Welfare Bums
adding up the cost of corporate welfare in the 2016 budget
SPARE CHANGE?
Your Money, Your Voice Promoting sensible restraint of government expenditure
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ABOUT THE AUTHOR Jim Rose is a Research Fellow at the New Zealand Taxpayers’ Union and has worked at the Ministry of Business, Innovation and Employment, the Department of Labour, the Ministry of Social Development, and the New Zealand Treasury. In Australia he has worked in Canberra for the Productivity Commission, the Department of Prime Minister and Cabinet, and the Department of Finance. Jim has Masters degrees in economics and in public policy from the Australian National University and from the now National Graduate Institute for Policy Studies in Tokyo respectively. Jim blogs at www.utopiayouarestandinginit.com
Copyright Š 2016 James Rose All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the author except for the use of brief quotations in a book review or press release. Printed in New Zealand, First Printing, 2016. ISBN (softcover): 978-0-473-36211-9. ISBN (digital): 978-0-473-36212-6.
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EXECUTIVE SUMMARY Nearly $1.4 billion in taxpayer funded handouts to mendicant businesses Budget 2016 increased corporate welfare to $1.36 billion from $1.2 billion spent in the 2015/2016 financial year. The main growth areas in corporate welfare are irrigation and the “commercialization” of research and development.
KiwiRail continues to fail with Solid Energy making matters worse Taxpayers continue to throw good money after bad with KiwiRail subsidies passing the $3.5 billion mark since 2008. The costs of acquiring and bailing-out KiwiRail since 2003 is a staggering $5.3 billion — not including the additional $14.1 billion in write-downs. KiwiRail is now valued at minus $1.545 billion (i.e. a liability). Tranz Rail was acquired for $665 million in 2008 as an investment – in anticipation of dividends. Solid Energy has also put its hand out and receives another $60 million in Budget 2016 with the company now having been completely written off in the Government’s balance sheet. Worse still, with almost 20 percent of KiwiRail freight being coal from the mines of Solid Energy, there is a co-dependence which means it is possible for the dire finances of KiwiRail to become even worse if Solid Energy fails. The two are effectively co-dependent and being kept afloat by corporate welfare and the generosity of taxpayers.
National Party corporate welfare is going where no Labour Government has gone before The first few budgets of the current Government consisted of half-billion dollar annual bailouts for KiwiRail and a continuation of handouts to the usual suspects in the economic development, film and tourism portfolios. These supplicants were inherited from the last government. From the 2013 budget onwards, the scope of corporate welfare has widened into many new areas. Science and innovation funding was previously tightly targeted at basic research. Now, $250 million is distributed to co-fund “commercialisations” and start-ups for an increasing number of industries. This third report for the Taxpayers’ Union on corporate welfare finds that the mendicant business model also returned in force to the agricultural sector. Under Bill English and Steven Joyce, modern versions of “Think Big” are back with about $100 million per year in irrigation construction subsidies, $77 million per year for a primary industry growth partnership and $192 million a year for ultrafast broadband. Taxpayers fund investments that private investors gave the cold shoulder, because their risks do not make the investment worthwhile. On a per household basis, the cost of corporate welfare in Budget 2016 equals $803. This is an increase from $723 per household spent by the Government on corporate welfare in the previous financial year.
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1 HOW MUCH THIS TIME? While the dollar amount of business hand-outs in Budget 2016 increased slightly over Budget 2015 from about $1.2 billion to $1.36 billion (see figure 1) the increase is somewhat illusionary. The taxpayer got lucky in the last financial year because about $100 million in farm welfare (earmarked for irrigation projects) was not spent and has been pushed back into the coming budget year. Figure 1: Corporate welfare in budgets 2008/09 - 2016/17
Source: New Zealand Government Budget Papers, various years. Table 1 shows that primary industry and science and innovation are the growth areas in corporate welfare. Funding for privately provided fast broadband picksup about $190 million a year. Despite the hype of new broadband technologies, private investors are reliant on government hand-outs and relaxation of price regulation applying to the existing copper network in order for a return to be enticing. Solid Energy is also back at the public trough with an investment write off of $60 million – see table 1.
