2006 / 2007 Draft Budget: Narrative of Changes

This paper outlines the changes to the budget proposed by the staff, based on the feedback from members at the Consultation Meetings held in Wellington, Christchurch and Auckland; discussions with the Executive Committee members; and revised costing for some items from the staff.

Please refer to the line item budget which follows for the numbers to which this narrative refers. Items which have changed or to which attention is drawn below are shaded light grey in the budget. The number in advance of the line name refers to the line number on the budget document.

Income Accounts

2 - Dividend Income

The numbers in the out-years are provided by NZRS, and reflect the natural growth in the dividend caused by forecast growth in domain name registrations consistent with the 2006/2007 dividend as resolved by Council at its meeting on 4 March 2006.

6 - APTLD Secretariat Fee

This is a new line item, added to bring the fee for APTLD secretariat services “on budget”. Previously this revenue has been offset against the APTLD secretariat expenditure line.

Expenditure Accounts

13 - Public Policy Committee

As a large committee which is managing a large workstream, and given this year’s actual budget outcome, $5,000 is inadequate to provide for Public Policy’s expenditure in the 2006/07 year. Accordingly this budget is proposed to increase to $10,000.

22 - Broadband Campaign

This is a new budget line introduced on the basis that known expenses should be accounted for in as transparent a manner as possible.  The line provides for known anticipated expenses related to public campaigning for better telecommunications regulation. It is struck at $90,000 as this is the known expense up to the government’s announcement of a decision on regulatory reform. In the out years, assuming this campaign is complete by 31 March 2007, this is a zero budget line. (This item was initially agreed at $80,000, but previously committed expenditure of $10,000 [joint pamphlet with TUANZ, agreed by Council on 4 March] was not done and no invoice received by 31 March. This year’s budget is therefore increased to fund that work.)

25 - Internet Regulatory Issues

This was initially struck at $70k to cover the broadband campaign. As expenses for that have been separated out and increased in line with planned spending, the line was initially cut to $20,000. Based on feedback at members’ meetings about allowing for potential expenditure, and noting a) that other unforeseen eventualities in regulatory issues may occur, and b) that there will be some costs in mounting further campaigns post- the government’s decisions, it is proposed to increase this to $50,000. In out years it returns to the planned $70k budget.

27 - ISG – Online Safety Conference

Council and Public Policy Committee have discussed funding this conference, but no commitment was entered into during the 2005/06 financial year. Accordingly the Public Policy Committee has recommended funding the conference at a “Gold” sponsorship level, and the draft Budget has been amended to provide for this. It is not a recurring annual event, so no provision is made in the out years.

38 - Communications

Based on the feedback from members meetings about the importance of better communications with members, this budget line has been increased by $10,000 for the coming year, to establish better recruitment materials and communications resources.

53 - Pacific Support

The commitments which InternetNZ has entered into through the Pacific Internet Partnership amount to $25,000 in the coming financial year, but the draft budget under-estimated these commitments and only allowed $15,000 in this area. Based on the feedback from the members meetings and the need to honour commitments made, this line is proposed to increase to $25,000 for this year and for the out years.

67 - Executive Committee

Given this year’s actual budget outcome, and the need to allow some funds for an Executive Committee planning session after the AGM, $10,000 is inadequate to provide for the Committee’s likely expenditure in the 2006/07 year. Accordingly this budget is proposed to increase to $15,000 for this year and for the out years.

80 - Staff Costs

The Executive Director has reviewed staff costs and the likely cost of employing more communications resource in the Secretariat office, and proposes to increase the budget for staffing by $30,000 for 2006/07, and consequentially in the out years.

106 - Membership

Based on the clear feedback of the members at the consultation meetings that InternetNZ is not spending enough on recruiting or retaining members, this budget line is proposed to increase to $30,000 for the current year and for out years.

The following papers show:

a)       the line by line budget,

b)      the movements in cash balances over the next three years that would be generated by the planned budgets for 2006/2007 and the out years,

c)      the revised Business Plan based on the budget set out here.

Recommendation

The following recommendation is proposed for Council’s adoption:

THAT the revised Business Plan and Budget be adopted for submission to the members at the AGM.

Keith Davidson
Executive Director