Budget Process
Page updated 27 May 2009
Overview of the New Zealand government's Budget process, its key phases and the key Budget documents.
The Budget process allows the Government to:
- set its fiscal objectives in respect of revenue, expenditure, debt repayment and investment;
- maintain effective fiscal control and plan for the coming year and beyond;
- allocate the available resources, consistent with the Government's strategic objectives and priorities;
- fulfil the legislative requirements for the Budget; and
- seek authority from Parliament for spending.
All Ministers have a key role in the Budget process. Together, they agree on the Budget strategy and priorities for spending. On an individual level, Ministers identify priorities for departmental chief executives to guide preparation of Budget submissions. Vote Ministers drive the development, fine-tuning and negotiation of Budget and baseline submissions and packages in their Vote areas as part of the Government's overall Budget package.
Specific Phases of the Budget
The Budget process can be divided into distinct phases:
Executive Phase
Strategic Phase
Covers Ministers' development of an overall strategy for the Budget, including strategic priorities and targets for spending, revenue, the projected fiscal surplus, and public debt intentions. Decisions taken during the strategic phase are reflected in the Government's Budget Policy Statement (BPS) which is required to be tabled in Parliament by no later than 31 March.
Initiatives Phase
Covers the development and review of Budget submissions, up to final Cabinet decisions on the Budget package. Vote Ministers' submissions have usually been considered on two separate tracks:
- Budget Baseline submissions, which update departmental budgets for the next three years for any technical adjustments required under existing policy; and
- Budget Initiative submissions, which detail proposals for new policy initiatives.
Parliamentary Phase
The process for obtaining Parliamentary support for the Government's Budget package. This includes examination of the Estimates for each Vote by the appropriate Select Committee.
Implementation Phase
Covers any subsequent amendments to the Budget. Where additional appropriations are needed during the course of the year, spending is authorised by Parliament before the end of the financial year, via the Appropriation (Supplementary Estimates) Bill. In the interim, authority for additional spending is provided by an Imprest Supply Act.
Diagram of Key Phases of the Budget
The following diagram outlines the relationship between Executive and Parliamentary roles in the Budget.
