Overview of the New Zealand Government's Budget process and its key stages.
Introduction#
The Budget process allows the Government to:
- set its fiscal objectives in respect of revenue, expenses, the operating balance (before gains and losses), debt and investment;
- maintain effective fiscal control and plan for the coming year and beyond;
- allocate available resources, consistent with the Government's strategic objectives and priorities;
- fulfil the legislative requirements for the Budget; and
- seek authority from Parliament for spending, borrowing and taxing.
Specific phases of the Budget#
The Budget process can be divided into distinct phases:
Strategic phase#
The strategic phase generally occurs from June to December. This involves the development of an overall strategy for the Budget, including strategic priorities and targets for spending, revenue, the projected fiscal surplus and public debt intentions.
Decisions taken during the strategic phase are reflected in the Government's Budget Policy Statement (BPS) which is required to be tabled in Parliament by no later than 31 March.
Decision phase#
The decision phase generally occurs from January to April. Agencies prepare initiatives on Ministers’ behalf and these are put forward for consideration. The Treasury then assesses these initiatives and prepares recommendations on which initiatives Ministers should support.
This advice is then considered by Budget Ministers (the Prime Minister, the Minister of Finance and the Associate Ministers of Finance) who put forward a Budget package to Cabinet for a final approval.
Budget production phase#
Following decisions by Cabinet on the Budget package, the Treasury and agencies prepare all the required documents for presentation on Budget Day. This includes the Estimates of Appropriations, the Budget Economic and Fiscal Update, the Fiscal Strategy and Child Poverty Reports, as well as a media kit containing the Minister of Finance's Budget Day speech, and any other discretionary products such as the Budget at a Glance, press releases, and the Summary of Initiatives.
Legislative phase#
The final phase of the Budget process involves obtaining Parliamentary support for the Government's Budget package (all spending for the year ahead). This includes examination of the Estimates for each Vote by the appropriate select committee.
Subsequent changes after the Budget#
Where additional appropriations are needed during the course of the year, spending is authorised by Parliament before the end of the financial year, via the Appropriation (Supplementary Estimates) Bill. In the interim, authority for additional spending is provided by an Imprest Supply Act.