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Table 1: Corporate welfare in New Zealand government budgets since 2008, $million 08/09 09/10
10/11
11/12
12/13
13/14
14/15
15/16
16/17
Total
Arts, Culture & Heritage
3
11
19
10
29
4
5
18
25
124
Commerce and Consumer Affairs
6
6
6
6
7
7
6
7
7
57
Communications (ultrafast broadband)
0
25
39
150
178
205
215
191
192
1,195
Economic Development
372
419
446
379
332
284
280
356
296
3,166
Finance (ex. KiwiRail & Solid Energy)
16
44
3
108
0
30
0
0
0
202
Primary Industries
700
0
14
0
43
65
77
72
183
1,154
Science and Innovation
0
4
0
0
0
112
219
213
250
798
Tourism
76
94
119
113
98
124
124
123
132
1,003
KiwiRail
675
470
376
511
680
119
255
233
214
3,532
Solid Energy
0
0
0
25
15
180
0
0
60
280
Total:
1,848
1,074
1,022
1,303
1,382
1,130
1,179
1,213
1,360
11,508
14/15
15/16
16/17
Total
Source: New Zealand Government Budget Papers, various years. We welcome the Government’s winding down of its international film subsidies – see table 2. As a result corporate welfare in the Economic Development Vote is to fall because $100 million less is to be spent on subsidies for international films as compared to previous years – see table 2. This budget, the taxpayer is expected to fork out $35 million to the international film industry as compared to over $150 million lost to that global subsidy market in the previous budget (refer to section 5.2 of the Taxpayers’ Union report on corporate welfare published in 2015, Monopoly Money). Table 2: Film industry subsidies, Budgets 2008/09 to 2016/17, $million
New Zealand Screen Production Incentive Fund
08/09 09/10
10/11
11/12
12/13
13/14
3
19
10
29
4
11
New Zealand Screen Production Grant
76 4
42
Attracting International Screen Productions
46 1
1
New Zealand Screen Production Grant International
48
52
127
92
51
41
67
112
34
622
Total
51
63
146
102
80
44
71
154
35
746
Source: New Zealand Government Budget Papers, various years. Appendix 1 to this report sets out in a table the full calculations of corporate welfare by portfolio vote.
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2 THE CHANGING FACE OF CORPORATE WELFARE Corporate welfare has changed in a major way since the National-led government was first elected. As shown in table 1 in the previous chapter and figure 2 below, corporate welfare in Bill English’s first few budgets largely picked up the pieces National inherited. There were large bailouts for KiwiRail for instance. The balance of the hand-outs were mostly in the economic development and tourism portfolios. These items are represented by the three main colours on the first few National-led Government budgets in figure 2 (2009/2010 to 2011/2012 budgets). Figure
2:
Composition
of
corporate
welfare
since
2008.
$million
Source: New Zealand Government Budget, various years; Note: the very small sums in Vote Arts, Culture and Heritage and Vote Commerce were excluded to avoid clutter. From the 2011 and 2012 budgets onwards, the National-led Government spread the largess to ultrafast broadband and the commercialisation of new technologies. KiwiRail has declined as the dominant share of corporate welfare recipients. After inheriting a science and innovation portfolio tightly targeted at basic research that the private sector would not fund because they were public goods, hundreds of millions of dollars are now handed out to a gathering throng of supplicants under the guise of science and innovation policy. There are now large subsidies for irrigation projects that should be built and funded on a commercial basis. When the National-led government was first elected, there was next to no farm welfare; it is now a nice little earner for the primary sector – see figure 2 and table 1.
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3 STATE-OWNED ENTERPRISES Because the previous Labour-led Government renationalized KiwiRail, the National-led Government inherited a business in desperate need of bailouts when it was elected in 2008. It developed a “Turnaround Plan” which has since been abandoned. Instead of following the advice of KiwiRail’s own board and dramatically reducing the size of the business, the current Government has kept ploughing taxpayers’ money in. KiwiRail and Solid Energy were once the crown jewels of the State Owned Enterprise portfolio, the large majority of its commercial value as figure 3 shows. Taxpayers now cannot even give them away. KiwiRail and Solid Energy are not worth change on a dollar. Figure 3: Commercial valuation of KiwiRail, Solid Energy and the state owned enterprise portfolio
Source: New Zealand Treasury – information released under the Official Information Act, January 2016. As table 3 shows, the taxpayer has bailed-out KiwiRail under various guises to the tune of $3.53 billion since 2008. The Government seems to have lost interest in its failed “Turnaround Plan”. There is no end in sight. The most recent annual bailouts represent about a quarter of the annual revenue of KiwiRail.
