment are
reported in the surplus or deficit.
Depreciation
Depreciation is provided on a straight-line basis at
rates calculated to allocate the cost or valuation of
an item of property, plant and equipment over its
estimated useful life. Typically, the estimated useful
lives of different classes of property, plant and
equipment are as follows:
Buildings
– Structure
35 to 60 years
– Fit out
3 to 20 years
– Services
3 to 20 years
Plant and machinery
Computer equipment
(excluding computer
software)
10 years
3 to 5 years
Equipment
5 to 20 years
Leasehold improvements
5 to 15 years
Motor vehicles
Furniture and fittings
8 years
6 years 8 months
The cost of leasehold improvements is capitalised
and depreciated over the unexpired period of the
lease with a maximum period of 15 years.
The residual value and useful life of an asset is
reviewed, and adjusted if applicable, at each
financial year end.
57
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Intangible assets
58
Intangible assets are initially recorded at cost.
The cost of an internally generated intangible
asset represents expenditure incurred in the
development phase of the asset only. The
development phase occurs after the following can
be demonstrated: technical feasibility; ability to
complete the asset; intention and ability to sell or
use; and development expenditure can be reliably
measured. Expenditure incurred on research of an
internally generated intangible asset is expensed
when it is incurred. Where the research phase
cannot be distinguished from the development
phase, the expenditure is expensed when it is
incurred.
Intangible assets with finite lives are subsequently
recorded at cost less any amortisation and
impairment losses. Amortisation is charged to the
surplus or deficit on a straight-line basis over the
useful life of the asset. Typically, the estimated
useful lives of these assets are as follows:
Computer software
3 to 8 years
Where there is an active market for an intangible
asset, the asset is recorded at a revalued amount,
being fair value less any subsequent accumulated
depreciation and subsequent accumulated
impairment losses.
Unrealised gains and losses arising from changes
in the value of intangible assets are recognised as
at balance date. To the extent that a gain reverses a
loss previously charged to the surplus or deficit, the
gain is credited to the surplus or deficit. Otherwise,
gains are credited to an asset revaluation reserve
for that asset. To the extent that there is a balance
in the asset revaluation reserve for the intangible
asset, any loss is debited to the reserve. Otherwise,
losses are reported in the surplus and deficit.
Realised gains and losses arising from disposal of
intangible assets are recognised in the surplus and
deficit in the period in which the transaction occurs.
Impairment of intangible assets
Intangible assets with finite lives are reviewed
at least annually to determine if there is any
indication of impairment. An intangible asset with
an indefinite life is tested for impairment annually.
Where an intangible asset’s recoverable amount is
less than its carrying amount, it will be reported at
its recoverable amount and an impairment loss will
be recognised. Losses resulting from impairment
are reported in the surplus or deficit, unless the
asset is carried at a revalued amount in which case
the impairment loss is treated as a revaluation
decrease.
Creditors and other payables
Short-term creditors and other payables are
recorded at their face value.
Employee entitlements
Short-term employee entitlements
Employee benefits expected to be settled within 12
months of balance date are measured at nominal
values based on accrued entitlements at current
rates of pay.
These include salaries accrued up to balance date,
annual leave earned but not yet taken at balance
date, retiring and long service leave entitlements
expected to be settled within 12 months, and sick
leave.
A liability for sick leave is recognised to the extent
that absences in the coming year are expected to
be greater than the sick leave entitlements earned
in the coming year. The amount is calculated based
on the unused sick leave entitlement that can be
carried forward at balance date, to the extent that it
will be used by staff to cover those future absences.
A liability and an expense are recognised for
bonuses where MFAT has a contractual obligation
or where there is a past practice that has created a
constructive obligation and a reliable estimate of
the obligation can be made.
Long-term employee entitlements
Employee benefits that are due to be settled beyond
12 months after the end of the reporting period in
which the employee renders the related service,
such as long service leave and retiring leave, are
calculated on an actuarial basis. The calculations
are based on:
• likely future entitlements accruing to staff,
based on years of service, years to entitlement,
the likelihood that staff will reach the point
of entitlement, and contractual entitlements
information
• the present value of the estimated future cash
flows.
Expected future payments are discounted using
market yields on government bonds at balance
date with terms to maturity that match, as closely
as possible, the estimated future cash outflows for
entitlements. The inflation factor is based on the
expected long-term increase in remuneration for
employees.
FINANCIAL STATEMENTS
Sick leave, annual leave, vested long service leave,
and non-vested long service leave and retirement
gratuities expected to be settled within 12 months
of balance date are classified as a current liability.
All other employee entitlements are classified as a
non-current liability.
Termination benefits
Termination benefits are recognised in the surplus
or deficit only when there is a demonstrable
commitment to either terminate employment
prior to normal retirement date or to provide
such benefits as a result of an offer to encourage
voluntary redundancy. Termination benefits settled
within 12 months are reported at the amount
expected to be paid, otherwise they are reported
as the present value of the estimated future cash
outflows.
Superannuation schemes
Defined contribution schemes
MINISTRY OF FOREIGN AFFAIRS AND TRADE
affected, or for which implementation has already
commenced.
Equity
Equity is the Crown’s investment in MFAT and is
measured as the difference between total assets
and total liabilities. Equity is disaggregated
and classified as taxpayers’ funds and property
revaluation reserves.
Property revaluation reserves
These reserves relate to the revaluation of land and
buildings to fair value.
Commitments
Commitments are future expenses and liabilities
to be incurred on contracts that have been
entered into at balance date. Information on noncancellable capital and lease commitments are
reported in the statement of commitments.
Obligations for contributions to the State Sector
Retirement Savings Scheme, KiwiSaver, and the
Government Superannuation Fund are accounted
for as defined contribution schemes and are
recognised as an expense in the surplus or deficit as
incurred.
Cancellable capital commitments that have penalty
or exit costs explicit in the agreement on exercising
that option to cancel are reported in the statement
of commitments at the lower of the remaining
contractual commitment and the value of those
penalty or exit costs (i.e. the minimum future
payments).
Other liabilities and provisions
Contingent liabilities and contingent assets
Other liabilities and provisions are recognised
for future expenditure of uncertain amount or
timing when there is a present obligation (either
legal or constructive) as a result of a past event,
it is probable that an outflow of future economic
benefits will be required to settle the obligation,
and a reliable estimate can be made of the amount
of the obligation. Provisions are not recognised for
future operating losses. Liabilities and provisions to
be settled beyond 12 months are recorded at their
present value.
Contingent liabilities and contingent assets are
recorded in the Statement of Contingent Liabilities
and contingent assets at the point at which the
contingency is evident. Contingent liabilities are
disclosed if the possibility that they will crystallise
is not remote. Contingent assets are disclosed if it is
probable that the benefits will be realised.
Provisions are measured at the present value of the
expenditure and are discounted using market yields
on government bonds at balance date with terms
to maturity that match, as closely as possible, the
estimated timing of the future cash outflows. The
increase in the provision due to the passage of time
is recognised as an interest expense and is included
in “finance costs”.
Restructuring
A provision for restructuring is recognised when an
approved detailed formal plan for the restructuring
has either been announced publicly to those
Goods and services tax (GST)
All items in the financial statements, including
appropriation statements, are stated exclusive of
GST except for Creditors and Payables and Debtors
and Receivables, which are stated on a GST-inclusive
basis. Where GST is not recoverable as input tax,
then it is recognised as part of the related asset or
expense.
The amount of GST owing to, or owed by Inland
Revenue at balance date, being the difference
between Output GST and Input GST, is included in
Creditors and Payables or Debtors and Receivables
(as appropriate).
Commitments and contingencies are disclosed
exclusive of GST.
59
FINANCIAL STATEMENTS
60
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Income tax
Critical accounting estimates and assumptions
As a Government department, MFAT is exempt from
the payment of income tax (Income Tax Act 2007)
and no charge for income tax has been provided for.
In preparing these financial statements, estimates
and assumptions have been made concerning the
future. These estimates and assumptions may differ
from the subsequent actual results. Estimates and
assumptions are continually evaluated and are
based on historical experience and other factors,
including expectations of future events that are
believed to be reasonable under the circumstances.
Statement of cost accounting policies
MFAT has determined the cost of outputs using the
cost allocation system outlined below:
Our policy is to directly charge costs to outputs
wherever possible. This is done using the following
activity based principles: i) total corporate costs
are allocated to operational cost centres based on
head count, and ii) operating costs are accumulated
in operational cost centres and attributed to
outputs on the basis of pre-established ratios.
Output allocation factors are based on estimates
of the time that staff intend to spend on producing
various outputs. They are reviewed annually as part
of an operational planning and evaluation exercise
to ensure they provide an accurate measure of
resource consumption.
To summarise, MFAT has determined the cost of
outputs using the cost allocation system outlined
below.
Definition of terms
‘Operational cost centre’ is a unit that produces
outputs. All overseas posts and regional and
functional divisions in Wellington are operational
cost centres.
‘Support service cost centre’ is a unit that provides
support services to operational cost centres.
‘Output allocation factor’ is a ratio calculated
from an estimate of time each officer spends on
producing specified outputs.
‘Direct costs’ are those costs directly attributed to
outputs.
‘Indirect costs’ are those costs directly attributed to
operational cost centres.
‘Corporate costs’ are those costs of support
service cost centres attributed to operational cost
centres as overhead. Corporate costs account
for approximately 19 percent (2015: 18 percent) of
MFAT’s output costs.
There have been no changes in cost accounting
policies since the date of the last audited financial
statements.
There are no critical estimates or assumptions that
would have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Critical judgements in applying accounting policies
No critical judgements have been exercised in
applying the accounting policies for the year ended
30 June 2016.
Basis of the budget figures
The 2016 budget figures are for the year ended
30 June 2016 and were published in the 2014-15
annual report. They are consistent with MFAT’s best
-estimate financial forecast information submitted
to Treasury for the Budget Economic and Fiscal
Update (BEFU) for the year ending 2015-16.
The budget figures are unaudited and have been
prepared using the accounting policies adopted in
preparing these financial statements.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 2: Other revenue
61
Services for other New Zealand agencies: Recovery of costs for a range of support services provided to
other New Zealand agencies with overseas interests and rental revenue from sub-let office and residential
accommodation.
Services include general office services; access to communications and courier systems; operational
support to agency representatives working out of our overseas posts; and fees for work performed on
behalf of other agencies.
Consular services: Notarial and legal charges, diplomatic passports, and authentication of document
charges.
Miscellaneous: Sale of publications including the UN Handbook and miscellaneous service charges.
30/06/16
Actual
$000
30/06/15
Actual
$000
7,114
715
1,079
329
9,237
Services for other New Zealand agencies
Consular services
SIDS conference support to Samoa
Miscellaneous
Total other revenue
7,090
864
678
8,632
Note 3: Personnel costs
30/06/16
Actual
$000
30/06/15
Actual
$000
133,207
6,650
205
1,124
71
15,564
156,821
Salaries and wages
Employer contributions to defined contribution plans
ACC levy
Increase/(decrease) in employee entitlements
Increase/(decrease) in sick leave liability
FBT
Total personnel costs
145,323
7,475
437
(1,465)
(3)
6,571
158,338
FINANCIAL STATEMENTS
62
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 4: Operating costs
30/06/16
Actual
$000
2015-16
Unaudited
budget
$000
403
360
Other operating
64,365
68,459
Travel
30/06/15
Actual
$000
361
72,239
20,952
Audit fees for financial statement audit
22,205
22,584
Consultants' fees
2,030
4,285
3,057
Staff training
2,656
4,440
3,048
Representation
3,155
2,550
158
-
3,752
59
Asset/Debt write-offs
27
Loss on sale of assets
729
-
103,495
Total operating costs
95,701
102,678
30/06/16
Actual
$000
2015-16
Unaudited
budget
$000
Note 5: Accommodation costs
30/06/15
Actual
$000
37,026
42,224
41,060
5,909
Rentals and operating leases
Maintenance
6,308
5,317
2,689
Rates, taxes & communal charges
3,128
3,011
4,260
Utilities
4,102
5,033
2,090
Other
51,974
Total accommodation and operating lease costs
1,855
2,191
57,617
56,612
Note 6: Capital charge
MFAT pays a capital charge to the Crown on its taxpayers’ funds balance as at 30 June and 31 December each
year. The capital charge rate for the year ended 30 June 2016 was 8.0 percent (2015: 8.0 percent).
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 7: Equity
63
30/06/16
Actual
$000
30/06/15
Actual
$000
Taxpayers' funds
408,407
Balance at 1 July
437,668
10,356
Surplus/(deficit)
1,147
20,000
3,173
(4,268)
437,668
Capital injection
-
Transfer from revaluation reserve on disposal of property
1,055
Return of operating surplus to the Crown
(13,425)
Balance at 30 June
426,445
Property revaluation reserves
154,938
Balance at 1 July
149,330
(2,435)
Revaluation loss
-
(3,173)
Transfer to taxpayers' funds on disposal
(1,055)
149,330
Balance at 30 June
148,275
586,998
Total Equity
574,720
Property revaluation reserve consists of:
122,946
26,384
149,330
Land revaluation reserve
122,799
Buildings revaluation reserve
25,476
Total property revaluation reserves
148,275
Note 8: Debtors and receivables
30/06/16
Actual
$000
30/06/15
Actual
$000
Current
2,239
634
14
2,887
Trade debtors
1,020
Receivables
4,708
Post establishment loans
Total current
10
5,738
Non-Current
196
Deposit bonds
214
4,819
Lease deposits
4,339
5,015
Total non-current
4,553
7,902
Total debtors and receivables
10,291
Total receivables comprise:
7,902
-
Receivables from the sale of goods & services (exchange transactions)
Receivables from non-exchange transactions
The carrying amount of debtors and receivables approximates their fair value.
As at 30 June 2016 and 2015, all receivables have been assessed for impairment and no provision was
required.
10,291
-
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
64
30/06/15
$000
30/06/16
$000
180
1,007
1,710
12
Not past due
Past due 1-30 days
Past due 31-60 days
64
11
Past due 61-90 days
149
(10)
Past due >91 days
136
-
2,239
1,020
Total
Note 9: Prepayments
Current prepayments include expenditure paid in advance for property leases. Non-current prepayments
include our Beijing Embassy land lease, which is being amortised over the remaining life of the lease.
