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Budget 2007 Home Page Half Year Economic & Fiscal Update 2007

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 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.


Vote
Description of Initiative Operating Impact ($million)
Child, Youth, and Family Services Pathway to Partnership: Strengthening Community Based Child and Family Services 3.736 in 2007/08 and 6.759 in 2008/09
Communications Digital Strategy – High-speed Connectivity for Growth 20 from 2005/06 to 2008/09 (MYA)
Education Pathway to Partnership: Strengthening Community Based Child and Family Services 0.149 in 2007/08 and 0.282 in 2008/09
Finance Equity Injection to ONTRACK 49.15 in 2007/08
Finance Loans to ONTRACK 108.005 in 2007/08
Finance ONTRACK operating and maintenance costs 12.8 in 2007/08
Health Meningococcal Vaccine Delivery 7.098 in 2007/08 and 6.081 in 2008/09
Social Development Pathway to Partnership: Strengthening Community Based Child and Family Services 2.922 in 2007/08 and 6.029 in 2008/09
Youth Development Pathway to Partnership: Strengthening Community Based Child and Family Services 0.180 in 2007/08 and 0.343 in 2008/09

The following table shows the impact on the operating balance 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 operating spending.

Operating Impact
($ million)
2007/08 2008/09 2009/10 2010/11 2011/12 and Outyears
Funding to Extend Initiatives 0 169.955 196.449 196.449 196.449

Quantified Risks

The risks outlined in these tables would, if they eventuated, impact on the Government’s forecast new operating and/or capital spending amounts.

The Minister of Finance has yet to fully consider the quantum of these risks.

Quantified Risks as at
5 December 2007
Operating Balance Gross Debt Value of Risk
($ million)
Funding in Budget 2007
($ million)
New Risks        
Customs – CusMod Replacement Decrease Increase 22 per annum operating and 100 capital 1 in 2007/08
Education (Tertiary) – Performance-Based Research Fund Decrease - 6.5 operating in 2009/10 and 13 per annum operating from 2010/11 -
Education (Tertiary) – Upskilling the Workforce Strategy Decrease - 44 operating in 2008/09, 79 operating in 2009/10, and 81 per annum operating from 2010/11 -
Housing – Rural Housing Decrease - 15-20 per annum operating for five years including 2008/09-2011/12 2.7 in 2007/08
New Zealand Agency for International Development Decrease - 10 in 2008/09, 5 in 2009/10, and savings of 5 in 2010/11 70 in 2007/08, 102 in 2008/09, 174 in 2009/10, and 246 ongoing from 2010/11
Social Development – Youth Court Sentencing Orders Decrease Increase 12 per annum operating and 4 capital -
Changed Risks        
Education – Early Childhood Education Ratio Changes Decrease - 51 per annum from 2011/12 -
Education – School Property Decrease Increase 100 capital in 2008/09 and up to 260 capital in each of the three years 2009/10-2011/12 and operating of 12 per annum 203 capital and 11 operating ongoing
Finance – National Rail Network – Obligations of Rail Agreement - Increase 92 to 102 per annum capital from 2008/09 104 capital in 2007/08 to 2010/11
Foreign Affairs and Trade – Additional Baseline Funding Decrease Increase 523 operating and 98 capital total over the period 2008/09 to 2012/13  
Health – National Systems Development Programme Tranche 2 Decrease Increase 100 operating (33 ongoing) from 2008/09 to 2011/12 and 64 capital  
Police – Increases to Police Staff Decrease Increase Operating of 42 in 2008/09, 45 in 2009/10 and outyears and capital of 54 capital over the forecast period 49 per annum operating ongoing and 10 capital
Social Development – New Zealand Superannuation and Veteran’s Pension Decrease - 7 operating in 2007/08, 28 operating in 08/09, 22 operating in 09/10 250 operating from 2007/08 to 2010/11
Unchanged Risks        
Corrections – Capital Projects Decrease Increase 1,200 capital through to 2014 and operating implications of 123 through 2010/11, 89 operating ongoing  
Culture and Heritage – Broadcasting Initiatives Decrease - 24 per annum 3 per annum
Economic Development – Venture Investment Fund - Increase 40 capital in 2009/10 and 2010/11 -
Education (Tertiary) – Vocational Training Decrease - 2.5 in 2008/09, 7.5 in 2009/10, 15 in 2010/11, and 20 in 2011/12 and outyears 71 from 2007/08 to 2010/11
Health – Indicative Funding for Budgets 2008, 2009, and 2010 Decrease - 716 in 2008/09, 1,502 from 2009/10, and 2,347 per annum from 2008/09 -
Housing – Shared Equity Home Ownership Decrease Increase 30 per annum capital over the forecast period and 1 per annum operating over the forecast period 1.4 in 2007/08
Housing – Wellington City Council Social Housing Assistance Decrease - 220 operating spread over a 10-15 year period 1.2 in 2007/08
Justice Sector and Other Agencies – Effective Interventions Decrease - 150 per annum  
Justice Sector Agencies – Potential Flow-on Impact of Extra Police Decrease Increase 119 operating from 2008/09 to 2011/12 and 19 capital  
New Zealand Defence Force – Defence – Capital Injections - Increase 210 capital from 2008/09 to 2010/11 44 capital
New Zealand Defence Force – Sale of Skyhawks and Aermacchi Trainers - Decrease US$110 capital -
Police – International Deployment Capability Decrease - 30 per annum -
Research, Science and Technology – Multi-year Funding Profile Decrease - 30 in 2008/09 and 60 per annum from 2009/10 55.5 over three years from  2007/08
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