Expenses
|
Year ended 30 June |
Forecast 30 June 2011 |
|||||||
|---|---|---|---|---|---|---|---|---|
| Actual 2006 | Actual 2007 | Actual 2008 | Actual 2009 | Actual 2010 | Actual 2011 | Budget 10 | Budget 11 | |
$ million |
||||||||
| Social security and welfare | 15,598 | 16,768 | 17,877 | 19,382 | 21,185 | 22,005 | 22,120 | 22,175 |
| Health | 9,547 | 10,355 | 11,297 | 12,368 | 13,128 | 13,753 | 14,043 | 13,774 |
| Education | 9,914 | 9,269 | 9,551 | 11,455 | 11,724 | 11,650 | 11,992 | 12,039 |
| Core government services | 2,507 | 4,817 | 3,371 | 5,293 | 2,974 | 5,563 | 3,979 | 6,357 |
| Law and order | 2,235 | 2,699 | 2,894 | 3,089 | 3,191 | 3,382 | 3,537 | 3,526 |
| Other core Crown expenses | 9,519 | 10,096 | 12,007 | 12,415 | 11,811 | 14,097 | 14,980 | 14,923 |
| Core Crown expenses | 49,320 | 54,004 | 56,997 | 64,002 | 64,013 | 70,450 | 70,651 | 72,794 |
| Crown entities, SOEs and eliminations | 15,015 | 14,725 | 18,845 | 19,397 | 17,027 | 29,509 | 19,762 | 24,103 |
| Total Crown expenses | 64,334 | 68,729 | 75,842 | 83,399 | 81,040 | 99,959 | 90,413 | 96,897 |
% of GDP |
||||||||
| Social security and welfare | 9.6% | 9.7% | 9.8% | 10.5% | 11.2% | 11.0% | 10.8% | 11.1% |
| Health | 5.9% | 6.0% | 6.2% | 6.7% | 6.9% | 6.9% | 6.9% | 6.9% |
| Education | 6.1% | 5.4% | 5.2% | 6.2% | 6.2% | 5.8% | 5.9% | 6.0% |
| Core government services | 1.5% | 2.8% | 1.8% | 2.9% | 1.6% | 2.8% | 2.0% | 3.2% |
| Law and order | 1.4% | 1.6% | 1.6% | 1.7% | 1.7% | 1.7% | 1.7% | 1.8% |
| Other core Crown expenses | 5.9% | 5.9% | 6.5% | 6.7% | 6.2% | 7.0% | 7.3% | 7.5% |
| Core Crown expenses | 30.5% | 31.4% | 31.1% | 34.5% | 33.8% | 35.2% | 34.7% | 36.4% |
| Crown entities, SOEs and eliminations | 9.3% | 8.6% | 10.3% | 10.5% | 9.0% | 14.7% | 9.7% | 12.1% |
| Total Crown expenses | 39.7% | 39.9% | 41.4% | 45.0% | 42.8% | 49.9% | 44.3% | 48.5% |
- Figure 8 - Core Crown expenses
- Source: The Treasury
Total Crown expenses increased by $18.9 billion from the previous year to stand at $100.0 billion. Of this increase, $13.6 billion was due to expenses arising from the Canterbury earthquakes; EQC insurance expenses were $11.7 billion higher than last year due to the Canterbury earthquakes and core Crown spending increased by $1.9 billion due to earthquake-related expenditure (the balance relates to other SOE and Crown entities). A more detailed analysis of earthquake expenses is provided in the Canterbury Earthquakes section below.
Core Crown expenses excluding earthquake-related expenses also increased by $4.5 billion compared to last year (figure 8). Increases in other operating expenses were also evident across the SOE and CE sectors but these increases were largely offset by increases in operating revenue.
Core Crown Expenses
| Year ended 30 June | |
|---|---|
| 2010 core Crown expenses | 64.0 |
| Earthquake related expenditure | 1.9 |
| Health expenses | 0.6 |
| Education expenses | (0.1) |
| Benefit expenses (excl. earthquake support) | 0.6 |
| Weathertight homes | 0.6 |
| Treaty settlements | 0.4 |
| ETS provision increase | 0.9 |
| Interest expenses | 0.8 |
| Other movements | 0.7 |
| 2011 core Crown expenses | 70.4 |
Core Crown expenses increased by $6.4 billion compared to the previous year as illustrated in Table 6. The main drivers of the increase included:
- Canterbury earthquake expenditure of $1.9 billion.
- Health expenses increased by $0.6 billion primarily as a result of new spending initiatives.
- Although education expenses decreased by $0.1 billion overall, this is due to a reversal of impairments on student loans of $0.4 billion. Excluding this impairment, education expenditure has increased by $0.3 billion primarily as a result of new spending initiatives.
- Benefit expenses (excluding earthquake-related benefits) increased by $0.6 billion. This increase was primarily attributable to increases in New Zealand Superannuation which rose by $0.5 billion. $0.3 billion of this increase was due to an increase in the number of recipients while indexation of benefits led to an increase of $0.2 billion. Policy changes also increased expenses marginally.
- The establishment of the Crown's weathertight homes financial assistance package has contributed $0.6 billion in expenses this year.
- Treaty settlements have increased in the current year with $0.5 billion of settlements compared to $0.1 billion in 2010.
- The Emissions Trading Scheme (ETS) saw more NZ Units issued compared with the previous year with more sectors entering into the ETS. In 2009/10 only the forestry sector had entered the Scheme.
- Interest expenses have increased compared to last year due to the higher levels of debt held (gross debt has increased from $53.6 billion to $72.4 billion).
- Figure 9 - Core Crown expenses by sector
- Source: The Treasury
Compared to expectations in Budget 2011, core Crown expenses were $2.3 billion lower than forecast primarily as a result of:
- Lower-than-forecast earthquake expenses primarily due to delays in assessing and measuring damage. This resulted in $1.2 billion lower expenses than forecast. These expenses are now expected to occur in the next financial year.
- Fewer NZ units were issued under the ETS than forecast resulting in $0.4 billion lower expenses.
- The remainder of this underspend in other operating expenses was across a number of departments and expense types.