Note 10: Property, plant, equipment
Motor
Vehicles
$000
Computer
Equipment
$000
Total
$000
27,381
7,962
32,357
539,573
1,886
1,320
3,524
48,719
-
-
-
-
(21,310)
Freehold
Land
$000
Freehold
Buildings
$000
Furniture
& Fittings
$000
Plant &
Equipment
$000
298,056
103,111
70,706
8,022
22,496
11,471
(15,273)
(6,037)
Cost or valuation
Balance at 1 July 2014
Additions
Revaluation
Disposals
(26,775)
(5,924)
(1,887)
(1,658)
(686)
(1,538)
(38,468)
Balance at 30 June 2015
264,030
113,646
80,290
27,609
8,596
34,343
528,514
Balance at 1 July 2015
264,030
113,646
80,290
27,609
8,596
34,343
528,514
1,385
12,179
10,304
2,710
878
3,804
31,260
-
-
-
(78)
-
78
-
(3,219)
(1,610)
(2,240)
(6,594)
(908)
(5,073)
(19,644)
262,196
124,215
88,354
23,647
8,566
33,152
540,130
Balance at 1 July 2014
-
17,479
46,472
22,995
3,636
26,618
117,200
Depreciation expense
-
8,163
4,738
1,503
927
3,102
18,433
Additions
Asset class adjustment reclassification
Disposals
Balance at 30 June 2016
Accumulated depreciation
and impairment losses
Eliminate on disposal
-
(784)
(1,837)
(1,646)
(597)
(1,539)
(6,403)
Eliminate on revaluation
-
(18,874)
-
-
-
-
(18,874)
Balance at 30 June 2015
-
5,984
49,373
22,852
3,966
28,181
110,356
Balance at 1 July 2015
-
5,984
49,373
22,852
3,966
28,181
110,356
Depreciation expense
-
9,475
6,164
1,661
949
2,722
20,971
Eliminate on disposal
-
(233)
(2,235)
(6,592)
(799)
(5,073)
(14,932)
Asset class adjustment reclassification
-
-
-
(98)
-
98
-
Balance at 30 June 2016
-
15,226
53,302
17,823
4,116
25,928
116,395
At 1 July 2014
298,056
85,632
24,234
4,386
4,326
5,739
422,373
At 30 June and 1 July 2015
264,030
107,662
30,917
4,757
4,630
6,162
418,158
At 30 June 2016
262,196
108,989
35,052
5,824
4,450
7,224
423,735
Carrying amounts
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Movements in values
Restrictions on sale of land and buildings
Land and Buildings were revalued at fair value as
at 31 October 2014. This valuation was conducted
by an independent registered valuer, S N Dean,
Director – Valuation and Advisory Services, Colliers
International New Zealand Limited, FNZIV, AREINZ
and FPINZ, on MFAT’s behalf.
MFAT owns property in 13 locations globally that
have restrictions on their sale, mostly in relation to
their use, or requiring that country’s Government’s
approval to sell. The carrying amount of the
property is $178.442 million (2015: $170.210 million).
Land is valued at fair value using market-based
evidence based on its highest and best use with
reference to comparable land values. Buildings are
valued at fair value using market-based evidence.
The Optimised Depreciated Replacement Cost
approach has been used when the fair value of
an asset cannot be determined by reference to
the price in an active market for the same asset
or a similar asset. Under these circumstances,
depreciated replacement cost is considered to be
the most appropriate basis for determination of the
fair value.
Land and Buildings have been translated into New
Zealand dollars at the exchange rate prevailing as at
that date.
Buildings purchased or capitalised on or after 1
November 2014 are recorded at cost.
The total amount of property, plant and equipment
in the course of construction is $13.938 million (2015:
$6.607 million).
30/06/16
Actual
$000
30/06/15
Actual
$000
Property, plant and
equipment under
construction
4,631
Freehold buildings
1,526
Furniture and fittings
827
-
Plant and equipment
30
450
Computer equipment
266
6,607
Balance at 30 June 2016
12,815
13,938
During the year MFAT sold the official residence
in The Hague resulting in a loss on sale of $0.701
million.
There are conditions that apply to the land leased
by MFAT in New Delhi. The following restrictions in
relation to the sale and treatment of sale proceeds
apply:
• If the sale is to another diplomatic mission we
retain 100 percent of the proceeds, and the
purchaser inherits the same terms of ownership;
• If the sale is to other than a diplomatic mission,
then the Indian Government has the first right
of refusal and if accepted we retain 20 percent
of the land value increase since the original
purchase and 100 percent of the buildings
proceeds; and
• If the Indian Government does not purchase
it, then it can be offered to a non-diplomatic
third party with MFAT retaining 20 percent of
the increased value of the land proceeds and
100 percent of the buildings proceeds, with the
Indian Government receiving 80 percent of the
land value. The purchaser inherits the same
terms of ownership.
Based on the above restrictions our valuer has
valued the New Delhi land at 20 percent of the fair
value, which is $57.423 million as at 31 October 2014.
65
FINANCIAL STATEMENTS
66
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 11: Intangible assets
Computer software
$000
Cost
Balance at 1 July 2014
18,084
Additions
4,255
Disposals
-
Balance at 30 June 2015
22,339
Balance at 1 July 2015
22,339
Additions
10,378
Disposals
(1,390)
Balance at 30 June 2016
31,327
Accumulated Amortisation and Impairment Losses
Balance at 1 July 2014
14,337
Amortisation expense
1,191
Eliminate on disposal
-
Balance at 30 June 2015
15,528
Balance at 1 July 2015
15,528
Amortisation expense
1,667
Eliminate on disposal
(1,390)
Balance at 30 June 2016
15,805
Carrying Amounts
At 1 July 2014
3,747
At 30 June and 1 July 2015
At 30 June 2016
6,811
15,522
The total amount of intangible assets in the course of construction is $8.716 million (2015: $3.045 million).
There are no restrictions over the title of MFAT’s intangible assets, nor are any intangible assets pledged as
security for liabilities.
Note 12: Creditors and payables
30/06/16
Actual
$000
30/06/15
Actual
$000
Payables under exchange transactions
1,758
Trade creditors
10,262
Accrued expenses
12,020
Total payables under exchange transactions
2,185
9,436
11,621
Payables under non-exchange transactions
1,662
FBT payable
1,658
770
GST payable
2,345
2,432
14,452
Total payables under non-exchange transactions
Total payables
4,003
15,624
Creditors and other payables are non-interest bearing and are normally settled on 30-day terms, therefore
the carrying value of creditors and other payables approximates their fair value.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 13: Return of operating surplus
67
30/06/16
Actual
$000
30/06/15
Actual
$000
10,356
Net surplus/(deficit)
1,147
Plus/(less)
60
(6,148)
4,268
Movement in discount rate for Long Service Leave and Retirement Leave
307
Net loss/(gain) on derivative financial instruments
11,971
Total return of operating surplus
13,425
The operating surplus is required to be paid to the Crown by 31 October 2016.
Note 14: Provisions
30/06/16
Actual
$000
30/06/15
Actual
$000
342
Lease make good
218
555
Restructuring
503
897
Total Current
721
Non-current portion
1,646
Lease make good
1,645
2,252
Restructuring
3,898
Total Non-Current
1,998
353
4,795
Total
2,719
Onerous
$000
Make good
$000
Restructuring
$000
Total
$000
46
1,988
3,611
5,645
Additional provisions made
-
-
-
-
Amounts used
-
-
(698)
(698)
Balance as 1 July 2014
(46)
-
(106)
(152)
Discount unwind
Unused amounts reversed
-
-
-
-
Balance as at 30 June 2015
-
1,988
2,807
4,795
Balance as 1 July 2015
-
1,988
2,807
4,795
Additional provisions made
-
-
298
298
Amounts used
-
(125)
(350)
(475)
Unused amounts reversed
-
-
(1,899)
(1,899)
Discount unwind
-
-
-
-
Balance as at 30 June 2016
-
1,863
856
2,719
Restructuring
The restructuring provision arises from the Ministry’s organisational change decisions and relates to
the cost of expected redundancies ($0.856 million). Management anticipate that the restructuring will be
completed over the next 2 to 3 years and the amount of the liability is considered to be reasonably certain.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Lease make good
68
In respect of a number of its leased premises, MFAT is required at the expiry of the lease term to make good
any damage caused to the premises and to remove any fixtures or fittings installed by us. In many cases,
we have the option to renew these leases, which affects the timing of the expected cash outflows to make
good the premises.
Note 15: Provision for employee entitlements
30/06/16
Actual
$000
30/06/15
Actual
$000
Current Liabilities
10,829
Annual leave
11,149
532
Long service leave
567
612
Retirement leave
673
1,277
161
4,756
Retirement gratuities
1,286
End of posting leave
183
Salaries and allowances
2,154
193
Sick leave liability
189
219
ACC levy
321
18,579
Total Current
16,522
Non-Current Liabilities
1,938
Long service leave
2,230
6,018
Retirement leave
6,732
1,376
Retirement gratuities
1,428
321
9,653
28,232
End of posting leave
366
Total Non-Current
10,756
Total Provision for Employee Entitlements
27,278
An independent actuarial valuation was undertaken by AON Consulting New Zealand Limited as at 30 June
2016 to estimate the present value of retirement leave and long service leave.
Two key assumptions used in calculating this liability include the discount rate and the salary inflation
factor. Any changes in these assumptions will affect the carrying amount of the liability.
Expected future payments are discounted using discount rates derived from the yield curve of New
Zealand government bonds. The discount rates used have maturities that match, as closely as possible, the
estimated future cash outflows. A weighted average discount rate of 2.94 percent (2015: 4.17 percent) and an
inflation factor of 1.48 percent (2015: 2.63 percent) were used. The discount rates and salary inflation factor
used are those advised by the Treasury.
If the discount rate were to differ by 1.0 percent higher than the actuarial estimates, with all other factors
held constant, the carrying amount of the liability would be an estimated $553,000 lower.
If the discount rate were to differ by 1.0 percent lower than the actuarial estimates, with all other factors
held constant, the carrying amount of the liability would be an estimated $619,000 higher.
If the salary inflation factor were to differ by plus or minus 1.0 percent from the actuarial estimates, with all
other factors held constant, the carrying amount of the liability would be an estimated $609,000 higher and
$555,000 lower respectively.
The movements in discount rate are recognised in the Statement of Comprehensive Revenue and Expense
as a re-measurement (i.e. net gain or loss).
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Note 16: Reconciliation of net surplus to net cash flow from operating activities
30/06/15
Actual
$000
10,356
Net surplus/(deficit)
30/06/16
Actual
$000
2015-16
Budgeted
$000
1,147
100
Add/(less) non-cash items
19,624
Depreciation and amortisation expense
22,638
22,845
(6,148)
Net (gains)/loss on derivative financial instruments
11,971
-
867
-
(307)
-
35,169
22,845
557
-
4,237
56,965
(1,230)
-
1,173
-
(2,076)
-
60
13,536
Other non-cash movement
Movement in discount rate for long service leave and
retirement leave
Total non-cash items
Add/(less) items classified as investing or financing
activities
(3,613)
(Gains)/losses on disposal of property, plant and equipment
Add/(less) movements in statement of financial position
items
(19,771)
6,896
(3,784)
(Increase)/Decrease in receivables
(Increase)/Decrease in prepayments
Increase/(Decrease) in payables
(850)
Increase/(Decrease) in provisions
1,132
Increase/(Decrease) in employee entitlements
(647)
-
(16,377)
Total net movement in working capital items
1,457
56,965
38,330
79,910
3,902
Net cash flow from operating activities
Note 17: Financial instrument risks
MFAT is party to financial instrument arrangements as part of its everyday operations. These include
instruments such as bank balances, investments, accounts receivable, and foreign currency forward
contracts.
MFAT is exposed to a variety of financial instrument risks, including market risk, credit risk, and liquidity
risk. We have a series of policies to manage the risks associated with financial instruments and seek to
minimise exposure from financial instruments. These policies do not allow any transactions that are
speculative in nature to be entered into.
69
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Market risk
70
Currency risk
Currency risk is the risk that debtors and creditors, due in foreign currency, will fluctuate because of
changes in foreign exchange rates.
MFAT uses foreign exchange forward contracts to manage foreign exchange exposures.
The notional principal amounts of outstanding forward exchange contracts in New Zealand dollar
equivalents at 30 June 2016 were:
30/06/15
$000
30/06/16
$000
USD
17,957
24,454
JPY
3,264
3,826
EUR
16,391
18,833
Other
29,792
60,240
Total
67,404
107,353
Sensitivity analysis
Forward foreign exchange contracts
Derivative financial instruments include forward foreign exchange contracts in gain with a fair value
totalling $0.157 million and forward foreign exchange contracts in loss with a fair value totalling $10.088
million (2015: $3.309 and $1.270 million respectively). A movement in foreign exchange rates plus or minus
10 percent has an impact of $18.788 million / $0.893 million on MFAT’s revenue/expenditure and assets/
liabilities (2015: $9.755 million / $4.274 million) based on a derivative valuation model using balance date
forward exchange rates plus or minus 10 percent.
Creditors denominated in foreign currencies
As at 30 June 2016, if the New Zealand dollar had weakened/strengthened by 5 percent against the US dollar
with all other variables held constant, the surplus/deficit for the year would have been $6,500 (2015: $33,000)
higher/lower. This movement is attributable to the foreign exchange gains/losses on translation of US
dollar denominated creditors.
As at 30 June 2016, if the New Zealand dollar had weakened/strengthened by 5 percent against the Japanese
yen with all other variables held constant, the surplus/deficit for the year would have been $8,700 (2015:
$7,200) higher/lower. This movement is attributable to the foreign exchange gains/losses on translation of
Japanese Yen denominated creditors.
As at 30 June 2016, if the New Zealand dollar had weakened/strengthened by 5 percent against the Euro
with all other variables held constant, the surplus/deficit for the year would have been $4,300 (2015: $11,200)
higher/lower. This movement is attributable to the foreign exchange gains/losses on translation of Euro
denominated creditors.
As at 30 June 2016, if the New Zealand dollar had weakened/strengthened by 5 percent against the Great
British Pound with all other variables held constant, the surplus/deficit for the year would have been
$1,300 (2015: $3,600) higher/lower. This movement is attributable to the foreign exchange gains/losses on
translation of Great British Pound denominated creditors.
Foreign exchange transaction exposure
MFAT faces large foreign exchange transaction exposure due to the inherent risk related to volatile foreign
exchange markets impacting expenditure incurred in multiple currencies offshore. We use forward
exchange contracts to hedge its exposure to foreign exchange movements.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Foreign currency transactions each month are translated into New Zealand dollars at an average (‘spot’)
foreign exchange rate, regardless of whether those transactions have been hedged at a different exchange
rate. When the foreign exchange contracts mature and are settled, the exchange rate difference between
the New Zealand dollar amount at the forward contract rate compared with the New Zealand dollar
amount at the spot rate is recognised as a realised gain or loss in the Statement of Comprehensive Revenue
and Expense. The resulting net foreign exchange loss or gain has no impact on the bottom line as it is offset
by lower or higher costs in the other expenditure lines appearing in the Statement of Comprehensive
Revenue and Expense.
