Coalition and Confidence and Supply Agreements Covered
The costs of delivering on commitments made in the Coalition and Confidence and Supply Agreements will be met within the operating and capital allowances set out in the 2018 Budget Policy Statement, Finance Minister Grant Robertson says.
“The Budget Policy Statement today shows that over the next four Budgets, operating allowances provide for $21.7 billion of new expenditure, and capital allowances provide for $12.6 billion of new investments. These allowances are over and above the costs of the 100-Day Plan, which are already fully accounted for in the Treasury’s Half Year Economic and Fiscal Update forecasts.
“These allowances were set in light of the Treasury’s forecasts for the economy and in accordance with the Government’s Budget Responsibility Rules, including the target to reduce net core Crown debt to 20% of GDP within five years of taking office.
“On current estimates, beyond the 100-Day Plan, the Government’s policy programme is expected to result in $15.1 billion of additional operating spending across the forecast period. This includes the costs of the commitments in the Coalition Agreement between Labour and New Zealand First, the Confidence and Supply Agreement between Labour and the Green Party, and remaining policy elements,” Grant Robertson says.
As is normal, these commitments are now all being put through the Budget process by the Treasury and other departments to finalise costings and delivery timeframes. Specific allocations will be announced as part of Budget 2018.
“The current estimate is that the net operating expenditure cost of the Agreements, once funding earmarked in the pre-election Fiscal Plan has been accounted for, is $419 million over the forecast period. The costs of some policies are not yet able to be estimated. These will be accommodated within the $6.6 billion of remaining unallocated operating expenditure across the forecast period,” Grant Robertson says.
“A net figure is being used because many of the commitments made in the Coalition Agreement and Confidence and Supply Agreement will be funded within the allocations made in the pre-election Fiscal Plan. For example, commitments in Health and Education can be funded from money set aside for increased spending in those areas.
“From a capital perspective, the additional commitments in the Coalition Agreement and the Confidence and Supply Agreement total approximately $3.7 billion in additional capital investment over and above the commitments in the 100-Day Plan for KiwiBuild and restarting contributions to the New Zealand Superannuation Fund. These can be accommodated within the available capital allowances which total $12.6 billion.
“The Government will deliver on all the commitments made in the Coalition and Confidence and Supply Agreements. They are part of our transformative programme that will deliver sustainable and inclusive growth and the strong public services that New Zealanders want and need.
“New Zealanders can go into the Christmas break confident that the Government’s books are in order, our policy programme with our Coalition and Confidence and Supply partners can be afforded with room to spare, and that we are being prudent by setting our goals to deliver surpluses across the economic cycle, are ensuring Government spending fits within the recent range, and keep reducing the Government’s net debt position,” Grant Robertson says.