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Table 5 - Breakdown of expenses
Year ended
30 June
Actual 2010 Actual 2011 Actual 2012 Actual 2013 Actual 2014 Forecast
30 June 2014
Budget 13 Budget 14
$million              
Social security and welfare 21,185 22,005 22,028 22,741 23,281 23,595 23,329
Health 13,128 13,753 14,160 14,498 14,898 14,950 14,889
Education 11,724 11,650 11,654 12,504 12,300 12,389 12,411
Core government services 2,974 5,563 5,428 4,294 4,502 4,637 4,792
Law and order 3,191 3,382 3,403 3,456 3,501 3,561 3,575
Other core Crown expenses 11,811 14,097 12,403 12,813 12,985 13,235 12,620
Core Crown expenses 64,013 70,450 69,076 70,306 71,467 72,367 71,616
Crown entities, SOEs and eliminations 17,027 29,509 23,647 20,701 20,703 21,130 20,598
Total Crown expenses 81,040 99,959 92,723 91,007 92,170 93,497 92,214
% of GDP              
Social security and welfare 11.0% 11.0% 10.5% 10.7% 10.2% 10.4% 10.1%
Health 6.8% 6.8% 6.8% 6.8% 6.5% 6.6% 6.5%
Education 6.1% 5.8% 5.6% 5.9% 5.4% 5.4% 5.4%
Core government services 1.5% 2.8% 2.6% 2.0% 2.0% 2.0% 2.1%
Law and order 1.7% 1.7% 1.6% 1.6% 1.5% 1.6% 1.5%
Other core Crown expenses 6.1% 7.0% 5.9% 6.0% 5.7% 5.8% 5.5%
Core Crown expenses 33.3% 35.1% 33.0% 33.1% 31.2% 31.8% 31.0%
Crown entities, SOEs and eliminations 8.8% 14.7% 11.3% 9.7% 9.0% 9.3% 8.9%
Total Crown expenses 42.1% 49.8% 44.3% 42.8% 40.2% 41.0% 40.0%

Total Crown expenses were $92.2 billion in the latest year, $1.2 billion more than the year earlier. The increase reflected higher core Crown expenses of $1.2 billion.

Core Crown Expenses

Despite the nominal expenditure increase of $1.2 billion, core Crown expenses fell as a share of the economy to 31.2% of GDP (Figure 9) - the lowest ratio level since 2008.

Figure 9 - Core Crown expenses
Figure 9 - Core Crown expenses   .
Source:  The Treasury

Table 6 shows the largest contributors to the nominal increase in core Crown expenses over the year, with the following key areas contributing to the increase:

  • New Zealand Superannuation expenditure increased $0.7 billion, mostly a result of indexation and an increase in recipients of New Zealand Superannuation, from around 612,000 to 640,000.
  • Health and Ministry of Education expenses were higher ($0.4 billion and $0.2 billion respectively) than the previous year as a result of allocations in Budget 2013.
Table 6 - Movement in core Crown expenses ($ billion)
Year ended 30 June  
2013 core Crown expenses 70.3
New Zealand Superannuation 0.7
Health expenditure 0.4
Ministry of Education expenditure 0.3
Other (0.2)
 2014 core Crown expenses  71.5

Source: The Treasury

When compared to Budget 2014, core Crown expenses were $0.1 billion lower than expected.

The lower than forecast result was largely due to lower impairment expenses mainly relating to tax, KiwiSaver and Working for Families' debt. The impairment was $1.3 billion, which was $0.2 billion lower than forecast ($1.5 billion).

Figure 10 - Core Crown expenses variance comparison
Figure 10 - Core Crown expenses variance comparison   .
Source:  The Treasury

Other Expenses

While the SOE and CE sectors recorded expenses close to forecast, there were some overs and unders within this result.

  • Insurance expenses increased $0.5 billion, reflecting additional claims expenses for ACC and Southern Response.
  • DHB expenses were $0.3 billion higher than the previous year as a result of allocations to Health in Budget 2013.

These higher expenses were partly offset by $0.8 billion lower SOE electricity company expenses.

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