Interest rate risk
Interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market
interest rates. This could impact on the return on investments or the cost of borrowing. MFAT has no
significant exposure to interest rate risk on its financial instruments.
The Public Finance Act 1989 stipulates that MFAT cannot raise a loan without ministerial approval and no
such loans have been raised. Accordingly, there is no interest rate exposure as no funds were borrowed.
Credit risk
Credit risk is the risk that a third party will default on its obligations to MFAT, causing us to incur a loss.
In the normal course of its business, MFAT incurs credit risk from trade debtors, and transactions with
financial institutions.
Our maximum credit exposure for each class of financial instrument is represented by the total carrying
amount of cash and cash equivalents, net debtors, and derivative financial instrument assets. There is
no collateral held as security against these financial instruments, including those instruments that are
overdue or impaired.
MFAT does not require any collateral or security to support financial instruments with financial institutions
that we deal with as these entities have high credit ratings. For its other financial instruments, we do not
have significant concentrations of risk.
Liquidity risk
The liquidity risk is the risk that MFAT will encounter difficulty raising liquid funds to meet commitments as
they fall due.
In meeting our liquidity requirements we closely monitor our forecast cash requirements with expected
cash drawdowns from the New Zealand Debt Management Office. MFAT maintains a target level of available
cash to meet its liquidity requirements.
Our creditors and payables will be settled within three months of balance date. Derivative financial
instrument liabilities will be settled within one year of balance date.
The table below analyses MFAT’s financial liabilities that will be settled based on the remaining period at 30
June 2016 to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash
flows.
71
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Less than
6 months
$000
72
Between 6 months
and 1 year
$000
2015
Creditors and other payables
Derivative financial instrument liabilities
14,452
-
590
680
15,624
-
5,245
4,843
2016
Creditors and other payables
Derivative financial instrument liabilities
The table below analyses MFAT’s forward exchange contract derivatives into the relevant maturity
groupings based on the remaining period at balance date to the contractual maturity date. The amounts
disclosed are the contractual undiscounted cash flows.
Contractual
cash flows
$000
Less than
6 months
$000
6-12
months
$000
Greater then
12 months
$000
-
67,404
33,954
33,450
-
-
-
69,443
35,140
34,303
-
10,088
157
- outflow
-
-
107,353
55,695
50,827
831
- inflow
-
-
97,422
50,536
46,055
831
Liability carrying
amount
$000
Asset carrying
amount
$000
1,270
3,309
- outflow
-
- inflow
2015
Gross settled foreign
exchange contracts:
2016
Gross settled foreign
exchange contracts:
Note 18: Categories of financial instruments
Fair value
The fair value of all financial instruments is equivalent to the net carrying amount disclosed in the
Statement of Financial Position.
The carrying amounts of financial assets and financial liabilities in each of the financial instrument
categories are as follows:
30/06/16
Actual
$000
30/06/15
Actual
$000
Loans and Receivables
20,180
7,902
Cash and cash equivalents
Debtors and other receivables
11,996
8
10,291
170,624
Debtor Crown
167,892
198,706
Total Loans and Receivables
190,179
Fair Value through Surplus and Deficit - Held for Trading
3,309
(1,270)
2,039
Derivative financial instrument assets
157
Derivative financial instrument liabilities
(10,088)
Total Fair Value through Surplus and Deficit - Held for Trading
(9,931)
Financial Liabilities measured at Amortised Cost
14,452
Creditors and other payables
12
15,624
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
The derivatives in gain and the derivatives in loss represent the difference between the notional principal
amount and the carrying amount of the forward exchange contracts.
73
Movements in fair value of derivative financial instruments are recognised in the Statement of
Comprehensive Revenue and Expense as a net gain or loss on derivative financial instruments.
A net loss of $11.971 million has been recognised (2015: $6.148 million net gain) as the NZD has strengthened
in value since the forward contracts were taken out.
Fair value hierarchy
The following table analyses the basis of the valuation of classes of financial instruments measured at fair
value in the statement of financial position.
Total
$000
Quoted
market
price
$000
Valuation
technique
observable inputs
$000
Significant
non-observable
inputs
$000
3,309
-
3,309
-
1,270
-
1,270
-
157
-
157
-
10,088
-
10,088
-
30 June 2015
Financial assets
Foreign exchange derivatives
Financial liabilities
Foreign exchange derivatives
30 June 2016
Financial assets
Foreign exchange derivatives
Financial liabilities
Foreign exchange derivatives
There were no transfers between the different levels of the fair value hierarchy.
Note 19: Capital management
MFAT’s capital is its equity, which comprises taxpayers’ funds and property revaluation reserves. In 2015-16
Equity is represented by net assets.
MFAT manages its revenues, expenses, assets, liabilities, and general financial dealings prudently.
MFAT’s equity is largely managed as a by-product of managing revenue, expenses, assets, liabilities, and
compliance with the Government budget processes, Treasury Instructions and the Public Finance Act 1989.
The objective of managing MFAT’s equity is to ensure we effectively achieve our goals and objectives for
which MFAT has been established, whilst remaining a going concern.
Note 20: Related party transactions
MFAT is a wholly owned entity of the Crown.
Related party disclosures have not been made for transactions with related parties that are within a
normal supplier or client/recipient relationship on terms and conditions no more or less favourable than
those that it is reasonable to expect MFAT would have adopted in dealing with the party at arm’s length in
the same circumstances. Further, transactions with other government agencies (for example, government
departments and Crown entities) are not disclosed as related party transactions when they are consistent
with the normal operating arrangements between government agencies and undertaken on the normal
terms and conditions for such transactions.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Key management personnel compensation
74
30/06/16
Actual
$000
30/06/15
Actual
$000
Leadership Team, including the Chief Executive
4,193
10.3
Total Remuneration, including long-term benefits
Total full time equivalent personnel
4,046
10.9
The above key management personnel disclosure excludes the Minister of Foreign Affairs who is the
responsible minister for the Ministry. The Minister’s remuneration and other benefits are set by the
Remuneration Authority under the Members of Parliament (Remuneration and Services) Act 2013 and are
paid under Permanent Legislative Authority, and not paid by MFAT.
Note 21: Major budget variations
Explanations for major variances from MFAT’s original 2015-16 budget are as follows:
Statement of comprehensive revenue and expense
Total revenue was $2.600 million higher than budgeted. This was mainly due to foreign exchange gains of
$3.408 million due to the strengthening NZD.
Total expenses were $10.725 million less than budgeted. This was due to lower personnel expenses of
$5.606 million as the result of staff vacancies. Operating expenses were $6.977 million less than budget.
This was mainly due to delays in planned travel across the Ministry and an under-spend in consultant and
contractor expenses due to timing delays in property projects. These reductions were offset by an increase
in accommodation costs of $1.005 million arising from opening more posts.
A loss on derivatives of $11.971 million was incurred due to a strengthening NZD.
Statement of financial position
Cash balances were $37.876 million less than budget because we did not drawdown as much cash as initially
planned. This was due to delays in our capital programme; consequently our crown debtor balance is higher
than budgeted.
Debtors and other receivables are $3.740 million higher than budget as although the official residence in
The Hague was sold in June 2016, sale proceeds were not received until July 2016.
Property, plant and equipment was $39.075 million lower than budget. This was mainly due to an underspend in capital due to timing delays experienced with a number of significant property projects, for
example the rebuild of the Beijing Chancery ($4.697 million), refurbishment of the Canberra chancery ($4.490
million), an upgrade of services at the New Delhi chancery ($0.930 million), and a number of smaller property
projects that cumulatively under-spent due to timing delays by amounts up to $0.700 million. In addition
there were delays in minor capital works ($1.870 million) and budgeted official residence purchases that did
not eventuate ($15.3 million).
Intangibles were $3.549 million higher than the initial budget as a decision was made to allocate additional
funds to two business improvement projects (PAM project $2.400 million and EIM project $0.500 million) in
subsequent budget rounds.
Provisions for employee entitlements were reduced by $1.601 million during the year following a review
of the restructuring provision; however, this reduction has been largely offset by the recognition of a
provision for a liability related to the Holidays Act 2003.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of cash flows
Receipts from Revenue Crown were lower than budgeted by $55.412 million as less revenue was drawn
down in cash than forecasted mainly due to the return of funds related to forecast under-spending and
expense transfers approved by joint Ministers. The reduced cash outflows from the purchase of property,
plant and equipment of $40.715 million less than budgeted is related to delays in capital projects/purchases
programme.
Cash outflows for the purchase of intangibles was $5.828 million higher than budget due to delays in 201415 coming to charge in 2015-16 and additional expenses being incurred on two business improvements
projects.
Note 22: Events after the balance sheet date
There have been no significant events after the balance sheet date.
75
FINANCIAL STATEMENTS
76
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Non-departmental statement of
performance
The Minister of Foreign Affairs purchased from us provision of the following two output expenses in Vote
Foreign Affairs and Trade.
Vote Foreign Affairs and Trade
•
Disbursements made and exemptions from taxation
•
Subscriptions to International Organisations
The following statement of performance records results and services delivered for each of the above output
expenses as agreed between the Minister of Foreign Affairs and the Secretary of Foreign Affairs and Trade
in the Strategic Intentions 2015-2019 and the 2015-16 Estimates of Appropriations as required by section 19C
of the Public Finance Act 1989.
Disbursements made and exemptions from taxation PLA
Refund of New Zealand local body rates for offices and residential premises of overseas diplomatic
missions and consular posts pursuant to section 21 of the Diplomatic Privileges and Immunities Act 1968.
2015-16
Performance measures
Percentage of diplomatic and consular corps respondents satisfied with
quality of service provided in reimbursing New Zealand local body rates
(4 or better on a scale of 1-5)
Budgeted
Standard
80%
2014-15
Actual
Standard
Actual
Standard
91%
New measure
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
1,658
1,600
(58)
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
Actual
$000
1,164
Annual appropriations
EXPLANATION OF SIGNIFICANT VARIANCES
The over-spend of $0.058 million between appropriation and actual expenditure relates to reimbursement
of non-beneficial taxes and levies (exempt under the Vienna convention) to foreign ministers residing in
New Zealand. The timing of this expenditure is largely out of MFAT’s control as it depends on when foreign
missions make requests for reimbursement. Although expenditure exceeded the appropriation, it is not
classified as unappropriated as we have a Permanent Legislative Authority (PLA) to incur the expenditure.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Subscriptions to International Organisations
77
This appropriation is limited to non-discretionary payments required as formal obligations arising from
New Zealand's membership of international organisations, and as a signatory to international treaties and
conventions.
2015-16
Performance measures
The Ministry's payments to international organisations are timely and
within budget
Budgeted
Standard
2014-15
Actual
Standard
Actual
Standard
Met
Met
30/06/16
Actual
$000
30/06/16
Appropriation
$000
30/06/16
Variance
$000
52,924
56,755
3,831
Payment
made in full
and on time
FINANCIAL PERFORMANCE (figures are GST exclusive)
30/06/15
Actual
$000
45,538
Annual appropriations
EXPLANATION OF SIGNIFICANT VARIANCES
The under-spend of $3.831 million between appropriation and actual expenditure is due to a strengthening
of the NZ dollar and not needing to draw down on the contingency held of unexpected calls from the UN for
peacekeeping missions.
FINANCIAL STATEMENTS
78
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Non-departmental statements and
schedules
For the year ended 30 June 2016
The following non-departmental statements and schedules record the revenue expenses, assets,
liabilities, commitments, contingent liabilities, contingent assets and trust accounts that we manage on
behalf of the Crown.
Schedule of non-departmental revenue
FOR THE YEAR ENDED 30 JUNE 2016
30/06/16
Actual
$000
30/06/15
Actual
$000
Non-departmental revenue
324
Other operational revenue
874
Net gain on foreign exchange
1,198
Total revenue
660
660
Other operational revenue is primarily the repayment of unspent grant funding, on completion of
development activities by Partners. These grants were provided for the delivery or implementation of
development activities under the New Zealand Aid Programme in prior years.
Schedule of non-departmental expenditure
FOR THE YEAR ENDED 30 JUNE 2016
30/06/16
Actual
$000
30/06/15
Actual
$000
Output funding
15,280
4,000
1,400
20,680
New Zealand Antarctic Institute
15,510
Asia New Zealand Foundation
4,000
Pacific Cooperation Foundation
1,400
Pacific Broadcasting Services
Total outputs
921
21,831
Other expenses
45,538
513,016
1,164
-
Subscriptions to International Organisations
Official Development Assistance
Diplomatic exemptions
Loss on foreign exchange
52,924
533,992
1,658
327
559,718
Total other expenses
588,901
580,398
Total operating expenses
610,732
The accompanying accounting policies and notes are an integral part of these statements and schedules. These nondepartmental balances are consolidated into the Financial Statements of the Government and therefore readers of these
statements and schedules should also refer to the Financial Statements of the Government for 2015-16.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Schedule of non-departmental assets
79
AS AT 30 JUNE 2016
30/06/15
Actual
$000
Note
30/06/16
Actual
$000
CURRENT ASSETS
20,329
Cash
4,416
2,735
Debtors and receivables
2
2,842
Prepayments
3
25,906
Total current assets
563
5,566
10,545
NON-CURRENT ASSETS
5,781
Shares in foreign organisations
5,781
Total non-current assets
31,687
Total assets
4
5,781
5,781
16,326
In addition, MFAT monitors the New Zealand Antarctic Institute – a Crown entity. We also monitor two other
entities as defined by Schedule 4 of the Public Finance Act 1989: the Pacific Cooperation Foundation, and
the Asia New Zealand Foundation. The investment in these entities is recorded within the Crown Financial
Statements on a line-by-line basis. No disclosure is made in this schedule.
Schedule of non-departmental liabilities
AS AT 30 JUNE 2016
30/06/16
Actual
$000
30/06/15
Actual
$000
CURRENT LIABILITIES
75,628
Creditors and payables
67,256
75,628
Total current liabilities
67,256
NON-CURRENT LIABILITIES
47,777
Creditors and payables
47,294
47,777
Total non-current liabilities
47,294
123,405
Total liabilities
114,550
Current Liabilities - Creditors and payables, includes $37.225 million of accruals and accounts payable for
contracts providing for the delivery or implementation of development activities under the New Zealand
Aid Programme (Vote Official Development Assistance). The balance of $30.031 million is for promissory
notes issued to the Asian Development Bank, World Bank, and Global Environment Fund by New Zealand
that will be due for encashment during the year ended 30 June 2017.