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Table 3: Taxpayer hand-outs to KiwiRail since 2008 budget, $ million 08/09 09/10
10/11
11/12
12/13
New Zealand Railways Corporation Loans
55
55
250
108
New Zealand Railways Corporation Operating Support
90
ONTRACK Operating and Maintenance Costs
7
KiwiRail Turnaround Plan
405
14/15
15/16
16/17
11
Total 883 180
20
250
250
KiwiRail Equity Injection Rail Network and Rolling Stock Upgrade
13/14
45
71
250
94
198
210
190
1,462
323
25
46
23
24
440
11
127
New Zealand Railways Corporation Increase in Capital for the Purchase of the Crown Rail
376
376
Crown Rail Operator Loans
140
140
Crown Rail Operator Equity Injection
7
7
Total
675
470
376
511
680
Source: New Zealand Government Budget Papers, various years Note: Rail spending includes all spending for OnTrack and the New Zealand Railways Corporation. The latter was the holding company for KiwiRail and OnTrack in earlier years. They are now folded into KiwiRail with OnTrack now a division of KiwiRail. No spending on urban and commuter rail, including electrification, is included in table 3. Note: Table 3 includes a correction on previous reports by the Taxpayers’ Union regarding hand-outs to KiwiRail. $90 million in rail operating support contained in Vote Finance in Budget 2008 had not been included in the earlier reports. A company with revenues of about $700 million a year will take a long time to repay a $3.53 billion in life-support since 2008. Appendix 2 shows that the lifeline from the taxpayer is much larger than this. A total of $5.3 billion has been spent since the taxpayer got back into the rail business in 2003 with the purchase of the land underneath the railways and then Tranz Rail from Toll Holdings for $690 million. The Minister of Finance now acknowledges that KiwiRail will never be self-sustaining. Taxpayers will never see their money back. A Transport Blog image, published in response to the Green Party’s new freight policy launched on the eve of the 2016 budget, highlighted how dependent KiwiRail is on the other failing (indeed worthless) entity in the state owned enterprise portfolio, Solid Energy. As table 4 shows, Solid Energy has hoovered up $255 million in subsidies. This now worthless company was valued at $3.2 billion only a few years ago – see figure 3.
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119
255
233
214
3,532
Table 4: Solid Energy bailouts by budget 12/13
13/14
15
130
145
Solid Energy New Zealand Limited - Redeemable Preference Shares
25
25
Solid Energy New Zealand Limited - Redeemable Preference Shares Impairment
25
25
Solid Energy New Zealand Limited - Loan Facilities
14/15
15/16
Write-Off of Historical Investment in Solid Energy Total
15
180
0
0
16/17
Total
60
60
60
255
Source: New Zealand Government Budget Papers, various years. The recent proposal by the Green Party to double freight sent by rail drew attention to what was currently freighted by KiwiRail. Almost 20 percent of all freight on KiwiRail is coal. The following image, highlighted recently by Transport Blog shows the track from the West Coast Solid Energy mines is one of the few busy parts of New Zealand’s national rail network. If taxpayers were to wash their hands of Solid Energy, the living dead finances of KiwiRail would be even more dire. Figure 4: New Zealand rail freight movements by volume
Source: Transport Blog
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This conundrum shows the folly of ill-considered state ownership of businesses. The reasons why taxpayers own coal mines are lost in the mists of time. The previous government bought back the railways for $665 million but this entire investment was quickly written off. At least the previous Labour-led Government waited until Air New Zealand was on its last legs before buying in cheap. When privatisation is proposed, the defenders of state ownership complain about the loss of the dividend stream if the asset is sold. Dividends have rarely matched capital injections into state owned enterprises portfolio over the last decade as figure 5 shows. The situation appears likely to continue. Figure 5: State-owned enterprise dividends and capital injections
Source: New Zealand Treasury – information released under the Official Information Act, January 2016.
