Potential Policy Decisions Affecting Expenses (Expected to be Funded from Reprioritisation or Budget Allowances)
ACC - Work-related Gradual Process Disease and Infection (Unchanged)
Under current legislation, the Government incurs an obligation for Work-related Gradual Process Disease and Infection claims when the claim is made, and an expense is recognised at that point. The liability for commercial accident and sickness insurance contracts would usually be recognised when exposure to conditions that will give rise to a claim occurs. An amendment to legislation would be required to recognise claims at the same time as for commercial contracts. There are currently no plans to make such a change. An initial adjustment to the liability, and an expense of about $1 billion would need to be reported if such an amendment was made.
Canterbury Earthquake Recovery - Christchurch City Council/Crown Cost Sharing (Changed)
The Crown is partially funding the recovery of local infrastructure in Canterbury. The extent of funding is dependent on the outcome of cost-sharing negotiations with the Christchurch City Council. The Crown’s contribution could differ from that included in the fiscal forecasts.
Canterbury Earthquake Recovery - Christchurch Central Recovery Plan (New)
The Crown is partially funding the construction of Anchor Projects as part of the Christchurch Central Recovery Plan. The extent of funding will vary from project to project, dependent on final project costs and the outcome of cost-sharing negotiations with the Christchurch City Council. Business cases for the development of Anchor Projects are in their early stages. Project costing for construction of the Anchor Projects will become increasingly clear during the business case process and the subsequent procurement phase. The Crown's contribution may differ from that included in the fiscal forecasts.
Defence Force - Funding Track Evaluation (New)
The Government is evaluating different funding tracks for the New Zealand Defence Force (NZDF) to assess the level of military capability and equipment that can be achieved with each track. The results of this work will be considered as an input into the next Defence White Paper. There is a risk that the funding provided to NZDF in the future could differ from that included in the fiscal forecasts.
Government Response to Wai 262 (Unchanged)
The Waitangi Tribunal's report on the Wai 262 claim 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 has yet to respond to the Tribunal’s report and recommendations.
Health - Payment of Family Caregivers (Changed)
The Government has agreed to change its policy of not allowing payment to certain family carers (mainly parents and spouses of disabled adults) who deliver disability support services, following court rulings that have found this policy to be in breach of section 19 of the New Zealand Bill of Rights Act 1990. The Government has consulted the disability community and wider public on options for a new policy approach to be implemented in late 2013. The potential costs of the new policy are uncertain depending on how tightly payments are targeted and may differ from the level included in the fiscal forecasts.
Housing - Reform of Social Housing (Unchanged)
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. Some decisions have been announced and included in the fiscal forecasts but other plans for implementation remain under development, but may require reprioritisation or additional funding.
Revenue - KiwiSaver Auto-enrolment (Unchanged)
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. 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. 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 auto-enrolment takes place and are expected to be funded out of the operating allowances.
Revenue - Transformation and Technology Renewal (Changed)
The Government is exploring options that will fundamentally change the way IRD manages its processes and data. Any changes could have material costs to implement (with capital and operating implications) and/or impact tax revenue collections. The Government is currently considering a programme business case and is yet to finalise the scope of the programme.
Social Development - Vulnerable Children White Paper (Unchanged)
The Government is looking to implement proposals to better identify, and provide assistance to, vulnerable children. Costs of the proposals are likely to have impacts on the social development, education, health and justice areas, and are expected to be met through reprioritisation of current expenditure. However, uncertainty around the service costs and volumes as well as the implementation of new initiatives associated with the better identification and support of vulnerable children could mean additional funding is required.
Social Development - Welfare Reform Costs (Changed)
The Government has agreed to a package of changes to the benefit system. The extent of any additional costs of implementing welfare reform, such as providing more employment assistance related interventions to a broader range of clients, remain uncertain.
Social Development - Welfare Reform Forecast Benefit Savings (Unchanged)
A conservative estimate of the likely benefits from Welfare Reform has been included in the fiscal forecasts. The actual impact may differ owing to behavioural factors and the complexity of implementing the reforms, with a corresponding impact on benefit expenditure.
State Sector Employment Agreements (Unchanged)
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 and an expectation that agreements will be managed within the current fiscal forecasts.
