Potential Policy Decisions Affecting Expenses but Expected to be Funded from Budget Allowances
Environment - Review of the Emissions Trading Scheme (Changed, Quantified)
A statutory review of the Emissions Trading Scheme (ETS) was completed in 2011 and the Government released its public consultation document on proposed changes to the ETS in April 2012. The Government is considering changes to the ETS in response to the recommendations of the review. Depending on final decisions, the impacts of these changes could range from a net fiscal cost of $145 million to fiscal savings of up to $175 million over the forecast period. These estimates are subject to change, based on carbon price fluctuations and the final decisions to be taken following public consultation.
Government Response to Wai 262 (Unchanged, Unquantified)
The Waitangi Tribunal released its report on the Wai 262 claim on 2 July 2011. The report focuses on the protection of Māori culture and identity, with a particular focus on mātauranga Māori and associated taonga. The Tribunal’s recommendations are directed towards a number of government agencies individually, as groups and across sectors. The Government is currently considering the Tribunal’s report and recommendations to fully understand their implications (including any fiscal implications).
Housing - Reform of Social Housing (Unchanged, Unquantified)
The Government has decided to change the policy settings for social housing. This includes growing third party providers of social housing, increasing the effectiveness of financial assistance and Housing New Zealand Corporation focusing on providing social housing to those with the greatest housing need. Plans for implementation remain under development, but may require reprioritisation or additional funding. However, there may be offsetting financial benefits to the Crown if significant gains in efficiency are achieved.
Revenue - KiwiSaver Auto-Enrolment (Changed, Quantified)
The Government has announced its intention to consult on the design of a one-off KiwiSaver auto-enrolment exercise to increase the number of KiwiSaver members. An auto-enrolment exercise is likely to entail a one-off cost for kick-start payments to new members and ongoing additional costs for the Member Tax Credit. Depending on the timing, design features and take-up rate, these costs could be in the order of $350 to $550 million over the first four years after the auto-enrolment took place and are expected to be funded out of the operating allowances. The Government will proceed with a one-off KiwiSaver enrolment exercise only when it is confident that such a step poses no significant risks to returning to and maintaining an operating surplus.
Revenue - Transformation and Technology Renewal (Unchanged, Unquantified)
Inland Revenue is exploring options that will fundamentally change the way in which it manages its processes and data, in order to deliver smarter, modern services for less. Technology renewal is an integral part of Inland Revenue's future business model. Any changes could impact tax revenue collections and/or have material administrative costs to implement.
Reviews of Public Services (Unchanged, Unquantified)
A series of reviews have been initiated to improve the effectiveness and efficiency of public services. Reviews may recommend, or result in, changes to service delivery and/or free up resources for reprioritisation within Votes or be used to meet pressures in other areas.
Social Development - Welfare Reform (New, Unquantified)
The Government is currently working on two phases of welfare reform. Best estimates of the likely costs and benefit savings for the first phase, being legislated for in the Social Security (Youth Support and Work Focus) Amendment Bill, are included in the fiscal forecasts. This risk covers any variance in the actual costs and savings of the first phase plus the total cost and benefit savings for the second phase, for which final decisions have not yet been made.
State Sector Employment Agreements (Unchanged, Unquantified)
A number of large collective agreements are due to be renegotiated in the short-to-medium term. As well as direct fiscal implications from any changes to remuneration, the renegotiation of these agreements can have flow-on effects to remuneration in other sectors. The Government has signalled an expectation of restraint given the current economic environment.