Non-Current Liabilities – Creditors and payables of $47.294 million is for promissory notes issued to the
Asian Development Bank, the World Bank, and Global Environment Fund by New Zealand, that will be due
for encashment during 2017-18 and out-years.
Creditors and other payables are non-interest bearing and are normally settled no later than 20 business
days from receipt of an accurate and valid invoice; therefore, the carrying value of creditors and other
payables approximate their fair value.
The accompanying accounting policies and notes are an integral part of these statements and schedules. These nondepartmental balances are consolidated into the Financial Statements of the Government and therefore readers of these
statements and schedules should also refer to the Financial Statements of the Government for 2015-16.
FINANCIAL STATEMENTS
80
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Schedule of non-departmental commitments
AS AT 30 JUNE 2016
MFAT on behalf of the Crown has no non-cancellable capital or lease commitments. Statement of non-departmental contingent liabilities and contingent assets
AS AT 30 JUNE 2016
Foreign
currency
'000
30/06/16
Foreign
currency
'000
NZD
$000
SDR
2,218
4,370
Multiple small-project loan
SDR
237
468
Multi-project loan
SDR
920
1,813
30/06/15
NZD
$000
Guarantees – Asian Development Bank for
loans to the Cook Islands Government
SDR
2,371
4,888
SDR
290
599
SDR
1,000
2,062
Telecommunications loan
SDR
271
559
Development bank loan
SDR
232
457
SDR
598
1,232
Development bank loan
SDR
561
1,106
SDR
206
424
Telecommunications loan
SDR
194
381
SDR
4,736
SDR
4,362
8,595
11,334
Guarantees – other
EUR
6,900
10,785
2,000
Indemnity – other
9,764
2,000
European Bank for Reconstruction and
Development
EUR
7,000
11,498
Uncalled share capital
34,596
Total non-departmental contingent liabilities
EUR
7,000
10,941
32,321
Unquantified contingent liabilities
The Crown has an unquantifiable Contingent Liability for site restoration costs at Scott Base Antarctica
should New Zealand withdraw from the Antarctic programme (2015: unquantifiable).
In addition to this the Crown has an unquantifiable Contingent Liability for the cost of replacement of
Scott Base, the base fit-out, and any other Antarctica New Zealand assets in Antarctica in the event of any
material loss or damage totalling more than $100,000.
Contingent assets
The Crown has no contingent assets (30 June 2015: nil).
The accompanying accounting policies and notes are an integral part of these statements and schedules. These nondepartmental balances are consolidated into the Financial Statements of the Government and therefore readers of these
statements and schedules should also refer to the Financial Statements of the Government for 2015-16.
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Trust Monies
81
FOR THE YEAR ENDED 30 JUNE 2016
As at
30/06/15
$000
Contribution
$000
Distribution
$000
Revenue
$000
Expense
$000
As at
30/06/16
$000
66
133
(152)
1
(12)
36
Niue Admin Building Trust Fund
293
-
(235)
7
-
65
Cook Islands Trust Fund
231
1,919
(1,843)
21
(97)
231
3
-
(3)
-
-
-
1,927
1,400
(2,952)
36
-
411
412
-
(412)
3
-
3
Account
NZ/France Friendship Trust Fund
Fred Hollows Foundation Trust
Niue Primary School Infrastructure
Project Trust
Afghanistan New Zealand Aid
Programme Trust
Niue Development Assistance Trust
2,972
1,504
(1,676)
64
Total
5,904
4,956
(7,273)
132
2,864
(109)
3,610
Purpose of Trust Accounts
New Zealand/France Friendship Fund
The New Zealand/France Friendship Fund was established to manage the distribution of revenue from
funds held in France as part of the Rainbow Warrior dispute. Funds are used for projects promoting
relations between France and New Zealand.
Niue Admin Building Trust Fund
The Niue Admin Building Trust was established to receive funds held on behalf of the French Government
committed to the construction of a new government administration building in Niue, to replace the
temporary structures used since most of the government buildings on the island were damaged/destroyed
in a cyclone several years ago.
Cook Islands Trust Fund
The Cook Islands Trust account was opened to hold funds provided by AusAID. The trust was established
following the decision by AusAID and New Zealand Aid Programme to harmonise the aid programmes for
the Cook Islands under the New Zealand Aid Programme’s management.
Fred Hollows Trust Fund
The Fred Hollows Trust account was opened to hold funds received from AusAID and to be managed as part of
the New Zealand Aid Programme for a jointly funded programme to address vision impairment in the Pacific.
Niue Primary School Infrastructure Project Trust
The Niue Primary School Infrastructure Project Trust account was set up in May 2012 to hold and manage
funds on behalf of AusAID to undertake oversight of the construction of the Niue Primary School through
the Niue Primary School infrastructure project.
Afghanistan New Zealand Aid Programme Trust
The Afghanistan New Zealand Aid Programme Trust account was set up in May 2012 to hold and manage donor
funds relating to the New Zealand Aid Programme in Afghanistan for the purpose specified within each donor
cooperation agreement for (a) Agricultural Support Programme and (b) Renewable Energy Programme.
Niue Development Assistance Trust
The Niue Trust account was opened to hold funds provided by the Australian Department of Foreign
Affairs and Trade (DFAT). The Trust was established following the decision by DFAT and the New Zealand
Aid Programme to harmonise the aid programmes for Niue under the New Zealand Aid Programme’s
management for the benefit of the Niue Government and the Niue Development Assistance Programme.
The accompanying accounting policies and notes form part of these financial statements.
FINANCIAL STATEMENTS
82
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Notes to the non-departmental statements
and schedules
For the year ended 30 June 2016
Note 1: Non-departmental statement of accounting policies
REPORTING ENTITY
These non-departmental schedules and statements
present financial information on public funds
managed by MFAT on behalf of the Crown.
These non-departmental balances are consolidated
into the Financial Statements of the Government for
year ended 30 June 2016. For a full understanding of
the Crown’s financial position, results of operations
and cash flows for the year, reference should
also be made to the Financial Statements of the
Government.
Foreign exchange gains and losses resulting from
the settlement of such transactions and from the
translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign
currencies are recognised in the schedule of nondepartmental revenue or expenses.
Debtors and receivables
Debtors and receivables are recorded at estimated
realisable value, after providing for doubtful and
uncollectable debts.
Contingent liabilities
BASIS OF PREPARATION
The non-departmental schedules and statements
have been prepared in accordance with the
accounting policies of the Financial Statements of
the Government, Treasury Instructions and Treasury
Circulars.
Measurement and recognition rules applied in the
preparation of these non-departmental schedules
and statements are consistent with New Zealand
generally accepted accounting practice (tier 1 Public
Sector Public Benefit Entity Accounting Standards)
as appropriate for public benefit entities.
Contingent liabilities and contingent assets are
recorded in the Statement of Contingent Liabilities
and Contingent Assets at the point at which the
contingency is evident. Contingent liabilities are
disclosed if the possibility that they will crystallise
is not remote. Contingent assets are disclosed if it is
probable that the benefits will be realised.
Other liabilities and provisions
SIGNIFICANT ACCOUNTING POLICIES
Other liabilities and provisions are recorded at
the best estimate of the expenditure required to
settle the obligation. Liabilities and provisions to
be settled beyond 12 months are recorded at their
present value.
Grants
Investments
Where grants are discretionary until payment, the
expense is recognised when the payment is advised.
Otherwise, the expense (and corresponding liability)
is recognised when MFAT does not have discretion
over the payment. For example, for grants with
conditions attached, the expense/liability is
recognised when the specified criteria have been
fulfilled and notice has been given to us. For grants
without conditions attached, the expense/liability
is recognised when we have an unconditional
obligation to make payment.
Where MFAT holds a non-controlling, minority
interest, the shares are valued at cost in the
financial statements.
Foreign currency transactions
Foreign currency transactions are translated
into New Zealand dollars using the exchange
rates prevailing at the dates of the transactions.
Associates are entities in which MFAT has significant
influence, but not control over their operating and
financial policies. In our financial statements, our
investment in associates has been valued by the
equity method.
Goods and services tax
All items in the financial statements, including
appropriation statements, are stated exclusive
of GST. Receivables and payables are stated on a
GST-inclusive basis. In accordance with Treasury
instructions, GST is returned on revenue received
on behalf of the Crown, where applicable. However,
FINANCIAL STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
an input tax deduction is not claimed on nondepartmental expenditure. Instead, the amount of
GST applicable to non-departmental expenditure
is recognised as a separate expense and eliminated
against GST revenue on consolidation of the
government financial statements.
83
Critical accounting estimates
There are no critical estimates or assumptions that
would have a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities within the next financial year.
Budget figures
The budget figures are those included in the MFAT
2015-16 main estimates for the year ended 30 June
2016.
Note 2: Debtors and receivables
Debtors and receivables primarily relate to
recoveries of payments made on behalf of
the Government of Comoros contribution to
a geothermal survey and the European Union
contribution to the Pacific Energy Conference.
Note 3: Prepayments
Prepayments relate to the Official Development
Assistance (ODA) programme for advances made
under contracts for service and New Zealand’s
membership to Regional Agencies recognised over a
calendar year.
Note 4: Shares
MFAT held the following shares as at balance date.
European Bank for Reconstruction and Development
30/06/15
At cost
NZD$000
30/06/16
At net
current
value
NZD $000
Type
5,781
2,711
Ordinary
5,781
2,711
Total
Number
Share value
EUR '000
Paid in value
EUR ‘000
1,050
10,500
3,500
The European Bank for Reconstruction and
Development’s authorised share capital is EUR 30
billion divided into 3 million shares, having a face value
of EUR 10,000 each. New Zealand has been allocated
1,050 shares, amounting to 0.04 percent of the bank’s
capital. The authorised share capital is divided into
paid-in and callable shares. The total par value of paidin shares is EUR 3.500 million. A contingent liability
exists for EUR 7 million for uncalled share capital. The
shares have been valued at cost.
At net
current
value
NZD $000
At cost
NZD $000
2,660
5,781
2,660
5,781
APPROPRIATION STATEMENTS
84
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Appropriation statements
Statement of Departmental Expenditure and Capital Expenditure against
Appropriations
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Appropriation
Voted*
$000
Location of
end-of -year
performance
information **
1,638
2,000
1
18,284
18,286
1
30/06/15
Actual
$000
30/06/15
Actual
$000
VOTE FOREIGN AFFAIRS AND TRADE
Appropriations for output expenses
1,241
18,232
2,110
66,763
Administration of diplomatic privileges and immunities
Consular services
Pacific Security Fund
Policy advice and representation: international institutions
2,396
2,759
1
72,203
72,327
1
216,717
Policy advice and representation: other countries
221,975
228,745
1
12
Policy advice and representation: other countries
(permanent legislative authority)
20
20
1
45
175
1
7,187
7,786
1
-
-
-
323,748
332,098
72
Promotional activities: other countries
7,149
Services for Other New Zealand Agencies overseas
9,473
Small Island Developing States conference: support to Samoa
321,769
Sub-total
VOTE OFFICIAL DEVELOPMENT ASSISTANCE
Appropriations for output expenses
55,141
Management of New Zealand Official Development
Assistance
58,079
59,477
55,141
Sub-total
58,079
59,477
381,827
391,575
11,971
-
376,910
Total departmental output expenditure
1
Re-measurements
(6,148)
60
(6,088)
370,822
Unrealised (gain)/loss on the re-measurement of foreign
exchange contracts
Movement in discount rate for Long Service Leave and
Retirement Leave
Total re-measurements
Total departmental expenditure including remeasurements
307
-
12,278
-
394,105
391,575
Appropriations for Departmental capital expenditure
52,974
Ministry of Foreign Affairs and Trade - capital expenditure
(permanent legislative authority)
41,638
72,962
52,974
Total capital expenditure
41,638
72,962
* This includes adjustments made in the supplementary estimates.
** The numbers in this column represent where the end-of-year performance information has been reported for each
appropriation administered by MFAT, as detailed below:
1. MFAT’s annual report.
1
APPROPRIATION STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Departmental Expenses and Capital Expenditure incurred
without, or in excess of, appropriation or other authority
85
FOR THE YEAR ENDED 30 JUNE 2016
MFAT had no departmental unappropriated expenditure for the year ended 30 June 2016 (30 June 2015: nil).
Statement of Departmental Capital Injections
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Actual capital injections
$000
30/06/16
Actual capital
injections
$000
30/06/16
Approved
appropriation
$000
-
-
VOTE FOREIGN AFFAIRS AND TRADE
20,000
Ministry of Foreign Affairs and Trade capital injection
Statement of Departmental Capital Injections without, or in excess of,
authority
FOR THE YEAR ENDED 30 JUNE 2016
MFAT has not received any capital injections during the year without, or in excess of, authority
(30 June 2015: nil).
The accompanying accounting policies and notes form part of these financial statements.
APPROPRIATION STATEMENTS
86
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of non-departmental expenditure and capital expenditure against
appropriations
FOR THE YEAR ENDED 30 JUNE 2016
30/06/15
Actual
$000
30/06/16
Actual
$000
30/06/16
Appropriation
Voted
$000
Location of
end-of-year
performance
information***
VOTE FOREIGN AFFAIRS AND TRADE
Non-departmental output expenses
Annual
15,280
15,510
15,510
2
4,000
Promotion of Asian Skills and Relationships
4,000
4,000
3
1,400
Pacific Cooperation Foundation
1,400
1,400
4
921
921
4
21,831
21,831
1,658
1,600
5
5
20,680
Antarctic Research and Support
Pacific Broadcasting Services
Total non-departmental output expenses
Non-departmental other expenses
1,164
Disbursements made, and exemptions from taxation permanent legislative authority
Annual
45,538
Subscriptions to International Organisations
52,924
56,755
46,702
Total non-departmental other expenses
54,582
58,355
67,382
Total
76,413
80,186
30/06/16
Actual
$000
30/06/16
Appropriation
Voted
$000
International Agency Funding *
-
-
International Development Assistance *
-
-
96,909
100,000
1
1
30/06/15
Actual
$000
Location of
end-of-year
performance
information***
VOTE OFFICIAL DEVELOPMENT ASSISTANCE
Other expenses incurred by the crown
91,013
422,003
513,016
International Agency Funding **
International Development Assistance **
437,083
429,849
Total
533,992
529,849
* Multi-Year Appropriation 1 July 2012 – 30 June 2015.
