The Treasury

Global Navigation

Personal tools


A Guide to Appropriations - November 2013


  • Appropriations are the basis on which Parliament authorises the executive government to incur expenses and capital expenditure. Without parliamentary authority, the government has no authorisation to incur expenses and capital expenditure and spend public money and therefore cannot govern.As such, appropriations are an important aspect of both the constitutional framework of New Zealand and the state sector management system.
  • This guide focuses on those rules for appropriations outlined in the Public Finance Act 1989 (the PFA 1989). The PFA 1989 requires each appropriation to be the responsibility of one Minister (or the Speaker) and to be administered by one department (or an Office of Parliament). Pages 3-4 outline what responsibility for, and administration of, an appropriation entail.
  • The PFA 1989 prescribes that each appropriation must have four dimensions - type, amount, scope and period. Pages 5-13 discuss each dimension and provide departments with information to make sure appropriations they administer are legally robust and achieve the intended approvals.
  • This guide does not cover the additional administrative requirements governing appropriations, such as when an item of capital expenditure should be referred to a Minister or Cabinet for approval. These requirements are set out in Cabinet Office Circulars, currently CO (10) 2 and CO (11) 6.
  • Appropriations must be approved by an Act of Parliament and are subject to a process of parliamentary scrutiny. Pages 14-16 detail the parliamentary process for approving appropriations.
  • Some provision is available to Ministers and departments to amend appropriations to adapt to changing circumstances. This is done through the granting of Imprest Supply, the baseline update process and also provisions to incur expenditure without appropriation in emergency situations. Page 17 discusses these provisions.
  • If a situation exists where expenditure is incurred without an appropriation, or not in accordance with the approved dimensions of an appropriation, a situation of unappropriated expenditure exists. Unappropriated expenditure is unlawful and needs to be remedied. Pages 18-20 discuss unappropriated expenditure and the available remedies.
  • The Auditor-General's controller function to ensure expenditure is lawful is outlined on page 21.
  • Appendix 1 (pages 22-23) provides some examples of transactions and events and indicates the type of appropriation required, if any.
Page top