The Shape of the Crown's Balance Sheet Matters for Managing Future Demands (continued)
Finding new and innovative ways to deliver services
Funding has been set aside for the Corrections service to increase prison capacity. This may be delivered via a Public Private Partnership, though that will happen only if the whole-of-life cost is materially lower and the service demonstrably better than the conventional procurement alternative.
These types of procurement arrangements are well established, with a long track record of success in many Western nations, including every state in Australia. Better service delivery presents the Government with options about where the capital saved can be better deployed in public use.
Reduction in future capital allowances to fund Weathertight Homes solution
The Government is considering a new approach to resolving weathertight homes issues in discussion with territorial local authorities. The Government considers it prudent to set aside a contribution as it expects the solution to involve a Crown contribution. This contribution would need to be managed within the prudent fiscal strategy. As such, we have indicatively reduced the next four years' capital allowances in order to reflect a partial source of funding for any contribution.
- Figure 8 - Future capital allowances
- Source: The Treasury
The effect of this decision is to reduce the Budget 2011 and Budget 2012 allowances from $1.45 billion to $1.39 billion; and the Budget 2013 and Budget 2014 allowances from $1.65 billion to $1.39 billion (Figure 8).
