10-year financial forecast

Overview

This 10-year financial forecast spans 2008/09 – 2017/18. The forecast sets out the revenue Land Transport NZ anticipates receiving, including regionally distributed funds, Crown funds, and its anticipated allocation to activities through to 2017/18.

Figures for 2008/09 reflect the allocations adopted by Land Transport NZ for expenditure in 2008/09. Figures shown for revenue and expenditure in subsequent years reflect anticipated revenue and anticipated expenditure, and as with all forecasts are imprecise.

The forecast of anticipated revenue and expenditure is shown in figure 2

Replacement of the 10 year forecasts by those in the GPS

The Government is expected to release its Government Policy Statement in July 2008. The GPS will provide target funding allocations for all activity classes over 2009/10 – 2018/19. The NZ Transport Agency will be required to allocate funds to activities so that expenditure meets the targets in the GPS. This means that the 10 year forecasts of anticipated revenue and expenditure in the 2008/09 NLTP will soon be replaced by those in the GPS.

The 10 year forecasts are therefore presented at a summary level because it would not be helpful to release detailed allocations which would soon be overtaken by those published in the GPS.

Revenue forecast

Figure 2 shows anticipated revenue funding the NLTP.  It is based on multi year forecasts developed in March 2008 by the Ministry of Transport led revenue forecasting group comprising officials from Ministry, treasury, Transit NZ and Land Transport NZ. The anticipated revenue includes two elements:

• revenue from fuel excise duty, road user charges and motor vehicle registration fees at current levels of fees duties and charges including that expected from full hypothecation of fuel excise duty
• revenue arising from changes to fuel excise duties, road user charges and motor vehicle registration fees that are anticipated to be made to offset forecast inflation.

Figure 2: Anticipated revenue and expenditure from 2008/09 - 2017/18

[GIF, 8 KB]

 

	2008 /2009	2009 /2010	2010 /2011	2011 /2012	2012 /2013
Upper bound revenue	2,752	2,712	2,732	2,733	2,861
Lower bound revenue	2,752	2,634	2,576	2,494	2,536
Upper bound expenditure	2,752	2,712	2,818	2,753	2,755
Lower bound expenditure	2,752	2,634	2,576	2,494	2,536

	2013 /2014	2014 /2015	2015 /2016	2016 /2017	2017 /2018
Upper bound revenue	2,999	3,199	3,331	3,473	3,586
Lower bound revenue	2,583	2,688	2,722	2,761	2,767
Upper bound expenditure	2,851	3,199	3,331	3,505	3,536
Lower bound expenditure	2,583	2,688	2,722	2,761	2,767

Notes:

• The anticipated revenue reflects use of all fuel excise duty, road user charges and motor vehicle registration fees dedicated to transport
• Lower bound revenue is based on current rates of duties, fees and charges
• Upper bound revenue reflects changes to duties, fees and charges in line with inflation
• Expenditure is forecast at a similar activity level to that in the 2007/98 NLTP, the Government Policy Statement will soon be published. It will potentially alter expenditure and revenue forecasts.

Expenditure forecast

The anticipated expenditure over 2009/10 – 2017/18 reflects continuation of a similar level of activity as was reflected in the 2007/08 NLTP plus:

• introduction of the seed funding scheme for new and improved coastal freight services
• increased funding for travel behaviour change projects.
• Continued increases expanding public transport services
• Continued funding for the SH construction programme over the remainder of guarantee period  2008/09 – 2010/11 at the level set in 2006/07

Assumptions

When allocating funds to activity classes and making forecasts of anticipated revenue and expenditure, Land Transport NZ has relied on certain assumptions. It has relied on forecasts of revenue provided by the Ministry of Transport led revenue forecasting group whose membership also includes Transit NZ and Land Transport NZ with assistance from the Treasury. It has relied on economic circumstances being as forecast by that group, its advisors and Treasury. It has also relied on forecasts of the exchange rate and fuel prices provided by the Treasury and an assumption that while the international fuel prices may be volatile over the period of the NLTP no circumstances will arise which cause a fundamental change in supply and price from those forecast.

Land Transport NZ has assumed that the land transport programmes of approved organisations will remain in keeping with their current LTCCPs and that the way in which they interpret and implement their plans will not change.
It has also assumed that many improvement projects proposed by approved organisations will not proceed in 2008/09, similar to the situation that has occurred in recent years, despite funding provisions in LTCCPs supporting many deferred projects.

Land Transport NZ has anticipated that fuel excise duties, road user charges and motor vehicle registration fees will be changed in line with inflation rates each year, funds not spent in one year will be made available in the following year.

 

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Page updated: 30 June 2008