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Expenses

Table 5 - Breakdown of expenses
Year ended 30 June  Actual
2012
Actual
2013
Actual
2014
Actual
2015
Actual
2016
Forecast
30 June 2016
Budget
2015
Budget
2016
$ million              
Social security and welfare 21,956 22,459 23,026 23,523 24,081 24,275 24,296
Health 14,160 14,498 14,898 15,058 15,626 15,581 15,635
Education 11,654 12,504 12,300 12,879 13,158 13,134 13,215
Core government services 5,428 4,294 4,502 4,134 4,102 4,811 4,446
Law and order 3,338 3,394 3,463 3,515 3,648 3,582 3,691
Other core Crown expenses 12,403 12,813 12,985 13,254 13,314 13,148 13,099
Core Crown expenses 68,939 69,962 71,174 72,363 73,929 74,531 74,382
Crown entities, SOEs and eliminations 23,647 20,701 20,668 21,408 21,951 22,244 21,961
Total Crown expenses 92,586 90,663 91,842 93,771 95,880 96,775 96,343
% of GDP              
Social security and welfare 10.2% 10.3% 9.8% 9.7% 9.6% 9.7% 9.7%
Health 6.6% 6.6% 6.3% 6.2% 6.2% 6.2% 6.3%
Education 5.4% 5.7% 5.2% 5.3% 5.2% 5.3% 5.3%
Core government services 2.5% 2.0% 1.9% 1.7% 1.6% 1.9% 1.8%
Law and order 1.6% 1.6% 1.5% 1.5% 1.4% 1.4% 1.5%
Other core Crown expenses 5.8% 5.9% 5.5% 5.5% 5.3% 5.3% 5.2%
Core Crown expenses 32.0% 32.0% 30.3% 30.0% 29.4% 29.8% 29.7%
Crown entities, SOEs and eliminations 11.0% 9.5% 8.8% 8.9% 8.7% 8.9% 8.8%
Total Crown expenses 43.0% 41.4% 39.1% 38.8% 38.1% 38.7% 38.5%

Total Crown expenses were $95.9 billion in the latest year, $2.1 billion more than the year earlier. SOE expenditure decreased in line with decreases in SOE revenue while the core Crown and CE segments recorded expenditure increases. The core Crown segment recorded the largest increase of $1.6 billion.

Core Crown Expenses

Despite the nominal expenditure increase of $1.6 billion, core Crown expenses fell as a share of the economy to 29.4% of GDP (Figure 8).

Figure 8 - Core Crown expenses
Figure 8 - Core Crown expenses   .
Source: 

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

  • New Zealand Superannuation benefits increased $0.7 billion, mostly a result of indexation and an increase in recipients of New Zealand Superannuation, from around 665,100 to 690,600.
  • Health expenses were $0.6 billion higher mainly as a result of additional funding going to District Health Boards for increased demand for services (both hospital and community based) and to help meet cost pressures and population changes.
  • Education expenses were $0.3 billion higher than the previous year mainly as a result of new allocations in Budget 2015 for schools operations (teacher salaries and operating grants), special education and early childhood education funding.
Table 6 - Movement in core Crown expenses
Year ended 30 June ($ billion)
2015 core Crown expenses 72.4
New Zealand Superannuation 0.7
Health expenditure 0.6
Education expenditure 0.3
Other movements (0.1)
2016 core Crown expenses 73.9

Source:  The Treasury

Other Expenses

The SOE and CE sectors (including eliminations) also recorded expenses that were $0.5 billion (2.5%) higher than the previous year, this result was mainly attributable to higher insurance expenses in ACC and EQC, which together increased $0.8 billion, mostly reflecting additional claims.

Offsetting this, SOE expenditure was lower and matched with a reduction in income as mentioned above.

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