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Budget Management That Counts: Recent Approaches to Budget and Fiscal Management in New Zealand - WP 01/24

Annex 2: Extract from 2000 Budget Economic and Fiscal Update

Operating provisions for 1999/2000 to 2002/03

In the Budget Policy Statement (BPS), the Government set out a provision for new spending over the four years from 1999/2000 to 2002/03 of $5.9 billion (GST inclusive). The allocations have altered since those outlined in the BPS, as illustrated in the following table.

Table 2.5 – Change in cumulative fiscal provisions
$ million 1999/2000 2000/01 2001/02 2002/03 Total
Indicative fiscal provisions BPS 150 1,200 1,850 2,650 5,850
Fiscal provisions BEFU 420 1,230 1,790 2,425 5,865
Change 270 30 (60) (225) 15

Source: The Treasury

These amounts include a contingency for further initiatives to be developed during 2000/01. The contingency is $180 million a year in 2000/01 and subsequent years.

Since the BPS, the Government has decided to bring forward some spending into 1999/2000 and 2000/01.

To remain within the overall provision of $5.9 billion, the provisions for spending in the 2001 and 2002 Budgets have been reduced to $550 million and $575 million.

Budget 2000 decisions and the fiscal provisions for 1999/2000 to 2002/03

The Government has allocated $3.65 billion of the $5.9 billion as part of the Budget 2000 process. This is detailed in the following table.

Extract from 2000 Budget Economic and Fiscal Update (continued)

Table 2.6 – Budget 2000 policy decisions
2000 Budget initiatives (operating) ($ million, GST inclusive) 1999/00 2000/01 2001/02 2002/03 Total
Revenue initiatives:[19]          
Multi-rate fringe benefit tax - 80 65 65 210
Cancellation of tariff reductions - (35) (80) (85) (200)
Tobacco excise increase (20) (110) (78) (82) (290)
Anti-avoidance measures for 39% tax rate - (10) (20) (20) (50)
Total revenue (20) (75) (113) (122) (330)
Expense initiatives:          
Student loan changes 32 92 103 110 337
Other education 9 108 177 178 472
Increases in NZ Super rates 52 208 212 212 684
Health[20] 32 137 57 88 314
Housing – income-related rents - 55 98 104 257
Industry and economic development - 37 77 116 230
Social services (2) 56 66 71 191
Police 27 54 54 54 189
West Coast package 135 - - - 135
Inland Revenue - 36 36 36 108
Arts, culture and heritage 55 16 16 16 103
Research, science and technology - 30 30 30 90
Cancellation of border charging - 29 29 29 87
Biodiversity strategy - 17 27 38 82
Other environment initiatives 2 21 23 22 68
Maori Affairs 14 19 15 15 63
Foreign Affairs and TradeNZ - 18 16 12 46
Justice 5 22 19 19 65
All other initiatives 49 91 48 22 210
Total expenses 410 1,046 1,103 1,172 3,731
SOE/Crown entity changes          
Housing – changes to Housing NZ 30 79 70 70 249
Total 2000 Budget 420 1,050 1,060 1,120 3,650
Contingency for further initiatives in 2000/01 - 180 180 180 540
Total 2000 Budget including contingency 420 1,230 1,240 1,300 4,190
Provision for 2001 Budget - - 550 550 1,100
Provision for 2002 Budget - - - 575 575
Total fiscal provision 420 1,230 1,790 2,425 5,865

Notes

  • [19]A “negative” number represents an initiative that is generating a saving (or an increase in revenue) and therefore reduces the total amount accumulated against the fiscal provisions.
  • [20]This includes a correction to the Health baseline of ($84 million) in 2001/02 and 2002/03. Total new spending excluding this adjustment is $481 million.
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