Appropriations
Page updated 22 Aug 2011
Introduction to appropriations and Treasury guidance on the use and administration of appropriations.
What are appropriations?
An appropriation is the means by which Parliament gives legal authority to the Crown and Offices of Parliament to use resources. Appropriation Acts are the primary mechanism by which Parliament authorises Ministers to incur (on the Crown's behalf) expenses and capital expenditure in the day-to-day administration of government.
Appropriations are a permission only – there is no obligation on the Crown to incur any expense as a result of being granted an appropriation. However, overspending and transfers between appropriations are strictly governed by the requirements of the Public Finance Act.
No expenses or capital expenditure may be incurred unless in accordance with an appropriation or other statutory authority.
Appropriations are limited by amount, scope and period. These limits are legally binding. All expenses and capital expenditure may only be incurred in accordance with these specifications, except in the limited circumstances where the Act permits some variation to appropriations.
Appropriations are also specified by type of expense or capital expenditure. The types of appropriations are output expenses, benefits or other unrequited expenses, borrowing expenses, other expenses, capital expenditure and expenses and capital expenditure of an intelligence and security department.
The Auditor-General audits appropriations used and administered by departments and Offices of Parliament to ensure that expenses and capital expenditure have been incurred in accordance with appropriations.
For guidance on the re-organisation of policy advice-related appropriations following the Review of Expenditure on Policy Advice see Reorganisation of Appropriations for Policy Advice: Guide for Departments (August 2011).
Treasury Guidance Documents
- Guide to Appropriations (November 2008) - This guide explains the basics of appropriations, how they are approved by Parliament and what happens when they are breached.
- The Appropriations chapter of A Guide to the Public Finance Act (August 2005) explains what an appropriation is and the purpose of appropriations, explains the rationale behind accrual-based, output-focused appropriations, and describes the legislative process for appropriations and the link between appropriations and the Budget process. The various types of appropriations are described as well as the requirements in relation to specifying and using these appropriations and the consequences of breaching the limits of an appropriation.
- Treasury Circular 2007/05: Multi-year, Revenue Dependent and Department to Department Appropriations (11 May 2007) - Information on:
- multi year appropriations which are appropriations with a specific purpose and monetary limit that can be utilised over more than one year;
- revenue dependent appropriations that provide the authority to incur expenses up to the level of revenue received from sources other than the Crown;
- department to department appropriations - permanent legislative authority to incur expenses up to the level of revenue a department receives for the provision of outputs for, or on behalf of, another department.
- Measuring Remeasurements - Treasury application guidance note for departments on making judgments as to whether an item is a remeasurement or an expense requiring appropriation.
Related Information on the Treasury Website
- Estimates of Appropriations for the Government of New Zealand for the Year Ending 30 June 2010
- Archive of Budgets 2009 to 2000 - Previous years’ Estimates of Appropriations and Supplementary Estimates of Appropriations.
