Factors That Influenced Our Operating Environment

Change in the organisation

In 2008/09, LINZ completed the final milestone in the transformation of New Zealand's survey and titles transaction system, with the introduction of 100% electronic lodgement through Landonline. This has been a major focus for LINZ over a 12-year period. At the same time, we had been finalising a major overhaul of the regulatory frameworks used to define and transact land. It was timely to look back on the skills and knowledge gained and how we can now build on this to ensure LINZ continues to contribute fully to New Zealand's economic future. Accordingly, we did a review during the year to determine how well we are positioned to respond to and realise our future role.

We identified that we need to place more emphasis on: our strategic capability, our position within the wider land information sector, strategic policy and government processes, relationship management, organisational development and working in a more integrated way.

The first step was to align our functions internally to ensure we had the right level of focus on some core areas of our work, address priorities identified by our Minister, and enable us to develop and evolve strategically over time.

This led to a realignment of the functions of LINZ's five General Manager roles, which coincided with changes in the senior leadership team as a result of retirement and resignation.

Changes in the economic environment

LINZ operated in a rapidly changing fiscal environment during 2008/09. A global recession, a focus on fiscal restraint from the Government, and reduced survey and title volumes all contributed to the challenges.

In response to the Government's request for savings, LINZ offered back $18 million of Crown (taxpayer) funded savings over 2008/09 and the following three years. Ongoing savings were offered from a reduction to the hydrographic survey programme, efficiency savings in the pastoral land management programme and a reduction in strategic projects funding.

Due to the economic downturn, survey and titles transaction volumes dropped significantly, reducing the revenue received from customers' fees. The survey and titles system is fully funded from customers' fees and receives no Crown funding.

Demand for our survey and titles services has been 25% lower in 2008/09 than projected. This reduction meant LINZ was unable to cover the full costs of the survey and titles system from customers' fees. As a result, LINZ sought a contribution from the Government for $30 million over two years to underwrite the costs of survey and titles services. This is a separate funding source from the $18 million Crown-funded savings returned in response to the Government's request for savings, and will be returned to the Government once survey and title volumes return to average levels.

As the property market improves and transaction volumes increase, the revenue generated from survey and title fees will also increase.

Survey and title fees are scheduled for review in the 2009/10 financial year, to take effect on 1 July 2010.

The graphs below illustrate the drop in transaction volumes for surveys and titles. Each graph shows the median monthly transaction volumes and yearly average prior to 2005/06. The land title graph shows transaction volumes were above median for 2005/06 and 2006/07, but below for 2007/08 and 2008/09. The cadastral survey graph shows transaction volumes were consistent with the median for 2005/06 and 2007/08, but below the median for 2008/09.

Graph 1: Land title transaction volumes, 1990/91 to 2008/09

Graph 2: Cadastral survey transaction volumes, 1998/99 to 2008/09

Change in Government & priorities

Following the change in Government and a review of Government priorities, it was agreed in February 2009 that LINZ would contribute to new priorities: developing and implementing the Government's high country policy, implementing the New Zealand Geospatial Strategy, and encouraging overseas investment in New Zealand.

Developing & implementing the Government's high country policy

This priority focuses on policy development and legislative changes for the Crown's South Island high country. This is an environmentally sensitive and economically important part of New Zealand, and the focus of the Government's high country policy is to ensure Crown pastoral land is put to the best use – economically, environmentally and culturally – for New Zealand (see outcome 3 achievements).

Implementing the New Zealand Geospatial Strategy

This priority focuses on the development and implementation of accessible, available, shareable and useable geospatial information and infrastructure for New Zealanders. Enabling better use of geospatial information will provide real and significant economic benefit for New Zealand. Geospatial information is increasingly important to commercial products and services, as well as core government functions (see outcome 4 achievements).

Encouraging overseas investment in New Zealand

LINZ's focus in this priority is to encourage investment by processing overseas investment applications efficiently and accurately. LINZ is providing advice and support to the review of the overseas investment regime, being undertaken by the Minister of Finance and the Treasury (see outcome 1 achievements).