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Budget 2008 Home Page Budget Economic and Fiscal Update 2008

Charges Against Future Budgets

As part of its Budget strategy, the Government has put in place some longer-term funding paths for particular sectors. This aids long-term planning and demonstrates the Government's commitment to specific policies.

Charges against future Budgets do not meet the definition of a “risk” under the PFA, as these items are incorporated in the fiscal forecasts. This section is provided to increase transparency about the provisions for future Budgets.

Defence Funding Package

The Defence Funding Package (DFP) is designed to provide the New Zealand Defence Force (NZDF) with the funding required to address issues identified by the Defence Capability and Resourcing Review, including capability, and maintaining equipment and reserves. Budget 2008 included $69.1 million per annum as the fourth tranche of the 10-year plan. The following table shows the additional tranches to be charged against future Budgets.

Defence Funding Package of additional tranches to be charged against future Budgets
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13 2013/14 2014/15
Budget 2009 85.700 85.700 85.700 85.700 85.700 85.700
Budget 2010 - 108.100 108.100 108.100 108.100 108.100
Budget 2011 - - 66.900 66.900 66.900 66.900
Budget 2012 - - - 14.200 14.200 14.200
Budget 2013 - - - - 58.600 54.200
Budget 2014 - - - - - 0.00

Economic Transformation: Innovation - Pre-commitment

Budget 2008 included significant funding for Economic Transformation: Innovation. In addition to this, the Government has agreed that the following funding for this purpose will be pre-committed against future budgets:

Economic Transformation: Innovation. Budget to be Charged (millions of dollars)
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13 and Outyears
Budget 2009 93.000 100.000 100.000 100.000
Budget 2010 - 75.000 75.000 75.000
Budget 2011 - - 25.000 25.000

Foreign Affairs and Trade - Funding Package Pre-commitment

The Foreign Affairs and Trade Package is designed to provide the Ministry of Foreign Affairs and Trade (MFAT) with certainty to progress growth plans while also providing the Government and MFAT the flexibility to respond to emerging issues that may arise as a result of an increasingly complex international environment. The pre-commitment is $133 million operating and $39 million in capital funding to be allocated in Budget 2009 to Budget 2012.

Operating:

Foreign Affairs and Trade - Funding Package Pre-commitment: Operating
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13
Budget 2009 8.298 8.035 8.035 8.035
Budget 2010 - 13.557 13.369 13.369
Budget 2011 - - 18.267 17.68
Budget 2012 - - - 24.493

Capital:

Foreign Affairs and Trade - Funding Package Pre-commitment: Capital
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13
Budget 2009 7.031 - - -
Budget 2010 - 5.007 -  
Budget 2011 - - 15.655 -
Budget 2012 - - - 11.307

Health - Pre-commitment

The Government has agreed that the indicative Health allocation of $800 million for Budget 2009 may be pre-committed by $2.233 million in 2010/11 rising to $13.736 million per annum in 2012/13 and outyears.

Health - Pre-commitment
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13 and Outyears
Budget 2009 - 2.233 16.000 13.736

Teachers’ and Principals’ Collective Agreements

The Government previously set aside funding for the Teachers’ and Principals’ Collective Agreements in Budgets 2007 and 2008. These Collective Agreements have now been settled, and the remaining costs are $169.128 million in 2009/10 rising to $192.414 million in 2010/11 and outyears. These costs will be charged against Budget 2009.

Teachers' and Principals' - Collective Agreements
Budget to be Charged
($ million)
2009/10 2010/11 2011/12 2012/13 and Outyears
Budget 2009 169.128 192.414 192.414 192.414

Time-limited Funding

Time-limited funding does not meet the definition of a “risk” under the PFA, but is further information that is prepared to increase transparency about initiatives with funding profiles that cease or decrease during the forecast period.

The following table outlines those areas where initiatives have time-limited funding that decreases or ceases at some point in the forecast period and may potentially be extended, using a $5 million materiality threshold. Time-limited funding often relates to pilot programmes, and in some cases Multi-Year Appropriations (MYAs) if they are likely to require further funding in the future.

Time-limited Funding

Vote
Description of Initiative Impact of Continuing Funding
($ million)
Biosecurity Southern Saltmarsh Mosquito Eradication Programme 7.000 in 2008/09, 9.000 in 2009/10 and 11.000 in 2010/11 and outyears
Child, Youth and Family Services Demand driven pressures on care and protection Services 6.800 in 2008/09 and outyears
Finance Funding for ONTRACK's revenue shortfall as a consequence of the
extension of Toll's interim track access charge pending the outcome
of the expert determination process
28.000 in 2009/10 and outyears
Finance Funding to ONTRACK to cover the cost of Wellington Railway Station,
land released by Toll NZ Ltd and specific expenditure
26.350 capital in 2008/09, 42.750 capital in 2009/10 and outyears
Finance Loan facility to ONTRACK to build a range of infrastructure projects 46.995 capital in 2008/09, 110.000 capital in 2009/10 and outyears
Finance National rail network improvements 25.000 capital in 2009/10 and outyears
Health Meningococcal Vaccine - Ongoing Delivery 7.000 ongoing from 2009/10
Health Healthy Housing Programme 15.000 ongoing from 2010/11
Housing Shared Equity Home Ownership Pilot 17.500 capital ongoing from 2010/11
Revenue Property Audit Strategy 23.567 in 2010/11 and outyears
Transport Canterbury Transport Project 9.000 in 2011/12, 14.000 in 2012/13 and outyears

The following table shows the debt and operating impact if funding were to be appropriated to maintain funding levels for these initiatives (ie, extend the initiatives beyond their current scheduled completion dates). These amounts would need to be managed within the forecast spending.

Debt and operating impact
Impact ($ million) 2007/08 2008/09 2009/10 2010/11 2011/12and
Outyears
Funding to Extend Operating Initiatives (Impact on Operating Balance) - 13.800 50.800 91.367 100.367
Funding to Extend Capital Initiatives (Impact on Debt) - 73.345 177.750 195.250 195.250
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