** Multi-Year Appropriation 1 July 2015 – 30 June 2018.
*** The numbers in this column represent where the end-of-year performance information has been reported for each
appropriation administered by MFAT, as detailed below:
1. To be reported in the Minister of Foreign Affairs report appended to this annual report.
2. To be reported by Antarctica NZ in their Annual Report to be tabled in Parliament.
3. To be reported by the Asia New Zealand Foundation in their Statement of Service Performance to be tabled in Parliament.
4. To be reported by the Pacific Cooperation Foundation in their Statement of Service Performance to be tabled in Parliament.
5. MFAT’s annual report.
The accompanying accounting policies and notes are an integral part of these statements and schedules. These nondepartmental balances are consolidated into the Financial Statements of the Government and therefore readers of these
statements and schedules should also refer to the Financial Statements of the Government for 2015-16.
APPROPRIATION STATEMENTS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of non-departmental expenditure and capital expenditure against
appropriations
FOR THE YEAR ENDED 30 JUNE 2016
During the year ended 30 June 2016, MFAT had two multi-year appropriations in Vote Official Development
Assistance: International Agency unding and International Development Assistance.
These funded non-departmental expenses to be incurred by the Crown for the provision of assistance for
development activities for Pacific Island and non-Pacific countries (including Asian, African, Latin American,
Caribbean, and Middle Eastern countries).
This assistance, which included some humanitarian assistance, was provided to development
organisations, partner countries and through other delivery mechanisms, to implement a range of
development activities including the design, management, implementation and evaluation of those
partner-led activities. This assistance is also provided to multilateral agencies and international voluntary
agencies to assist them to provide development.
The assistance is consistent with the government’s directions and the Minister’s requirements for the
New Zealand Aid Programme to work with development partners to ensure aid expenditure is delivered
efficiently and is targeted as closely as possible to need. Both appropriations commenced on 1 July 2015 and
expire on 30 June 2018.
Appropriation
International Agency Funding
$000
International Development Assistance
$000
300,000
1,400,805
-
16,437
Original appropriation
Adjustments 2015-16
Adjusted appropriation
300,000
1,417,242
Actual to 2015-16 year end
(96,909)*
(437,083)**
Appropriation Remaining
203,091
980,159
* The mains budget for 2015-16 was $100.000 million.
** The mains budget for 2015-16 was $441.884 million.
The accompanying accounting policies and notes are an integral part of these statements and schedules. These nondepartmental balances are consolidated into the Financial Statements of the Government and therefore readers of these
statements and schedules should also refer to the Financial Statements of the Government for 2015-16.
87
OUR LEGAL RESPONSIBILITES
88
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Our legal responsibilities
For the year ended 30 June 2016
CROWN ENTITIES
Asia New Zealand Foundation
MFAT’s relationship to Crown entities and
providers of other organisations that provide nondepartmental output classes funded under Vote
Foreign Affairs and Trade is as follows.
The Asia New Zealand Foundation (formerly Asia
2000 Foundation) was established in 1994 as an
incorporated trust with accountability to the Crown
under the Public Finance Act 1989. The Government
provides funding to the foundation through MFAT
on the basis of an annual output agreement. The
foundation works to deepen New Zealanders’
knowledge and understanding of Asia through its
activities in education, business, media, Track II
(i.e. non-government discussion of policy issues),
research, arts, and community. We act on behalf
of the Minister as purchase adviser and contract
manager in respect of the foundation. We oversee
preparation of the annual output agreement and
coordinate the appropriation process as part of the
foundation’s performance and financial monitoring.
New Zealand Antarctic Institute
The New Zealand Antarctic Institute is a Crown
entity established under the New Zealand Antarctic
Institute Act 1996. Its purpose is to develop, manage,
and execute New Zealand’s activities in Antarctica
and the Southern Ocean, in particular the Ross
Dependency, in cooperation with us and other
government agencies. Our main responsibility is
to monitor on behalf of the Minister the institute’s
effectiveness, efficiency, and management of risks.
We do this by providing advice on strategic direction
and capability, assessing the appropriateness
of output and performance measures for the
Statement of Intent, providing advice to the
Minister on board appointments and inductions,
and monitoring performance against expected
outputs and outcomes.
Pacific Cooperation Foundation
The Pacific Cooperation Foundation was established
as a charitable trust in June 2002 with accountability
to the Crown under the Public Finance Act 1989. By
undertaking targeted projects the foundation acts
as a catalyst for strengthening New Zealand–Pacific
relationships, providing information, facilitating
outcomes, and developing networks within the
Pacific region. The foundation has been funded
since 2004 through Vote Foreign Affairs and Trade.
Our Chief Executive is an ex-officio member of the
Foundation’s Board of Trustees. We act on behalf
of the Minister as purchase and ownership adviser
in respect of the foundation. We assist with the
preparation of the purchase agreement between
the foundation and the Minister, coordinate
the appropriation process, provide financial
and performance monitoring, advise on the
foundation’s strategic direction and capability, and
report quarterly to the Minister.
New Zealand Trade and Enterprise (NZTE)
New Zealand Trade and Enterprise is a Crown
entity. MFAT, in conjunction with the Ministry of
Business, Innovation and Employment, has a joint
role in monitoring the performance of NZTE on
behalf of the Ministers of Trade and of Economic
Development, although NZTE is not funded from
Vote Foreign Affairs and Trade. We provide regular
briefing and comment to Ministers on NZTE’s
performance. Our Chief Executive acts as a special
adviser to the NZTE board. This dialogue ensures
high-level policy coordination and close alignment
of goals between the two organisations.
OUR LEGAL RESPONSIBILITES
MINISTRY OF FOREIGN AFFAIRS AND TRADE
ACTS WE ADMINISTER
• Western Samoa Act 1961
• Antarctica Act 1960
• MFAT also administers a number of statutory
regulations made under the above Acts,
particularly in the areas of UN Security Council
(UNSC) sanctions, diplomatic privileges and
immunities, and Tokelau
• Antarctica (Environmental Protection) Act 1994
• Antarctic Marine Living Resources Act 1981
• Anti-Personnel Mines Prohibition Act 1998
• Cluster Munitions Prohibition Act 2009
• Export controls on strategic goods are
administered by us under the Customs Export
Prohibition Order 2011.
• Commonwealth Countries Act 1977
TREATIES
• Consular Privileges and Immunities Act 1971
• Cook Islands Act 1915
The following international agreements were
signed, ratified, accepted, approved or acceded
to by New Zealand, or entered into force for New
Zealand between 1 July 2015 and 30 June 2016
• Cook Islands Constitution Act 1964
Multilateral treaties
• Diplomatic Privileges and Immunities Act 1968
1. Agreement on Government Procurement done
at Marrakesh on 15 April 1994 as amended
by the Protocol Amending the Agreement on
Government Procurement done at Geneva on 30
March 2012 – Acceded to on 10 July 2015
• Chemical Weapons Prohibition Act 1996
• Continental Shelf Act 1964
• Foreign Affairs Act 1988
• Geneva Conventions Act 1958
• International Crimes and International Criminal
Court Act 2000 (jointly administered with the
Ministry of Justice)
• Kermadec Islands Act 1887
• Mercenary Activities (Prohibition) Act 2004
• New Zealand Antarctic Institute Act 1996
• New Zealand Export–Import Corporation
Dissolution Act 1992
• New Zealand Nuclear Free Zone, Disarmament
and Arms Control Act 1987
• Niue Act 1966
• Niue Constitution Act 1974
• Nuclear-Test-Ban Act 1999
• Pitcairn Trials Act 2002
• Territorial Sea, Contiguous Zone, and Exclusive
Economic Zone Act 1977
• Terrorism Suppression Act 2002 (jointly
administered with the Ministry of Justice)
• Tokelau Act 1948
• Tokelau (Territorial Sea and Exclusive Economic
Zone) Act 1977
2. World Trade Organization: Trade Facilitation
Agreement – Accepted 29 September 2015
3. Asian Infrastructure Investment Bank Articles
of Agreement – Signed 29 June 2015 and entered
into force 25 December 2015
4. Maritime Labour Convention 2006 – signed 9
March 2016, ratified on 9 March 2016
5. Paris Agreement (on climate change) – signed 22
April 2016
Bilateral/Plurilateral treaties
6. Agreement between the Government of Samoa
and the Government of New Zealand for the
Elimination of Double Taxation with Respect
to Taxes on Income and the Prevention of Tax
Evasion and Avoidance – Signed 8 July 2015 and
entered into force 23 December 2015
7. Protocol Amending the Air Services Agreement
between the Swiss Federal Council and the
Government of New Zealand – Signed 19
November 2014 and entered into force 27 July
2015
• United Nations Act 1946
8. Air Services Agreement between the Government
of the Kingdom of Cambodia and the Government
of New Zealand – Signed 19 August 2015
• United Nations Convention on the Law of the Sea
Act 1996
9. Exchange of Letters constituting an
Agreement to Amend the Agreement between
89
OUR LEGAL RESPONSIBILITES
90
the Government of New Zealand and the
Government of the United Arab Emirates on
Air Services – Signed and entered into force 7
September 2015
10.Agreement between the Government of the State
of Qatar and the Government of New Zealand for
Air Services – Signed 9 September 2015
11.Amendment of the Agreement related to Air
Transport dated 9 November 1967 between
France and New Zealand – Signed and entered
into force 22 September 2015
12.Air Services Agreement between the Government
of New Zealand and the Government of the
Republic of Seychelles – Signed and entered into
force 29 September 2015
13.Air Services Agreement between the Government
of New Zealand and the Government of the
Oriental Republic of Uruguay – Signed 30
September 2015
14.Agreement on a Working Holiday Scheme
Between the Government of the Republic of
Lithuania and the Government of New Zealand –
Signed 1 October 2015
15.Agreement between the Government of New
Zealand and the Government of the Republic of
Poland Concerning the Co-Production of Films –
Signed 21 October 2015 and entered into force 29
February 2016
16.Air Services Agreement between the Government
of the State of Kuwait and the Government of
New Zealand – Signed 23 October 2015
17.Free Trade Agreement between New Zealand and
the Republic of Korea – Signed 23 March 2015 and
entered into force 20 December 2015
18.Third Protocol to the Agreement between the
Government of New Zealand and the Government
of Malaysia for the Avoidance of Double Taxation
and Prevention of Fiscal Evasion with Respect to
Taxes on Income – Signed 6 November 2012 and
entered into force 12 January 2016
19.Trans-Pacific Partnership Agreement – Signed 4
February 2016
20.Air Services Agreement between the Government
of New Zealand and the Government of the
Kingdom of Saudi Arabia – Signed 4 February 2016
21.Agreement on Film Co-Production Between
the Government of New Zealand and the
Government of the State of Israel – Signed 1
March 2016
MINISTRY OF FOREIGN AFFAIRS AND TRADE
22.Protocol to Amend the Agreement between the
Government of the Socialist Republic of Viet
Nam and the Government of New Zealand on Air
Services – Signed 19 March 2015 and entered into
force 11 March 2016
23.Agreement between the Government of New
Zealand and the Government of the Republic of
San Marino on the Exchange of Information with
Respect to Taxes – Signed 1 April 2016
24.Air Services Agreement between the Government
of New Zealand and the Government of the
Republic of India – Signed 1 May 2016
25.Exchange of Letters Amending the Air Transport
Agreement between the Government of New
Zealand and Government of the French Republic
– Signed and entered into force 2 May 2016
26.Air Services Agreement between the Government
of New Zealand and the Government of the
Hellenic Republic – Signed 28 May 2015 and
entered into force 11 May 2016
27.Agreement between the Government of New
Zealand and the Government of the United
States of America on Technology Safeguards
Associated with United States Participation in
Space Launches from New Zealand – Signed 16
June 2016.
INDEPENDENT AUDITOR'S REPORT
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Independent Auditor’s Report
91
To the readers of the Ministry of Foreign Affairs and Trade’s
annual report for the year ended 30 June 2016
The Auditor-General is the auditor of the Ministry
of Foreign Affairs and Trade (the Ministry). The
Auditor-General has appointed me, Karen Young,
using the staff and resources of Audit New Zealand,
to carry out the audit on her behalf of:
• the financial statements of the Ministry on
pages 50 to 75, that comprise the statement of
financial position, statement of commitments,
statement of contingent liabilities and
contingent assets as at 30 June 2016, the
statement of comprehensive revenue and
expense, statement of changes in equity, and
statement of cash flows for the year ended
on that date and the notes to the financial
statements that include accounting policies and
other explanatory information;
• the performance information prepared by the
Ministry for the year ended 30 June 2016 on
pages 36 to 47 and pages 76 and 77;
• the statements of expenses and capital
expenditure of the Ministry for the year ended
30 June 2016 on pages 84 to 87; and
• the schedules of non-departmental activities
which are managed by the Ministry on behalf of
the Crown on pages 78 to 83 that comprise:
ɈɈ the schedules of assets, liabilities,
commitments, and contingent liabilities as at
30 June 2016;
• the performance information of the Ministry:
ɈɈ presents fairly, in all material respects, for
the year ended 30 June 2016:
ɆɆ what has been achieved with the
appropriation; and
ɆɆ the actual expenses or capital expenditure
incurred compared with the appropriated
or forecast expenses or capital
expenditure;
ɈɈ complies with generally accepted accounting
practice in New Zealand.
• the statements of expenses and capital
expenditure of the Ministry on pages 84 to 87
are presented fairly, in all material respects, in
accordance with the requirements of section 45A
of the Public Finance Act 1989.
• the schedules of non-departmental activities
which are managed by the Ministry on behalf
of the Crown on pages 78 to 83 present fairly, in
all material respects, in accordance with 2015
Treasury Instructions:
ɈɈ the assets, liabilities, commitments, and
contingent liabilities as at 30 June 2016;
ɈɈ the expenses, and revenue for the year ended
30 June 2016; and
ɈɈ the statement of trust monies for the year
ended 30 June 2016.
ɈɈ the schedules of expenditure and revenue for
the year ended 30 June 2016;
Our audit was completed on 30 September 2016. This
is the date at which our opinion is expressed.
ɈɈ the statement of trust monies for the year
ended 30 June 2016; and
The basis of our opinion is explained below. In
addition, we outline the responsibilities of the Chief
Executive and our responsibilities, and we explain
our independence.
ɈɈ the notes to the schedules that include
accounting policies and other explanatory
information.
Opinion
In our opinion:
• the financial statements of the Ministry:
ɈɈ present fairly, in all material respects:
ɆɆ its financial position as at 30 June 2016;
and
ɆɆ its financial performance and cash flows
for the year ended on that date;
ɈɈ comply with generally accepted accounting
practice in New Zealand and have been
prepared in accordance with Public Benefit
Entity Standards.