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4 THE CAPTURE OF THE SCIENCE AND INNOVATION BUDGET In 2008, science and innovation funding was tightly targeted at public good science research of the type that by its nature cannot attract private backers because it is unlikely to have an immediate commercial application. The major recipients were universities and Crown Research Institutes. From 2013, the National-led Government extended the science and innovation budget from public-good research to co-funding commercialisations and startups. This now costs taxpayers some $250 million per year – see table 5. These hand-outs go to private entrepreneurs, not to boffins and scientists interested in expanding human knowledge for the sake of society. Table 5: Corporate welfare, Vote Science and Innovation, Budgets 2008/09 to 2016/17 08/09 09/10
10/11
11/12
12/13
Realising the Benefits of Innovation
13/14
14/15
11
16
Research and Development Services and Facilities for Business and Industry
26
Building Business Innovation Research and Development Facilitation and Promotion Service
15/16
16/17
Total 27
23
20
69
32
33
65
4
4
Repayable Grants for Start-Ups
1
14
11
14
40
Research and Development Growth Grants
65
119
116
144
444
Targeted Business Research and Development Funding
36
44
30
40
149
112
219
213
250
798
Total
0
4
0
0
0
Source: New Zealand Government Budget Papers, various years. As explained in chapters 5 and 6 of the Taxpayers’ Union 2014 report on corporate welfare, Monopoly Money, central to discovering which competing new technology should survive in the market is that entrepreneurs back their judgement with their own capital. The initial incarnations of new technologies and products are often expensive and bug-infested. Many of the latest technologies are just small upgrades on the previous product. Skill and entrepreneurial endeavour is needed to harvest all of the latest available quality improvement.
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Progress arrives out of market tested betterment as Deirdre McCloskey explains:
... what mattered were two levels of ideas: the ideas for the betterments themselves (the electric motor, the airplane, the stock market), dreamed up in the heads of the new entrepreneurs drawn from the ranks of ordinary people; and the ideas in the society at large about such people and their betterments—in a word, liberalism, in all but the modern American sense. The market-tested betterment, the Great Enrichment, was itself caused by a Scottish Enlightenment version of equality, a new equality of legal rights and social dignity that made every Tom, Dick, and Harriet a potential innovator. We discover which new technologies and firms are better by testing them in the market against each other and the existing offerings. This testing starts in the capital market where entrepreneurs compete for backers by anticipating winning technologies faster than rivals. This competition weeds out inferior entrepreneurs and allows mavericks to prosper if they are the right mix of contrariness and foresight. The commercialisation of new technologies is the last place where politicians and bureaucrats risk taxpayers’ money picking winners. Industry life-cycles start with a burst of new entrants with similar products. These new products cross fertilise. In time, there is an industry shakeout where a few leapfrog with cost savings and design breakthroughs to sell the mature product. The results of this race is known at its end, not the start. The decades of delay in new technologies moving from use by 10 percent of an industry to 90 percent use is driven by the complexities of mastering new technologies. Even transformational technologies ranging from electricity to the Internet required many secondary innovations to be invented, adopted and mastered over decades to make the most of them. The quickening of technology diffusion recently makes picking winners even a greater game of chance. The race can be over before it starts for most. Too many innovators come from the awkward squad that have trouble filling out government forms, much less articulating their vague hunch of a looming breakthrough that is leading them to chance it all. Venture capitalists and angel investors specialise in marshalling these uncertainties. In this context, subsidies to commercialise technologies ask taxpayers to pick a winner while the deck is still being shuffled, the cards not fully dealt, and the need to call, raise or fold is over a cloudy far horizon. What is worse, politicians and bureaucrats are going to the track to gamble with other people’s money. If they were any good at picking winners, they would quit to join a hedge fund where their skills would be rewarded with remuneration packages bigger than the entire payroll of the Ministry of Business, Innovation and Employment. Beating the market is a serious business not done on public service salaries, literally.
