Budget allowances show how much new investment and spending is available in each Budget over the next four years. In this BPS the Government has kept the operating allowances as presented in Budget 2019.
The Government has decided to increase the multi-year capital allowance by $4.0 billion as part of the $12.0 billion increase in capital investment. The multi-year capital allowance was introduced in Budget 2019 and uses a four-year funding envelope, rather than a single-year allowance. After Budget 2019 decisions, $4.4 billion of the allowance was remaining, meaning $8.4 billion is now available from the multi-year allowance for capital investment across the period.
A further $8.0 billion of capital expenditure will also be announced in this financial year. This capital expenditure, in addition to the multi-year capital allowance, brings the total available between now and Budget 2023 to $16.4 billion.
The operating and capital allowances may change as the fiscal outlook develops and more information becomes available.
The total levels of additional investment and current baselines in the Budget are consistent with the Government's target of maintaining net debt between 15 and 25 per cent of GDP and the Government's short-term fiscal intentions. The Government will use these allowances to prioritise responsible investments that enhance the wellbeing of New Zealanders.
Table 1 - Budget allowances before pre-commitments
|$ billion||Budget 2020||Budget 2021||Budget 2022||Budget 2023|
|Operating allowances (per year)||3.0||2.4||2.4||2.6|
|Multi-year capital allowance||← 8.4 →|
Source: The Treasury
In addition, as noted above, a further $8.0 billion of capital expenditure is being announced in this financial year.