Potential policy decisions affecting expenses but expected to be funded from reprioritisation or Budget allowances
ACC - Work-related Gradual Process Disease and Infection (Changed, Unquantified)
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. As a result, the liability associated with Work-related Gradual Process Disease and Infection claims where exposure to the conditions that will give rise to a claim has occurred but where the claimant has not yet suffered incapacity or presented for treatment, are not recognised. An amendment to legislation would be required to recognise claims at the earlier point. 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 - Christchurch City Council/Crown Cost Sharing (New, Unquantified)
The Crown and Christchurch City Council are working on formalising a cost sharing arrangement for the implementation of the Christchurch Central Recovery Plan and to address local infrastructure costs. Assessment of infrastructure damage continues to progress, but is not yet complete. The Crown's current estimate has been included in forecasts, as has the amount it has already agreed to contribute to central city land acquisition and anchor projects. The lack of certainty on costs and cost sharing for local infrastructure, central city land acquisition and anchor projects could result in actual costs differing from those included in the forecasts.
Education - Early Childhood Education Funding (New, Unquantified)
The Government has committed to 98% of children starting school in 2016 having participated in quality early childhood education (ECE). Changes are also being made to welfare legislation to introduce an obligation for people on benefits caring for dependent children aged three years and over who are not yet in school to take all reasonable steps to ensure those children are enrolled in, and attending, an approved ECE programme. Any associated additional costs are expected to be funded through reprioritisation or existing Budget allowances.
Government Response to Wai 262 (Unchanged, Unquantified)
The Waitangi Tribunal has released its report on the Wai 262 claim. 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 considering the Tribunal’s report and recommendations to fully understand their implications (including any fiscal implications).
Health - Payment of Family Caregivers (Changed, Unquantified)
The Ministry of Health must change its policy of not allowing the payment to certain family carers (mainly parents and spouses of disabled adults) who deliver disability support services, as court rulings have found this policy to be in breach of section 19 of the New Zealand Bill of Rights Act 1990. The Government is currently consulting the disability community and wider public on options for a new policy approach to be implemented in 2013. The potential costs of a new policy are uncertain, but are likely to require a significant increase in disability support funding. There are also likely to be cost implications for services funded from Vote Social Development.
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.
Revenue - KiwiSaver Auto-enrolment (Unchanged, 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. 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 (Unchanged, Unquantified)
IRD 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 IRD's future business model which focuses on sustaining current systems (ie, minimising known risks within existing technology), as well as significant business process and technology changes. Any changes could impact tax revenue collections and/or have material administrative costs to implement. Decisions on the size and scope of this programme are expected to be made as part of the Budget 2013 process.
Social Development - Disability Allowance Savings (New,Unquantified)
Savings in the Disability Allowance appropriation were agreed to in Budgets 2011 and 2012, and baselines were reduced. Policy decisions to deliver the savings have not yet been made and there is uncertainty around realising these savings.
Social Development - Vulnerable Children White Paper (New,Unquantified)
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 require additional funding.
Social Development - Welfare Reform Costs (Changed,Unquantified)
The Government has agreed to a package of changes to the benefit system. Some costs were agreed in Budget 2012, and implementation has commenced. This risk reflects uncertainty around the additional costs of Welfare Reform, for which funding decisions will be sought in Budget 2013 and possibly future Budgets.
Social Development - Welfare Reform Forecast Benefit Savings (Changed,Unquantified)
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 in implementing the reforms, with a corresponding impact on benefit expenditure.
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 and an expectation that agreements will be managed within forecasts.