12
13
6.1
Total
210.0
190.0
1.4
6.7
6.1
7.2
6.7
0.6
25.1
23.1
2.0
2016/17 budget
101.7
25.7
13.3
101.3
27.0
International Business Growth Services
19.8
5.8
15.8
Sectoral Leadership, Firm Capability, and Regional Development Operational Policy Ministerial Servicing and Crown Entity Monitoring
Policy Advice - Sectoral Leadership, Firm Capability, and Regional Development
Policy Advice - Economic Development
1.3
178.4
Policy Advice - Small Business
1.4
149.6
0.2 1.2
39.0
Enhancing Small Business Capability and Performance 1.5
25.4
Total
Vote Economic Development
25.4
Broadband Investment (Crown Fibre Holdings Capital Costs)
104.6
9.6
18.4
1.5
0.2
204.9
111.0
12.8
1.2
0.2
214.5
147.2
13.1
1.2
191.4
152.3
11.8
1.2
192.0
42.0 200.0
4.5
5.8
5.8
0.6
17.6
15.6
2.0
2015/16 budget
Crown Fibre Holdings Capital Costs (UFB2) 165.0
4.9
7.0
5.8
1.2
3.7
3.7
2014/15 budget
150.0 142.5
13.4
6.8
5.8
1.0
29.2
29.2
2013/14 budget
Crown Fibre Holdings Capital Costs
2.4
5.8
5.8
International Connectivity
39.0
5.8
5.8
10.5
4.7
5.8
5.8
18.9
Fibre Drop Costs
1.7
5.8
Retirement Commissioner
Vote Communications
0.4
Administration of Trade Remedies
Vote Commerce and Consumer Affairs
10.9
10.5
2012/13 budget
4.5
3.3
18.9
2011/12 budget
Total
10.9
2010/11 budget
4.5
3.3
2008/09 2009/10 budget budget
New Zealand Screen Production Grant - New Zealand
New Zealand Screen Production Incentive Fund
Vote Arts, Culture & Heritage
Budget (all figures in millions)
APPENDIX 1: CORPORATE WELFARE BY BUDGET AND PORTFOLIO VOTE
14 15.2 0.8 5.9
Film New Zealand
Growth Services Fund
9.3 1.5 2.8 44.9 1.6 2.0 13.8 33.7
Regional Partnerships and Facilitation
Sector Strategies and Facilitation
Enterprise Development Fund
Market Development Assistance Fund
Enterprise, culture and skills fund
New Zealand Trade and Enterprise
Seed Co-investment Fund
Venture Investment Fund
Regional Growth Initiatives
1.0
3.0
0.6
40.8
0.6
1.5
11.8
1.0
10.4
8.0
0.1
1.2
4.6
0.6
13.7
7.6
0.2
1.2
4.6
3.9
0.2
29.3
16.2
0.2
1.2
4.5
1.2
0.8
15.0
7.3
0.2
1.2
4.6
0.8
0.8
10.0
10.7
8.7
1.0
0.4
0.8
8.6
9.9
8.4
0.4
0.8
7.9
2.3
3.0
0.4
11.0
0.8
13.0
1.8
0.5
15.1
112.0
Regional and Industry Development Fund
0.3
13.5
66.8
0.3
8.4
40.6
30.8
Management Development Fund
7.9
50.6
25.1
1.3
4.5
91.7
27.2
1.3
Major Events Development Fund
127.0
15.7
1.3
15.2
2.8
2016/17 budget
33.5
52.5
30.0
1.3
13.2
2.8
2015/16 budget
47.8
25.8
1.1
4.6
13.2
2.3
2014/15 budget
New Zealand Screen Production Grant - International
20.3
1.1
4.0
31.9
13.4
2.3
2013/14 budget
1.3
9.8
International Growth Fund
0.8
11.4
31.4
13.0
13.6
80.4
32.8
13.8
2.3
2012/13 budget
Attracting International Screen Productions
0.7
International Biotechnology Partnerships
0.8
15.2
47.5
47.2
2.3
Standardised Training and Advisory Services
2.6
Investment Fund Management
15.2
Regional and Sector Development Services
16.0
International Investment Facilitation Services
73.6
0.4
68.9
Identification and Coordination of International Market Opportunities
Establishment and operation of the Food Innovation Network New Zealand
19.9
Analysis and Development Services for Firms
31.1
2.3
2011/12 budget
Services to Support the Growth and Development of New Zealand Businesses 20.4
2.3
2010/11 budget 11.7
18.2
2008/09 2009/10 budget budget
Services to Develop Business Capability
Investment Fund Management
Budget (all figures in millions)