Basis of opinion
We carried out our audit in accordance with the
Auditor-General’s Auditing Standards, which
incorporate the International Standards on Auditing
(New Zealand). Those standards require that we
comply with ethical requirements and plan and
carry out our audit to obtain reasonable assurance
about whether the information we audited is free
from material misstatement.
INDEPENDENT AUDITOR'S REPORT
92
Material misstatements are differences or
omissions of amounts and disclosures that, in our
judgement, are likely to influence readers’ overall
understanding of the information we audited. If we
had found material misstatements that were not
corrected, we would have referred to them in our
opinion.
An audit involves carrying out procedures to obtain
audit evidence about the amounts and disclosures
in the information we audited. The procedures
selected depend on our judgement, including our
assessment of risks of material misstatement of
the information we audited, whether due to fraud
or error. In making those risk assessments, we
consider internal control relevant to the Ministry’s
preparation of the information we audited in order
to design audit procedures that are appropriate
in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Ministry’s internal control.
An audit also involves evaluating:
• the appropriateness of accounting policies
used and whether they have been consistently
applied;
• the reasonableness of the significant accounting
estimates and judgements made by the Chief
Executive;
• the appropriateness of the reported
performance information within the Ministry’s
framework for reporting performance;
• the adequacy of the disclosures in the
information we audited; and
• the overall presentation of the information we
audited.
We did not examine every transaction, nor do we
guarantee complete accuracy of the information
we audited. Also, we did not evaluate the security
and controls over the electronic publication of the
information we audited.
We believe we have obtained sufficient and
appropriate audit evidence to provide a basis for our
audit opinion.
Responsibilities of the Chief Executive
The Chief Executive is responsible for preparing:
• financial statements that present fairly
the Ministry’s financial position, financial
performance, and its cash flows, and that
comply with generally accepted accounting
practice in New Zealand and Public Benefit
Entity Standards;
• performance information that presents
fairly what has been achieved with each
appropriation, the expenditure incurred as
MINISTRY OF FOREIGN AFFAIRS AND TRADE
compared with expenditure expected to be
incurred, and that complies with generally
accepted accounting practice in New Zealand;
• statements of expenses and capital expenditure
of the Ministry, that are presented fairly, in
accordance with the requirements of the Public
Finance Act 1989;
• schedules of non-departmental activities, in
accordance with the Treasury Instructions, that
present fairly those activities managed by the
Ministry on behalf of the Crown.
The Chief Executive’s responsibilities arise from the
Public Finance Act 1989.
The Chief Executive is responsible for such internal
control as is determined is necessary to ensure
that the annual report is free from material
misstatement, whether due to fraud or error.
The Chief Executive is also responsible for the
publication of the annual report, whether in printed
or electronic form.
Responsibilities of the Auditor
We are responsible for expressing an independent
opinion on the information we are required to
audit, and reporting that opinion to you based on
our audit. Our responsibility arises from the Public
Audit Act 2001.
Independence
When carrying out the audit, we followed the
independence requirements of the Auditor-General,
which incorporate the independence requirements
of the External Reporting Board.
Other than the audit, we have no relationship with
or interests in the Ministry.
Karen Young
Audit New Zealand
On behalf of the Auditor-General
Wellington, New Zealand
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Prospective financial statements - unaudited
Prospective Statement of Comprehensive Revenue and Expense for the year
ending 30 June 2017
2016-17
Note
2015-16
Actual
$000
Unaudited BEFU
Forecast
$000
383,029
409,674
Revenue
Crown
Department(s)
4,125
4,941
Other revenue
7,915
3,522
Gains
Interest
Total revenue
171
-
12
20
395,252
418,157
158,338
163,069
153,318
171,154
Expenses
Personnel
Operating
1
Depreciation and amortisation
22,638
26,954
Capital charge
46,623
46,960
Other
Total output expenses
(Gain) loss on derivative financial instruments
Movement in discount rate for Long Service Leave and Retirement
Leave
910
-
381,827
408,137
11,971
-
307
-
394,105
408,137
Surplus/(deficit)
1,147
10,020
Total comprehensive revenue and expense
1,147
10,020
Total expenses
93
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
94
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Prospective Statement of Changes in Equity for the year ending 30 June 2017
2016-17
Note
2015-16
Actual
$000
Unaudited BEFU
Forecast
$000
Balance at 1 July
Taxpayers’ funds
437,668
437,668
Revaluation reserve
149,330
149,330
Total equity opening balance
586,998
586,998
Changes in taxpayers' funds
Total comprehensive revenue and expense
Repayment of surplus
Capital contribution
1,147
10,020
(13,425)
(10,020)
-
6,708
Total changes in taxpayers' funds
(12,278)
6,708
Balance at 30 June
574,720
593,706
Taxpayers’ funds
426,445
444,376
Revaluation reserve
148,275
149,330
Total equity closing balance
574,720
593,706
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Prospective Statement of Financial Position as at 30 June 2017
95
2016-17
Note
2015-16
Actual
$000
Unaudited BEFU
Forecast
$000
ASSETS
Current assets
Cash and cash equivalents
Debtors and other receivables
Prepayments
11,996
38,269
173,630
128,232
10,784
9,467
Other current assets
157
3,309
Total current assets
196,567
179,277
423,735
445,234
15,522
19,385
Non-current assets
Property, plant and equipment
Intangible assets
Other non-current assets
2
8,030
8,579
Total non-current assets
447,287
473,198
Total assets
643,854
652,475
Creditors and other payables
15,624
14,794
Repayment of surplus
13,425
10,020
Employee entitlements
16,522
20,459
Other current liabilities
10,809
1,270
Total current liabilities
56,380
46,543
1,998
4,415
LIABILITIES
Current liabilities
Non-current liabilities
Provisions
Employee entitlements
10,756
7,811
Total non-current liabilities
12,754
12,226
Total liabilities
69,134
58,769
444,376
EQUITY
Taxpayers’ funds
426,445
Revaluation reserve
148,275
149,330
Total equity
574,720
593,706
Total liabilities and equity
643,854
652,475
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
96
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Prospective Statement of Cash Flows for the year ending 30 June 2017
2016-17
Note
Cash flows from operating activities
2015-16
Actual
$000
Unaudited BEFU
Forecast
$000
3
Receipts from:
Crown
385,761
433,389
Department(s)
4,998
4,853
Other
5,150
3,630
Goods and services tax (net)
1,575
-
Payments to:
Suppliers
(150,921)
(171,377)
Employees
(161,610)
(162,846)
(46,623)
(46,960)
38,330
60,689
259
4,937
Capital charge
Net cash from operating activities
Cash flow from investing activities
Receipts from:
Sale of property, plant and equipment
Purchase of:
Property, plant and equipment
(31,260)
(49,274)
Intangible assets
(10,378)
(11,416)
Net cash from investing activities
(41,379)
(55,753)
Cash flow from financing activities
Capital contribution
-
6,708
Repayment of surplus
(4,268)
(17,644)
Net cash from financing activities
(4,268)
(10,936)
Net increase/(decrease) in cash
(7,317)
(6,000)
Cash at the beginning of the year
20,180
44,269
Effect of exchange translation adjustment
Cash at the end of the year
(867)
-
11,996
38,269
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Significant Assumptions
These forecast financial statements are based on
Budget Economic and Fiscal Update (BEFU) and
have been prepared on the basis of assumptions
as to future events that MFAT reasonably expects
to occur associated with the actions it reasonably
expects to take. They have been compiled on
the basis of existing government policies and
Ministerial expectations at the date that the
information was prepared.
The main assumptions are as follows:
• The department's activities will remain
substantially the same as for the previous year.
• Personnel costs are based on 1,568 full-time
equivalents including 627 full-time equivalents
for local staff at overseas posts.
97
• Operating costs are based on historical
experience. The general historical pattern is
expected to continue.
• Estimated year-end information for 2015-16 is
used as the opening position for the 2016-17
forecasts.
These assumptions are adopted as at 26 May 2016.
Factors that could lead to material differences
between the forecast financial statements and the
2016-17 actual financial statements include changes
to the baseline budget through new initiatives,
or technical adjustments. There are no significant
events or changes that would have a material
impact on the BEFU forecast.
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
98
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Statement of Entity-Specific Accounting Policies
REPORTING ENTITY
MFAT is a Government Department as defined by
section 2 of the Public Finance Act 1989. For the
purposes of financial reporting MFAT is a public
benefit entity.
BASIS OF PREPARATION
The forecast financial statements have been
prepared in accordance with PBE FRS 42 Prospective
Financial Statements and comply with PBE FRS 42.
The purpose of the forecast financial statements
is to facilitate Parliament’s consideration of the
appropriations for, and planned performance of
MFAT. Use of this information for other purposes
may not be appropriate. Readers are cautioned that
actual results are likely to vary from the forecast
information presented and that the variations may
be material.
AUTHORISATION STATEMENT
The forecast figures reported are those for the year
ending 30 June 2017 included in BEFU 2016. These
were authorised for issue on 5 April 2016 by the
Chief Executive who is responsible for the forecast
financial statements as presented.
The preparation of these financial statements
requires judgements, estimations and assumptions
that affect the application of policies and reported
amounts of assets and liabilities, and revenue
and expenses. The estimates and associated
assumptions are based on historical experience
and various other factors that are believed to
be reasonable under the circumstances. Actual
financial results achieved for the period covered are
likely to vary from the information presented, and
the variations maybe material.
SPECIFIC ACCOUNTING POLICIES
Revenue
between the rate at which the transaction was
recorded and the rate and which the foreign
currency for that transaction was purchased
or sold) and from the translation at year-end
exchange rates of monetary assets and liabilities
denominated in foreign currency are recognised
in the Statement of Comprehensive Revenue and
Expense.
Transactions in foreign currencies are initially
translated at the foreign exchange rate at the
date of the transaction. Foreign exchange gains
and losses resulting from the settlement of such
transactions and from the translation at year-end
exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised
in the Statement of Comprehensive Revenue and
Expense.
Non-monetary assets and liabilities measured at
historical cost in a foreign currency are translated
into New Zealand dollars at a foreign exchange rate
that materially represents the exchange rate at
the date of the transaction. Non-monetary assets
and liabilities denominated in foreign currencies
and measured at fair value are translated into New
Zealand dollars at the exchange rate applicable at
the fair value date.
The associated foreign exchange gains or losses
follow the fair value gains to the Statement of
Comprehensive Revenue and Expense.
Derivatives
Derivative financial instruments are recognised
both initially and subsequently at fair value. They
are reported as either assets or liabilities depending
on whether the derivative is in a net gain or net
loss position respectively. Movements in the value
of derivatives are recognised in the Statement of
Comprehensive Revenue and Expense.
Revenue is derived through the provision of outputs
to the Crown and from services to third parties.
Revenue from the Crown is recognised in the
Prospective Statement of Comprehensive Revenue
and Expense when it is drawn down from Treasury.
This is applied evenly throughout the year. All other
revenue is recognised in the Prospective Statement
of Comprehensive Revenue and Expense when
earned.
Property, plant and equipment
Foreign currency
Other property, plant and equipment, which include
leasehold improvements, furniture and fittings,
computer equipment, motor vehicles and office
Foreign exchange gains and losses resulting from
settlement of such transactions (the difference
Revaluations
Land and buildings
Land and buildings are revalued at least every three
years, or whenever the carrying amount differs
materially to fair value. A revaluation was last
completed on 31 October 2014.
Other property, plant and equipment - at cost
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
MINISTRY OF FOREIGN AFFAIRS AND TRADE
equipment, are recorded at cost less accumulated
depreciation and accumulated impairment losses.
"Indirect Costs" are those costs directly attributed
to Operational Cost Centres.
Capitalisation thresholds applied are set out below.
"Corporate Costs" are those costs of Support Service
Cost Centres attributed to Operational Cost Centres
as overhead.
• Works of Art - $2,000.
• All other property, plant and equipment except
for PCs and laptops - $5,000.
Direct costs assigned to outputs
Depreciation
Those direct costs that can be specifically attributed
to an output are charged direct to that output.
The estimated useful lives of property, plant and
equipment are set out below.
• Buildings - structure - 35 to 60 years.
• Buildings - fit outs - 3 to 20 years.
Direct Costing is used mainly for Services for Other
New Zealand Agencies, Trade Access Support
Programmes, Pacific Security Fund and some local
staff pension schemes.
• Buildings - services - 3 to 20 years.
Direct Costing makes up approximately 14 percent
(2014-15: 16 percent) of MFAT’s costs.
• Leasehold improvements - Period of MFAT’s
expected occupancy with a maximum of 15 years.
Basis for allocating indirect costs to outputs
• IT equipment/hardware - 3 to 5 years.
• Motor vehicles - 8 years.
• Furniture and fittings - 6 years 8 months.
• Equipment - 5 to 20 years.
• Plant and machinery - 10 years.
Intangible assets
Capitalisation thresholds applied are:
• Purchased software - $5,000.
• Internally developed software - $10,000.
The estimated useful lives of intangible assets are
set out below:
• Purchased software - 3 to 8 years.
• Internally developed software - 3 to 8 years.
Cost allocation
MFAT has determined the cost of outputs using the
cost allocation system outlined below.
Definition of terms
"Operational Cost Centre" is a unit that produces
outputs. All overseas posts and regional and
functional divisions in Wellington are Operational
Cost Centres.
"Support Service Cost Centre" is a unit that provides
Support Services to Operational Cost Centres.
"Output Allocation Factor" is a ratio calculated
from an estimate of time each officer spends on
producing specified outputs.
"Direct Costs" are those costs directly attributed to
outputs.
All other costs are assigned through a methodology
that pools indirect costs in a cost pool and assigns
input costs to outputs.
Corporate Costs are allocated to Operational Cost
Centres based on headcount.
Corporate Costs account for approximately 19
percent (2014-15: 18 percent) of MFAT’s costs.
Indirect Costs account for approximately 67 percent
(2014-15: 66 percent) of MFAT’s costs.
Operational Cost Centre indirect costs including
share of Corporate Costs are then assigned to
outputs on the basis of an Output Allocation Factor.
