Types of Appropriation
The PFA provides for six types of appropriation. Four appropriation types authorise the incurring of expenses; one type authorises the incurring of capital expenditure; the remaining type authorises both.
These appropriation types can be further differentiated by whether the expenses or capital expenditure are departmental or non-departmental transactions.
| Appropriation Type | Transaction Status | Description |
|---|---|---|
| Output Expenses | Departmental | Authorises expenses to be incurred by a department or an Office of Parliament in supplying a specified category of outputs (goods and services). |
| Non-Departmental | Authorises expenses to be incurred by the Crown (excluding departments) in purchasing a specified category of outputs (goods and services) from Crown entities or other third parties. | |
| Benefits and Other Unrequited Expenses | Non-Departmental |
Authorises expenses to be incurred by the Crown (excluding departments) in transferring resources (generally to individuals for their personal benefit) for which the Crown receives nothing directly in return. Examples include the Unemployment Benefit, student allowances and various scholarships and awards. |
| Borrowing Expenses | Departmental |
Authorises the incurring of interest or other financing expenses for loans made to a department or an Office of Parliament, or public securities (undertakings that represent part of the public debt) issued by a department or an Office of Parliament. In practice, limitations on the rights of departments to borrow or issue securities mean that these are likely to be incurred only by Offices of Parliament. |
| Non-Departmental |
Authorises the incurring of interest or other financing expenses for loans made to the Crown (excluding departments), or public securities (undertakings that represent part of the public debt) issued by the Crown. Crown debt management is centralised, which means that most debt-servicing expenses appear in Vote Finance. |
|
| Other Expenses | Departmental |
Authorises expenses to be incurred by a department or an Office of Parliament that are not either output expenses or borrowing expenses. Other expenses should be used only for events that cannot be related back to output production, such as redundancy costs arising from a government decision to cease purchasing certain types of outputs, or a loss on sale of assets made surplus by departmental restructuring. |
| Non-Departmental |
Authorises expenses to be incurred by the Crown (excluding departments) that are not structured or managed as output expenses, benefits or other unrequited expenses, or borrowing expenses. Other expenses is the residual expense appropriation type, which should not be used where an appropriation could be better classified or managed as one of the other appropriation types (eg, as output expenses). Examples include disposal of an asset for less than market value, grants to community organisations, subscriptions for membership of international bodies and remuneration of independent statutory officers. |
|
| Capital Expenditure | Departmental | Authorises capital expenditure to be incurred by a department or an Office of Parliament to acquire or develop assets for the use of the department. |
| Non-Departmental | Authorises capital expenditure to be incurred by the Crown (excluding departments) to acquire or develop Crown assets, including the purchase of equity, or making a loan to a person or organisation that is not a department. | |
| Expenses or Capital Expenditure Incurred by an Intelligence and Security Department | Departmental | Authorises both expenses and capital expenditure to be incurred by the New Zealand Security Intelligence Service or the Government Communications Security Bureau. |