15
15.0
332.0
130.0
284.3
Rugby World Cup 2011 - Crown share
Rugby New Zealand 2011 Limited
Payment in respect of Export Credit Office Guarantees and Indemnities
New Zealand Export Credit Office
Write-Off of Historical Investment in Solid Energy
4.0
0.2
25.0
108.1
379.5
5.0
2013/14 budget
Solid Energy New Zealand Limited - Redeemable Preference Shares Impairment 2.9
446.3
3.0
4.9
1.7
2012/13 budget
25.0
2.9
419.5
4.0
27.9
1.0
7.7
1.8
4.9
19.8
2011/12 budget
Solid Energy New Zealand Limited - Redeemable Preference Shares
Solid Energy New Zealand Limited - Loan Facilities
2.2
372.5
Total
Vote Finance (exc. rail)
2.5
40.8
Negotiation and Completion of Stadium Projects
Transformational Initiatives Fund
20.0
3.5
Purchase of Queen’s Wharf, Auckland
Stadium Development
Louis Vuitton Trophy Series
Louis Vuitton Pacific Series
0.8
1.6
Rugby World Cup Free-to-Air Broadcasting Right 1.8
5.8
Rugby World Cup Leverage and Legacy Programmes
Rugby World Cup
8.0
Temporary Rugby World Cup showcase and festival building on Auckland’s Queens Wharf 0.6
2.0
Depreciation on the temporary Rugby World Cup showcase and festival building on Queens Wharf
2.0
10.6 2.0
2.0
3D Digital Graphics Cluster
26.4
2010/11 budget
Promotion of New Zealand Associated with the America’s Cup
9.4
2008/09 2009/10 budget budget
New Zealand’s Participation at Expo 2010 Shanghai, China
Services to Support the Growth and Development of New Zealand Businesses
Budget (all figures in millions)
279.5
13.2
2014/15 budget
356.4
13.2
2015/16 budget
60.0
295.9
15.2
2016/17 budget
16 4.5 1.5 16.2
Industrial Research Limited Equity Injection
Invercargill Airport Suspensory Loan
Total
Tourism Growth Partnership
Marketing of New Zealand as a Visitor Destination
Vote Tourism 75.5
84.0
93.9
83.9
1.6
83.9
6.3
113.4
112.1
Total
0.0
35.6
10.5
64.8
Targeted Business Research and Development Funding 0.0
42.7
9.0
55.8
210.0
2013/14 budget
65.1 0.0
0.0
6.0
36.7
15.0
30.0
2012/13 budget
Research and Development Growth Grants 4.2
13.5
13.5
108.1
2011/12 budget
0.9
4.2
0.3
0.3
3.1
2010/11 budget
Repayable Grants for Start-Ups
Research and Development Facilitation and Promotion Service
Building Business Innovation
Research and Development Services and Facilities for Business and Industry
Realising the Benefits of Innovation
0.0
700.0
Total
Vote Science and Innovation
700.0
New Zealand Fast Forward Fund
Crown Irrigation Investments Limited
Water Storage and Irrigation Investment Proposals
Primary Growth Partnership
Vote Primary Industries
7.4
8.0
Hawke’s Bay Airport Equity Injection
44.3
30.0
2008/09 2009/10 budget budget
Public Trust Capital Injection
New Zealand Aluminium Smelters - Electricity Agreement Incentive Payment
Budget (all figures in millions)
8.0
113.4
218.8
43.6
119.2
14.1
25.8
16.0
76.9
12.0
8.1
56.9
0.0
2014/15 budget
7.6
115.9
212.5
30.0
115.8
11.0
32.4
23.4
72.0
3.0
14.3
54.6
0.0
2015/16 budget
14.5
117.4
250.5
40.0
144.2
14.0
32.8
19.5
183.5
101.6
5.0
76.9
60.0
2016/17 budget
17
0.6 2.2
The National Cycleway Fund
Management Support of the National Cycleway
90.0 7.0
New Zealand Railways Corporation Operating Support
ONTRACK Operating and Maintenance Costs
140.0 6.8 674.8 1,848.4
Crown Rail Operator Loans
Crown Rail Operator Equity Injection
Total
Grand total
Source: New Zealand Government Budget Papers, various years.