99
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
100
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Notes to the Prospective Financial Statements
NOTE 1 - OPERATING EXPENSES
2015-16
Actual
$000
2016-17
Unaudited BEFU
Forecast
$000
Operating expenses include:
Audit fees
Consultants' fees
Overseas travel
403
392
2,030
4,621
16,703
17,615
Domestic travel
5,502
4,696
Accommodation
57,617
58,412
Other
Total operating expenses
71,063
85,418
153,318
171,154
NOTE 2 - PROPERTY, PLANT AND EQUIPMENT
Land
$000
Buildings
$000
Furniture &
Fittings
$000
Other
$000
Total
$000
265,530
117,408
86,222
68,048
537,208
-
24,387
16,997
7,890
49,274
Cost or revaluation
Balance as at 1 July 2016
Additions by purchase – unaudited BEFU
forecast
Disposals – unaudited BEFU forecast
-
(9,274)
-
(600)
(9,874)
265,530
132,521
103,219
75,338
576,608
Balance as at 1 July 2016
-
10,510
53,976
51,022
115,508
Depreciation expense – unaudited BEFU
forecast
-
7,771
7,815
5,217
20,803
Eliminate on disposal
-
(4,637)
-
(300)
(4,937)
Balance as at 30 June 2017
-
13,644
61,791
55,939
131,374
265,530
118,877
41,428
19,399
445,234
Balance as at 30 June 2017
Accumulated depreciation and
impairment losses
Carrying amount as at 30 June 2017
PROSPECTIVE FINANCIAL STATEMENTS - UNAUDITED
MINISTRY OF FOREIGN AFFAIRS AND TRADE
101
NOTE 3 - RECONCILIATION OF NET SURPLUS TO NET CASH FLOWS FROM OPERATING ACTIVITIES
2015-16
Actual
$000
2016-17
Unaudited
BEFU Forecast
$000
1,147
10,020
Depreciation and amortisation expense
22,638
26,954
Net (gains)/loss on derivative financial instruments
11,971
-
867
-
Net surplus/(deficit)
Add/(less) non-cash items
Other non-cash movement
Movement in discount rate for long service leave and retirement leave
(307)
-
35,169
26,954
Gain (loss) on disposal property, plant and equipment
557
-
Total items classified as investing or financing activities
557
-
4,237
23,715
(1,230)
-
1,173
-
(2,076)
-
Total non-cash items
Add/(less) items classified as investing or financing activities
Add/(less) movements in working capital items
(Inc)/Dec in debtors and other receivables
(Inc)/Dec in prepayments
Inc/(Dec) in creditors and other payables
Inc/(Dec) in current provisions
Inc/(Dec) in current employee entitlements
(647)
-
Add/(less) movements in working capital items
1,457
23,715
38,330
60,689
Net cash from operating activities
DIPLOMATIC IMMUNITY CASES SUMMARY
102
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Diplomatic immunity cases summary
In the interests of transparency, the Ministry of Foreign Affairs and Trade now publishes an aggregate
list of alleged serious criminal offences committed by foreign representatives and accredited family
members. The dates of the incidents and the names of the countries involved are not published. Given the
small number of cases, and the small size of New Zealand’s resident diplomatic corps, releasing the yearly
statistics on immunity cases could lead to the identification of the individual(s) concerned (including the
alleged victims).
The table below outlines the number and nature of alleged serious offences involving foreign
representatives (and members of their families) who held immunity, whether the offences were considered
to warrant prosecution by Police, whether a waiver of immunity was sought by MFAT, and whether a waiver
of immunity was granted by the sending Government.
Reporting Period: July 2011-June 2016
Number and category of alleged serious offences29
- Assault (5)
- Indecent assault (2)
- Careless driving causing injury (1)
Number of alleged serious offences considered to warrant prosecution
8
5
30
Waivers sought
5
Waivers granted
1
Percentage of cases warranting prosecution where waiver sought
100%
Percentage of waivers granted to waivers sought
29
A serious offence is defined as one that carries a penalty of imprisonment for 12 months or more.
30
Police do not prosecute in every serious case for a variety of reasons, e.g. strength of evidence, alleged offender no longer in New Zealand.
20%
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
Annex: Minister of Foreign Affairs’ report on
Vote Official Development Assistance
non-departmental appropriations
This report is prepared under s19B of the Public Finance Act 1989: Provision of end-of-year
performance information by Ministers.
103
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
INTRODUCTION
104
The New Zealand Aid Programme continues to
invest in development that delivers results for
partner countries and for New Zealand. While
the Aid Programme reaches into Asia, Africa and
the Americas, its geographic focus is firmly on
the Pacific (60 percent of budget in 2015-16). Our
sustainable economic development lens combined
with New Zealand’s deep knowledge of Pacific
development issues and strong relationships across
the region support delivery of a development
programme that is valued by Pacific partners.
HUMANITARIAN AID IN THE PACIFIC
The Pacific Island countries are amongst the
most vulnerable in the world to natural hazards,
including cyclones. This year, Tropical Cyclone
Winston (Category 5 – Severe) struck Fiji, causing
loss of life and widespread destruction. New
Zealand responded within 24 hours through
the provision of life-saving pre-positioned
relief supplies and emergency funding. New
Zealand supported the Fiji Government’s initial
assessment of damage through providing aerial
surveillance support with an NZDF P3 Orion. New
Zealand deployed over 160 tonnes of life-saving
relief supplies including food, tarpaulins, water
containers and tanks, hygiene kits, generators,
chainsaws and other equipment at the request
of the Fiji Government. Over 500 New Zealand
personnel were deployed to provide essential
support including medical assistance, engineering,
water desalination and logistics expertise. Overall,
the New Zealand Aid Programme provided $5.4
million for emergency relief and early recovery
activities.
Cyclone Winston also tested some of our disaster
preparedness support to Fiji. We had partnered
with the Salvation Army New Zealand and the
Salvation Army Fiji to deliver 10 certified evacuation
shelters, each with a 10,000L water tank, generator,
and pre-positioned resilience supplies. The centres
were activated and operated effectively during
Tropical Cyclone Winston.
SMALL ISLAND DEVELOPING STATES FOCUS
New Zealand places a high priority on the needs
of small island developing states. 2016 saw the
adoption of the Sustainable Development Goals by
the international community. New Zealand was a
strong advocate for the recognition of the particular
needs of small island developing states in these
goals and in the related international commitments
MINISTRY OF FOREIGN AFFAIRS AND TRADE
on development financing. We, alongside Pacific
Governments and partners are prioritising the
developments that have the potential to be gamechangers, and ensuring these projects are realised
and their objectives achieved.
PACIFIC RENEWABLE ENERGY
An example of a game-changer initiative is our
work in renewable energy. For the past two years
New Zealand has been a catalyst for international
donors to increase their support for Pacific Island
countries to shift from diesel-generated electricity
to renewable energy. By 2016, the $635 million
committed at the 2013 Pacific Energy Summit
translated into over $900 million of investments
across 70 projects in the Pacific.
The Pacific Energy Conference that New Zealand
convened in Auckland in June 2016 saw donors
commit over $1 billion for sustainable energy
projects in the Pacific. This will support Polynesia to
achieve more than 50 percent renewable energy by
2024, provide access to electricity for an estimated
1 million people in Melanesia, and help other
countries in the region to double their renewable
energy generation.
New Zealand has contributed $220 million to
energy projects in nine Pacific Countries. We have
delivered renewable energy projects in Tuvalu,
Samoa, the Cook Islands and Kiribati. As part of our
commitment to this we signed a Joint Declaration of
Cooperation on a Pacific Partnership for Sustainable
Energy with the European Union. This commitment
will expand our work into Tonga, Niue and the
Northern Pacific.
Key results from our renewable energy work
include:
• moving Tokelau from 100 percent dependence on
diesel-generated electricity to 100 percent solargenerated renewable electricity
• conversion of all the islands of the northern
Cooks from total dependence on fossil fuels to
100 percent solar power - significant progress has
been made on the main island in the southern
Cooks, Rarotonga, and all of the smaller southern
group islands will be fully resourced with solar
power in the coming months
• four outer islands in Tuvalu were shifted from
diesel-powered to solar-powered electricity.
We are also making headway with renewables in
Samoa, Tonga, Niue, Papua New Guinea and the
Solomon Islands.
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
Much of this experience is transferrable to our
work assisting small island developing states in the
Caribbean and others like the Comoros Islands with
their efforts to shift to renewable energy.
PARTNERSHIPS DELIVER RESULTS IN THE PACIFIC
The New Zealand Aid Programme’s partnerships
with other governments, regional agencies, the
private sector, and non-government organisations
enable delivery of results across the Pacific
including:
• Our partnership with the Tuvalu government led
to the innovative remediation of nine borrow
pits in Tuvalu by filling these with dredged sand.
This has improved resilience to sea level rise
in extreme weather events by increasing land
elevation above king tide levels, reduced flood
risk by making higher land available for housing
development, improved health and sanitation by
reducing surficial waste and mosquito breeding
areas, and increased land area available for
development of amenities.
• Good progress with the three-way New ZealandCook Islands-China Te Mato Vai water partnership
in Rarotonga with the Cook Islands Cabinet
agreeing to establish a Water Supply Utility, and
95 percent of construction under Stage 1 of the
project completed. Some land access issues need
to be resolved by the Cook Islands government
to continue progress and this is illustrative of
the complex context within which development
investments take place.
• Investments at regional as well as national level
across the Pacific are improving capacity and
information for better fisheries governance,
management, science, monitoring, control and
surveillance and stock assessments. These
contribute to improving sustainable economic
development of oceanic tuna stocks; reducing
illegal, unreported and unregulated fishing; and
improving management of coastal fisheries and
aquaculture.
• Our first ever development partnership with the
United Arab Emirates developed Solomon Islands’
first grid energy from a renewable source (a
1MW solar farm), which will have the capacity to
generate 4 percent of Honiara’s electricity needs.
• Pacific Island Trade and Investment delivered
the Path to Market programme in four countries
(Papua New Guinea, Fiji, Samoa and Tonga) and
assisted export deals valued at $4.7 million.
MINISTRY OF FOREIGN AFFAIRS AND TRADE
FOCUSED INVESTMENTS IN ASEAN
The ASEAN-New Zealand Strategic Partnership and
Plan of Action 2016-2020 announced by the Prime
Minister and ASEAN leaders at their 2015 Summit
has established a framework for New Zealand’s
increased aid investment of $200 million within
ASEAN over the next three years. The ASEAN
Programme is well aligned to the strategies of
People (Leadership and Education) and Prosperity
(Agriculture and Trade) that underline the Strategic
Partnership and uses New Zealand expertise to
deliver on ASEAN’s needs.
Highlights from our support for ASEAN member
countries’ development in 2015-16 include:
• 100 percent of senior officials undertaking
English language training in New Zealand
achieving at least half a band increase in their
English language ability
• 2,271 people being provided access to new
agricultural techniques over the past two
years as we sought to restore the agricultural
livelihoods of farmers affected by Typhoon
Haiyan
• an additional 115 high-value crop production
farms established and 310 new farmers trained in
commercial horticulture production in Cambodia
• the mid-term review of the Philippine-New
Zealand Dairy Project finding the project is ontrack to delivering expected results and could
be a model for smallholder dairy development in
South East Asia
• 8 out of 9 Philippines Red Cross warehouses
retrofitted.
DRAWING ON THE BEST OF NEW ZEALAND EXPERTISE
The New Zealand Aid Programme draws on New
Zealand’s expertise and skills in agriculture to
innovate and support development in the Pacific
and beyond. For example, the Wanni Dairy
Regeneration Programme in Sri Lanka (a partnership
between NGOs and the private sector) uses New
Zealand dairy industry expertise to provide farmers
with access to better dairy infrastructure and
technology. It has exceeded by 300 its target of
engaging 1,500 farmers in Dairy Farmer Cooperation
Societies, and after three years, 37 percent of
farmers have increased their income and 93 percent
of raw milk supplied is achieving a premium price.
105
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
106
MINISTRY OF FOREIGN AFFAIRS AND TRADE
GLOBAL REACH THROUGH MULTILATERAL
INVESTMENTS
• there is a move away from smaller fragmented
projects in these countries
Multilateral investments into humanitarian and
development agencies allow us to extend our
reach to more than 150 countries. This represents
approximately 18 percent of the Aid Programme’s
investments. Through these investments and our
governance roles with each of these agencies we
continue to emphasise the interests of small island
states, seeking value for money, and achievement of
results.
• projects we fund are effective and sustainable
(including budget support).
New Zealand investment has contributed to results
on a global scale including:
• The World Bank Group financed new or improved
electricity supply to nearly 29 million people over
the last three-year period, of which US$21 billion
was for energy efficiency and renewable energy.
In 2015-2016 there were 23 active Energy Access
projects worth US$1.2 billion, and 51 Energy
Efficiency projects worth US$3.2 billion.
• The Asian Development Bank built or upgraded
25,000 km of roads, which saw over 10 million
vehicle-km of daily use on average in the first full
year of operation.
• The United Nations World Food Programme
fed 76.7 million people (82 percent women and
children) in 2015.
• The United Nations Children’s Fund (UNICEF)
provided 25.5 million people with clean water in
2015.
• The United Nations Development Programme
registered 68 million new voters and improved
the livelihoods of almost 20 million people in
2015.
EVIDENCE-INFORMED PRACTICES
• Independent evaluations of New Zealand’s
development cooperation with the Cook Islands,
Niue, Samoa and Tokelau were completed in
2015. The evaluations found that New Zealand’s
aid programmes have contributed significantly
to economic and human development in each of
the four countries. The independent evaluations
found that:
• the New Zealand Aid Programme delivers highquality aid
• strong and enduring relationships have been
forged with each country
In response to these findings the Ministry will
look to strengthen its expertise to ensure that we
provide consistent and targeted advice to these and
other Pacific countries.
Three strategic research projects are under
way in the areas of Climate Change: Mitigation
and Adaptation, Small Island Developing States
Financial Sustainability, and Pacific Remittance
Costs. Findings from this research are expected to
be available in early 2017.
As part of the New Zealand Aid Programme
performance system, results data is collected
through a Strategic Results Framework. Some
key results are contextualised in the tables that
follow. Increased data availability, and increased
confidence in the robustness of this data, will
support the Ministry to make informed decisions,
and ensure effectiveness and efficiency of its
investments.
OUR EXPENDITURE
2015-16 was the first year of a three-year
appropriation. The total New Zealand Aid
Programme budget for this three-year
appropriation is $1.717 billion. Planned spend for
2015-16 was $529.849 million while final expenditure
was $533.992 million. This is $4,143 million or 0.78
percent over annual forecast. The multi-year
appropriation for aid funding provides us with a
longer time horizon within which to manage the
unpredictability of the timing of aid expenditure,
allowing us to focus on quality and delivering
results in the long term. This is recognised as global
best practice.
These were used to fund the Crown activities of the
New Zealand Aid Programme, which is managed
within the Ministry. This report is prepared under
s19B of the Public Finance Act 1989: Provision of endof-year performance information by Ministers.
This report provides service performance data
and examples selected from the range of activities
supported by the New Zealand Aid Programme
to contribute to the Ministry’s Annual Report.
