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Half Year Economic & Fiscal Update 2009

Charges Against the Fiscal Forecasts

The PFA requires that if the fiscal implications of government decisions and other circumstances can be quantified for particular years with reasonable certainty, these fiscal implications must be included in the forecast financial statements. This applies irrespective of whether or not a decision has been taken by the Government to provide additional funding for the matter.

ACC Non-Earner's Account

Based on the criteria outlined on pages 52 and 53 it is probable that additional funding for the ACC Non-Earners Account will be approved by the Government during the forecast period. Consequently, this matter has been incorporated into the fiscal forecasts as a potential charge against the operating allowances for future Budgets.

ACC updated its scheme valuation as at 30 June 2009 and has advised of potential changes to the Non-Earner's Account baselines in 2009/10 and outyears.

Budget to be Charged
Budget to be charged
($million)
2009/10 2010/11 2011/12 2012/13 2013/14
Budget 2010 139.829 81.324 56.324 80.984 123.886

ACC Levy Increases

The Government is yet to consider ACC's final advice on levy rates for 2010/11 and the levies ultimately approved may differ from those in ACC's consultation documents.

Based on the criteria outlined on pages 52 and 53 it is probable that increases to ACC levies will be approved by the Government during the forecast period. Consequently, the effects of these increases have been recognised in the fiscal forecasts as a potential increase in the operating balance.

It is important to note that the Government has not yet taken any decision on ACC levy rates for 2010/11. The amounts below that have been recognised in the fiscal forecasts are Treasury's best estimate (at this time) of the likely effect of proposed levy increases, inclusive of the legislative changes now before Parliament.

Amount to be Recognised
Amount to be recognised
($million)
2009/10 2010/11 2011/12 2012/13 2013/14
  687 1,180 1,159 1,264 1,431

An unquantified Specific Fiscal Risk has been included in this chapter (see page 61) to recognise the fact that the final 2010/11 levy rates may be different to those from which the amounts recognised in the forecasts were derived.

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