376.0
New Zealand Railways Corporation Increase in Capital for the Purchase of the Crown Rail
Rail Network and Rolling Stock Upgrade
KiwiRail Equity Injection
KiwiRail Turnaround Plan
55.0
Rail - New Zealand Railways Corporation Loans
Vote Transport (inc. Vote Finance on rail)
1,074.1
470.0
45.0
20.0
405.0
1,021.8
375.8
71.0
250.0
55.0
1,277.6
511.1
11.0
250.0
250.0
1,381.6
680.0
322.5
250.0
107.5
1,130.0
118.8
25.0
93.8
124.4
4.8
2013/14 budget
0.3
2014/15 budget
1,178.5
254.8
46.0
198.0
10.8
123.7
97.6
12.1
2012/13 budget
Total
113.0
1.1
27.2
0.8
2011/12 budget
2.0 119.5
1.3
4.6
0.1
1.2
18.4
2010/11 budget
Maintaining the Quality of the Great Rides
National Cycleway Fund - Extension 93.7
0.3
Tourism Facilities Development Grants
75.5
1.7
Implementation of the Tourism Strategy
New Zealand Cycle Trail Incorporated Seed Funding
5.0
2008/09 2009/10 budget budget
Marketing New Zealand as a Visitor Destination through Joint Venture Partnerships
Budget (all figures in millions)
1,212.9
232.8
23.0
209.8
123.4
2015/16 budget
1,359.9
213.8
23.6
190.2
131.9
2016/17 budget
18 2 2 5
Track Co Establishment Costs
Track Co - Relocation and Maintenance Costs, Wellington Railway Station
Track Co - Working Capital
131
59
56
7 1,415
Crown Rail Operator Equity 7 Injection
Total
224
140
Crown Rail Operator Loans
7
376
257
13
110
43
New Zealand Railways Corporation Increase in Capital for the Purchase of the Crown Rail
Rail Network and Rolling Stock Upgrade
KiwiRail Equity Injection
472
10
ONTRACK Operating and Maintenance Costs
KiwiRail Turnaround Plan
102
56
ONTRACK Loans 13
11
5
New Zealand Railways Corporation Transaction Costs of Purchasing Toll NZ Limited
ONTRACK Equity Injection
690
123
Purchase of Toll NZ Ltd’s Rail Business and Associated Costs
Upgrade of Rail Network
33
6
Rail Transport Upgrade and Growth Projects
99 6 44
1
3
8
90
55
NZ Railways Corporation Wiri Inland Port Rail Link
12
47
Track Co - Purchase of Rail Network Assets
National Rail Network Improvements
-44
Loan Repayment by Tranz Rail Ltd
New Zealand Railways Corporation - Transfer of Assets 99
10
New Zealand Railways Corporation Equity Injection
New Zealand Railways Corporation Operating Support
75
New Zealand Railways Corporation Loans
475
45
20
5
405
03/04 04/05 05/06 06/07 07/08 08/09 09/10
376
71
250
55
10/11
511
11
250
250
11/12
680
323
250
108
12/13
119
25
94
13/14
255
46
198
11
14/15
233
23
210
15/16
214
24
190
16/17
5,299
7
140
367
127
440
1,462
43
268
53
10
690
358
33
6
105
5
4
5
55
-44
99
90
10
958
Total
APPENDIX 2: TAXPAYER OUTLAYS ON KIWIRAIL (INCLUDING ONTRACK) SINCE BUDGET 2003
19
APPENDIX 3: DISTRIBUTION OF BUDGET 2016 CORPORATE WELAFARE ACROSS VOTES
www.taxpayers.org.nz 20