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16 ODA EXPENDITURE BY REGION
2015-16 ODA EXPENDITURE BY PROGRAMME TYPE
107
$106M
$149M
$97M
$11M
TOTAL SPEND
$534M
$322M
TOTAL SPEND
$8M
$534M
$5M
$81M
$63M
$213M
60%
15%
2%
Pacific
Asia
Africa
1%
1%
20%
Americas
Middle East
Global
2015-16 ODA EXPENDITURE BY THEME
$57M
$105M
$59M
TOTAL SPEND
$534M
$145M
$168M
31%
27%
11%
Economic
Development
Human
Development
Humanitarian
11%
20%
Governance
and other
Multisector
18%
Multilateral
$12M
2%
Humanitarian
40%
Bilateral
12%
28%
Scholarships
Regional/
Thema TIC
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
108
MINISTRY OF FOREIGN AFFAIRS AND TRADE
APPROPRIATIONS
INTERNATIONAL AGENCY FUNDING
In 2015-16, the two appropriations were
International Agency Funding and International
Development Assistance. These are multi-year
appropriations, with 2015-16 the first of three years.
These appropriations are used to fund the Crown
activities of the New Zealand Aid Programme, which
is managed within the Ministry.
Performance reporting against New Zealand Aid
Programme investments in projects supported
and/or delivered by international agencies is
complex. Results can be highly variable from
year-to-year, depending on the particular projects
undertaken, and which multi-year projects are
completed in any particular financial year. Many
agencies attempt to establish 'baselines', often for a
particular year in the past, which provides context
for results reported in later years. In essence, these
development results are collected and reported
primarily for monitoring purposes rather than
‘performance measurement’ per se.
This report is prepared under s19B of the Public
Finance Act 1989: Provision of end-of-year
performance information by Ministers.
This report provides service performance data
and examples selected from the range of activities
supported by the New Zealand Aid Programme to
contribute to the Ministry’s Annual Report.
2015-16
Performance measures
(Multilateral and Humanitarian)
Budgeted
Standard
2014-15
Actual
Standard31
Actual
Standard
People provided with access to electricity (World Bank Corporate Scorecard, October 2015)
6,900,000 (2015)
19,100,000 people
(2014-15)
New measure
Area 32 provided with new and /or improved irrigation
services (World Bank - Corporate Scorecard, October 2015)
1,200,000 (2015)
743,868 hectares
(2014-15)
New measure
Farm households that have adopted improved varieties,
breeds or trees, and/or improved management practices
(Consultative Group on International Agricultural
Research)
350,000,000 (by 2030) 14,500,000 farm
households (2013)
New measure
New jobs and other livelihoods generated under
sustainable development (United Nations Development
Programme)
Not available at this
time
19,946,000
new jobs and
livelihoods (2015)
New measure
New eligible voters who are registered (United Nations
Development Programme)
Not available at this
time
68,000,000 new
eligible voters
(2015)
New measure
School children receiving school meal and take home
rations (World Food Programme)
Not available at this
time
15,700,000 school
children (2015)
New measure
Households with new or improved water (Asian
Development Bank )
960,000 (2016-2019)
37,000 households
(2015)
New measure
Students benefitting from new or improved educational
facilities (Asian Development Bank)
29,911,000 (20162019)
6,700,000 students
(2015)
New measure
People in humanitarian situations who have access to safe
drinking water (UNICEF)
100% (2017)
25,500,000 people
(2015)
New measure
Not applicable
50,000,000
displaced people
(2015)
New measure
Note: The budget standard is an aspirational target
indicating a desire for all people in humanitarian
situations to have access to safe drinking water
Displaced people (refugees/internally displaced) receiving
protection or assistance from UNHCR and its partners
(UNCHR)
Note: It is not appropriate to set a budget standard for
this measure as the number of displaced people varies
significantly across reporting timeframes
31
Represents the most recent results data available.
32
Area is represented in hectares.
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
INTERNATIONAL DEVELOPMENT ASSISTANCE
Results reported in the two tables below are
captured using the New Zealand Aid Programme
Strategic Results Framework. The framework sets
out a structure to allow monitoring of progress
against the New Zealand Aid Programme’s
Investment Priorities. These results are presented in
two categories reflecting the level of contribution
and attribution by the New Zealand Aid Programme.
The first table shows Direct Results Indicators
that can be directly attributed to our activities.
The second table presents Global Results that we
MINISTRY OF FOREIGN AFFAIRS AND TRADE
contribute to alongside other development actors.
The tables present a selection of the indicators
and their associated results. The indicators do
not represent all results of the New Zealand Aid
Programme but provide results information that
can be aggregated across Activities, Investment
Priorities, Countries and Programmes. To capture
more in-depth and comprehensive assessment of
results it is necessary to draw information from
across our monitoring and evaluation mechanisms
within the wider New Zealand Aid Programme
Performance System.
TABLE 1: DIRECT RESULTS INDICATORS
2015-16
Budgeted
Standard
2014-15
Actual
Standard
Actual
Standard
We assisted 2,043 people
to complete vocational
training. Data from
9 activities and the
Scholarships Programme.
We assisted 1,562 people
to complete vocational
training. Data from across
13 activities and the
Scholarships Programme.
We assisted 287 people
from 43 countries to
successfully complete
tertiary qualifications
through the scholarships
programme (in the 2014
calendar year)
Three solar array projects
constructed including
one of the largest in the
Southern Pacific (2.2MW of
power), delivering around
2.58MW to the national
grid. Power produced
estimated to meet 4.5% of
Samoa’s total electricity
needs
We installed 4.34MW
of renewable energy
capacity in Samoa and the
Cook Islands
Improve or maintain trend
People assisted (through training,
access to agricultural technology and
advisory support) to increase benefits
from agriculture sector (Number)
We assisted 17,136 people
to increase benefits
from the agricultural
sector. This was across
20 activities and 16,212
people were from Africa
New measure
Improve or maintain trend
People provided with new
or improved ICT services
(telecommunications and/or internet)
(Number)
30 people from Tokelau
were provided with new
or improved ICT services
New measure
Performance measures
Improved human development outcomes
Improved tertiary and skills training
outcomes measured by the number
of people that complete vocational
training and tertiary scholarships
To improve on baseline
performance:
Installed renewable energy capacity
of new or upgraded infrastructure
(MW)
Improve or maintain
trend:
In 2013/14 we assisted
1,468 people to complete
vocational training. Data
We assisted 492 people
from across 11 activities
to complete tertiary
and the scholarships
scholarships
programme. We assisted
388 people from 39
countries to successfully
complete tertiary
qualifications through the
scholarships programme
(in the 2013 calendar year)
In 2013/14 we installed
0.97MW of renewable
energy capacity in
Afghanistan and Samoa
Note this is a new
Investment Priority so
most activities are not yet
reporting results
109
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
110
Performance measures
Budgeted
Standard
2014-15
Actual
Standard
Revenue from foreign
fishing licenses in
countries where we work
In 2013/14 revenue from
foreign fishing licenses in in the fisheries sector was
countries where we work worth US$67.6m (Solomon
in the fisheries sector was Islands: US$32.6m,
worth US$45m. (Solomon Tokelau: $US$15.02m,
Islands:US$23.9m, Tokelau: Tuvalu: US$20m)
US$5m, Tuvalu: US$16.1m)
Revenue from foreign fishing licenses Improve or maintain
in the Pacific partner countries (USD$) trend:
People assisted (through training and Improve or maintain trend
advisory support) to increase benefits
from fisheries/aquaculture sector
(Number)
Additional tourists (activity specific)
(Number)
Improve or maintain trend 2,624 people were
People assisted (through training or
assisted, 2,077 of whom
advisory support) to increase benefits
were from Tonga
from trade (and labour mobility)
sector (Number)
People assisted (through training or
advisory support) to strengthen law
and justice systems (Number)
Revenue from foreign
fishing licenses in
countries where we work
in the fisheries sector was
worth US$45.2m. (Solomon
Islands: US$27.1m, Tokelau:
US$8.5m, Tuvalu: US$9.6m).
The Pacific Islands Forum
Fisheries Agency (FFA)
forecasts an estimated
US$323m revenue from
foreign fishing licenses
New measure
We assisted 246 people
through training,
mentoring and advisory
support provided by
Pacific regional agencies
(FFA, SPC), technical
advisers, NZ Ministry for
Primary Industries and NZ
training providers
Improve or maintain trend 773 tourists recorded
through Niue Tourism
Marketing
Countries that have received advisory Improve or maintain trend
support to strengthen economic
governance through bilateral
engagements (Number)
Actual
Standard
New measure
New measure
New measure
We have assisted 7
countries to strengthen
economic governance
(Cook Islands, Fiji, Kiribati,
Samoa, Solomon Islands,
Tonga and Tuvalu)
New measure
Improve or maintain trend We have assisted 1,658
people to strengthen law
and justice systems. Most
of these participants were
from Papua New Guinea,
Solomon Islands, TimorLeste, Tonga and Vanuatu
People who have received specialist
Improve or maintain trend We helped 43,452 patients New measure
health advice and treatment (Number)
to receive specialist
health advice and
treatment. This, amongst
other projects, includes
26,549 people through the
Pacific Regional Blindness
Prevention programme
and 10,219 people through
the Regional Eye Centre in
the Solomon Islands
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
Budgeted
Standard
Performance measures
2014-15
Actual
Standard
Actual
Standard
Children assisted in primary and
secondary education (through sector
support) (Number)
Improve or maintain trend We assisted 11,205
children in primary and
secondary education
in the Cook Islands and
Tonga 33
New measure
People trained to strengthen
resilience (disaster risk reduction and
climate change adaptation) (Number)
Improve or maintain trend We assisted 4,583
people to be trained to
strengthen resilience for
disaster risk reduction
and climate change
adaptation. This training
occurred in the ASEAN
countries as well as Fiji,
Indonesia and Vanuatu
New measure
Improve or maintain trend
Vulnerable people provided with
essential and useful assistance
following a natural or human-induced
disaster within Pacific and outside the
Pacific (Number)
New measure
We provided 226,629
vulnerable people with
essential and useful
assistance following a
natural or human-induced
disaster. Approximately
167,000 of these people
were part of our response
to Tropical Cyclone
Winston
Improved economic well-being
Increased returns from sustainable
fisheries measured by revenue from
foreign fishing licences
(see note below)
To improve on baseline
performance:
In 2013/14 The Pacific
Islands Forum Fisheries
Agency (FFA) reports
US$245m revenue from
foreign fishing licenses,
a 7% increase across the
Pacific
The Pacific Islands Forum
Fisheries Agency (FFA)
forecasts an estimated
US$380m revenue from
foreign fishing licenses
in the 2015 calendar year,
a 33% increase on 2013
across the Pacific
The Pacific Islands Forum
Fisheries Agency (FFA)
forecasts an estimated
US$323m revenue from
foreign fishing licenses,
a 32% increase on 2013
across the Pacific
Note: FFA has supported Pacific Island countries to make the most from their fisheries. This includes playing a role in
supporting PICs to increase their returns from foreign fishing licenses. The primary attribution for this result, however,
rests with the PNA (Parties to the Nauru Agreement) members who set and then steadily increased the benchmark prices
for purse seine vessel days. In addition, FFA has also directly contributed to generating US$28 million of new investment in
Pacific Island fisheries sectors.
Improved human development outcomes
Percentage of indicators improving at Improve or maintain trend 57%
the "Global Results” level of the New
Zealand Aid Programme Strategic
Results Framework for bilateral
partner countries
New measure
Energy supplied through the main
grids produced from renewable
energy sources in bilateral partner
countries (%)
Improve or maintain trend Data deficiencies 34
Agriculture sector - added value of
GDP in bilateral partner countries
(percentage)
Improve or maintain trend 18% averaged across 13
New measure
bilateral partner countries
33
Data for other programmes not available at time of reporting.
34
Data Deficiencies do not allow for a meaningful result to be reported at this time.
New measure
111
ANNEX: MINISTER OF FOREIGN AFFAIRS’ REPORT ON VOTE OFFICIAL
DEVELOPMENT ASSISTANCE NON-DEPARTMENTAL APPROPRIATIONS
MINISTRY OF FOREIGN AFFAIRS AND TRADE
2015-16
112
Performance measures
Individuals using the internet in
bilateral partner countries (%)
Budgeted
Standard
2014-15
Actual
Standard
Improve or maintain trend 29% averaged across 10
bilateral Pacific partner
countries. Ranging
from 9% in PNG and the
Solomon Islands to 54%
in Nauru
Actual
Standard
New measure
Tourism sector - added value of GDP in Improve or maintain trend Data deficiencies35
bilateral partner countries (%)
New measure
Improve or maintain trend 58 points averaged across
Doing business score (distance to
7 bilateral Pacific partner
frontier) in bilateral partner countries
countries
(score)
New measure
Governance and Effectiveness Index
(Rank) in bilateral partner countries
Improve or maintain trend 30th averaged across 14
countries
28 (averaged across 14
countries)
Rule of Law Index (Rank) in bilateral
partner countries
Improve or maintain trend 37th averaged across 14
countries
40 (averaged across 14
countries)
Mortality between 30 and 70 years
from CVD, cancer, diabetes or chronic
respiratory diseases in bilateral
partner countries
Improve or maintain trend Average mortality for
the 6 bilateral countries
where data was available
was 57 for males and 63
for females aged 30-70
years
New measure
Under 5 mortality rate (deaths per
1000 live births) in bilateral partner
countries
Improve or maintain trend Average under 5 mortality
rate was 33 per 1,000 live
births across 14 countries
where data was available.
This ranged from 6 in
the Cook Islands to 75 in
Papua New Guinea
New measure
Children meeting regional test
levels at grade 6 for numeracy and
literacy in bilateral partner countries
(number)
Improve or maintain trend New Zealand is the major
contributor to the Pacific
Island Literacy and
Numeracy Assessment
(PILNA). PILNA’s 2015
assessment of children
in year 6 reported the
following: Numeracy:
68% of children achieve
at or above the expected
level (68% for girls, 65%
for boys), a significant
improvement since
2012. Literacy: 46% at
or above expected level
(52% for girls, 28% for
boys). Statistically this
is reported as flat or
minimal change on the
2012 assessment
New measure
Carbon emissions per capita in
bilateral partner countries (tonnes
per capita)
Improve or maintain trend 2 tonnes per capita
averaged across 13
countries
New measure
35
Data Deficiencies do not allow for a meaningful result to be reported at this time.
DIRECTORY
Directory
Ministry Of Foreign Affairs And Trade
195 Lambton Quay
Private Bag 18 901
Wellington 5045
New Zealand
Phone +64 4 439 8000
Fax +64 4 439 8505
www.mfat.govt.nz
MINISTRY OF FOREIGN AFFAIRS AND TRADE
113