Specific Fiscal Risks
The matters listed below are disclosed as specific fiscal risks as they meet the rules for disclosure outlined on pages 52 and 53.
Quantified and unquantified risks are listed separately. Within each list the risks have been categorised as new or changed/unchanged since the last economic and fiscal update.
Risks are unquantified if the amount of the risk is unknown, or if the matter is partially disclosed as an unquantified risk (as full disclosure would be likely to prejudice New Zealand's substantial economic interests, security, defence or international relations; or compromise the Crown in a material way in negotiation, litigation or commercial activity; or result in a material loss of value to the Crown).
Fuller descriptions of the risks listed below are included on pages 61 to 73.
Quantified Risks
If they were to eventuate the risks outlined in these tables would, to the extent that they cannot be funded from future Budget allowances, by reprioritising existing expenditure, or through third party revenue, impact the Government's forecast financial position (as indicated in the table below).
A negative fiscal impact means an increase in net debt and possibly a decrease in the operating balance.
| Quantified risks as at 25 November 2009 | Impact on fiscal position |
Value of risk ($million) |
|---|---|---|
| New risks | ||
| Economic Development - Large Budget Screen Production Fund | Negative | $34m in 2009/10 |
| Justice - Family Court Professional Services | Negative | $8m operating in 2009/10 rising to $22m per annum by 2012/13 |
| Changed risks | ||
| Corrections - Community Probation and Psychological Services | Negative | $78m operating per annum by 2013/14 and $61m capital |
| Corrections - Prison Construction | Negative | $150m operating per annum by 2018/19 and $915m capital between 2009/10 and 2017/18 |
| Customs - Joint Border Management System Replacement | Negative | $15m operating in 2011/12 reducing to $9m per annum from 2012/13 and $66m capital |
| Education - Additional Funding for School Property | Negative | $168m capital |
| Education - Broadband Investment: Schools | Negative | $116m capital |
| Education - Trades Academies | Negative | $10m to $20m capital |
| Immigration - Immigration New Zealand Change Programme | Negative | $65m capital |
| Justice - Review of the Legal Aid System | Negative | $18m operating in 2009/10 rising to $178m by 2013/14 |
| New Zealand Defence Force - Future Operationally Deployed Forces Activity | Negative | $30m operating per annum from 2010/11 |
| New Zealand Defence Force - Sale of Skyhawks and Aermacchi Trainers | Positive | $130m capital |
| Police - Digital Radio Network Full Implementation | Negative | $7m operating in 2011/12 rising to $18m in 2013/14 and $66m capital |
| Transport - NZRC Operating Support and Loans | Negative | Up to $260m in operating and/or capital |
| Unchanged risks | ||
| Economic Development - Broadband Investment Initiative | Negative | $1,210m capital |
| Education - Early Childhood Education Ratio Changes | Negative | $55m operating per annum |
| Education - School Staffing Entitlements | Negative | $45m operating in 2011/12 and $50m in 2012/13 and outyears |
| Education - Youth Guarantee | Negative | Up to $51m operating per annum |
| Education, Social Development, Health and Revenue - Medical Training Places | Negative | $11m operating and $3m capital per annum by 2012/13, growing beyond the forecast period |
| Finance - Crown Overseas Properties | Negative | $150m capital between 2009/10 and 2013/14 |
| Health - Additional WellChild Visits | Negative | $15m operating per annum |
| Health - Building Dedicated Elective Theatres | Negative | $20m operating in 2010/11, $40m operating per annum from 2011/12 and $36m capital |
| Health - Funding Increase for Subsidised Medicines | Negative | $60m operating in 2010/11, and $80m operating per annum from 2011/12 |
| Immigration - Redevelopment of Mangere Refugee Centre | Negative | $5m operating, $25m capital one-off and $25m operating per annum |
| Justice - Greater Auckland Region Service Delivery Strategy | Negative | $265m operating or capital |
| Revenue - GST - Business to Business Transactions | Positive | $50m operating per annum |
| Revenue - Impairment of Crown Debt Administered by Inland Revenue | Positive or Negative | $200m capital decrease to $50m capital increase |
| Revenue - Reinstatement of Deferred Tax Cuts | Negative | $900m operating per annum |
| Social Development - Increasing the Abatement-free Income Threshold | Negative | $27m operating per annum |
