Glossary for Budget 2026 Documents
Allowances
The amount of new funding available at each Budget is set aside in envelopes called allowances. This is the amount of additional funding available for Budget decisions that increase expenditure or reduce revenue.
Operating allowance
An operating allowance is the amount of new funding available for the day-to-day operating costs of the Government.
Capital allowance
A capital allowance is the amount of new funding available to spend on assets that will increase the value of the Crown’s balance sheet – for example, investment into infrastructure like schools and hospitals.
Annual review
Scrutiny by the House and its committees of the performance for the previous financial year, and for the current operations, of Government departments, Offices of Parliament, Parliamentary agencies, Crown entities, state-owned enterprises, and public organisations.
Appropriations
Appropriations are legal authorities granted by Parliament to the Crown or an Office of Parliament to use public resources. Appropriations are set out in Appropriation Acts (see Appropriation Bill below) and the Estimates of Appropriations.
Appropriation Bill
A Government Bill that seeks authority from Parliament to spend public money and incur liabilities. Details of the Government’s spending plans are set out in papers that are presented in association with each Appropriation Bill, which becomes an Appropriation Act when the Bill is passed (see Estimates of Appropriations).
Assets
A resource controlled by an entity. A resource is an item with service potential or the ability to generate economic benefits.
Baselines
The level of funding approved for any given area of spending (e.g. Vote Education).
Budget
The Budget is the Appropriation Bill tabled to Parliament on Budget Day to authorise government spending for the next financial year. The process involves preparing and documenting the Government’s economic policies and spending plans each year, resulting in the introduction of an Appropriation Bill and the delivery of the Budget statement.
Budget at a Glance
The Budget at a Glance is an overview of the Budget information and contains the main points for the media and public.
Budget Economic and Fiscal Update
The Budget Economic and Fiscal Update includes the Treasury’s economic forecasts and the forecast financial statements of the Government, incorporating the financial implications of Government decisions and other information relevant to the fiscal and economic outlook. The Budget Economic and Fiscal Update also discusses key risks to the economic and fiscal forecasts.
Budget Day
The day identified by the Minister of Finance when the Government will present its Budget and deliver the Budget statement.
Budget Policy Statement
A paper presented by the Minister of Finance in the months before the Budget, foreshadowing the Budget and its policy goals. The Finance and Expenditure Committee examines the Budget Policy Statement and reports to the House.
Budget Speech
The Budget Speech is the statement the Minister of Finance delivers at the start of Parliament’s Budget debate. The statement generally focuses on the overall fiscal and economic position, the Government’s policy priorities and how those priorities will be funded.
Capital expenditure
The expenditure incurred to acquire or develop assets (including tangible, intangible, or financial assets, and any ownership interest in entities).
Consumers Price Index
Stats NZ’s official index to measure the rate of change in prices of goods and services purchased by households. Core or underlying inflation measures exclude or give little weight to extreme or irregular price movements.
Cost pressures
Additional funding needed because of the higher demand under current policy settings – for example, higher population growth or changes in demographics, the higher cost of delivering or continuing to deliver services due to external market factors (e.g. inflation) or collective bargaining agreements and wage progression pressures, or to fulfil an already existing regulatory or legislative requirement.
Core Crown
A reporting segment consisting of the Crown, departments, Offices of Parliament, Parliamentary agencies, the New Zealand Superannuation Fund and the Reserve Bank.
Core Crown expenses
The day-to-day spending (e.g. welfare benefit payments, public servants’ salaries, finance costs and maintaining national defence assets) that does not include capital expenditure on the construction or purchase of physical assets by the core Crown. This is an accrual measure of expenses and includes non-cash items, such as depreciation on physical assets.
Core Crown revenue
Consists primarily of tax revenue collected by the Government but also includes investment income, sales of goods and services and other revenue of the core Crown.
Economic outlook
A description of what is judged likely to happen in the future of the economy. The outlook includes forecast economic indicators such as gross domestic product (GDP) (including the major components of GDP), consumer prices, unemployment and employment, and the current account position of the balance of payments.
Estimates of Appropriations
A document that contains the supporting information to the Appropriation Bill. It includes information such as the legal boundary of each spend, what the expenditure intends to achieve, how performance is measured, and why the level of funding has changed from year to year. This document is tabled to Parliament on Budget Day together with the Appropriation Bill.
Financial assets
Any asset that is cash, an equity instrument of another entity (shares), a contractual right to receive cash or shares (taxes receivable and Accident Compensation Corporation levies), or a right to exchange a financial asset or liability on favourable terms (derivatives in gain).
Financial liabilities
Any liability that is a contractual obligation to pay cash (government stock, accounts payable), or that is a right to exchange a financial asset or liability on unfavourable terms (derivatives in loss).
Financial year
A year as it is set for public finance, being the period from 1 July of one calendar year to 30 June of the next.
Fiscal intentions (short-term)
Indications of the Government’s intentions for operating expenses, operating revenues and the impact of its intentions on the operating balance, debt and net worth over at least the next three years. These intentions are required under the Public Finance Act 1989.
Fiscal objectives (long-term)
The Government’s long-term goals for operating expenses, operating revenue, the operating balance, debt and net worth, as required by the Public Finance Act 1989. The objectives must be consistent with the defined principles of responsible fiscal management as outlined in the Act and must cover a period of at least ten years.
Fiscal outlook
The Treasury view of the Government’s financial performance and financial position over the current financial year and next four years (the forecast period). The outlook includes forecasts of the Government’s key fiscal indicators, such as core Crown revenue, core Crown expenses, the operating balance, the operating balance before gains and losses, and net core Crown debt.
Fiscal Strategy Report
The Public Finance Act 1989 requires the Minister of Finance to present to the House on Budget Day a report on the Government’s fiscal strategy. This must set out the Government’s short-term fiscal intentions, long-term fiscal objectives, revenue strategy and strategy for managing expenditure, assets and liabilities. The report must include fiscal projections for at least the next ten years.
Forecast period
For the purposes of the Treasury’s forecasts this reflects the current year and the next four years.
Gross domestic product (GDP)
A measure of the value-added of all goods and services produced in New Zealand. Changes in GDP measure growth or contraction in economic activity or output. GDP can be measured on either an expenditure or production basis and in either real or nominal terms.
Initiatives
Proposals with financial impact that are presented to Ministers during the Budget process. Initiatives that are accepted and approved by Ministers are reported in the Summary of Initiatives, which is included with the Budget documentation released.
Imprest Supply Act
An Act that seeks to give the Government temporary authority to incur expenses, capital expenditure and capital injections in advance of detailed spending proposals being approved through an Appropriation Act.
Key fiscal indicators
Indicators used to measure progress towards the Government’s fiscal strategy, depending on its long-term fiscal objectives and short-term fiscal intentions.
Labour productivity
Output per unit of labour input (where labour inputs might be measured as hours worked or number of people employed).
Macroeconomic
Relating to the performance, structure, behaviour, and decision-making of an economy as a whole.
Net core Crown debt
Net core Crown debt provides information about the sustainability of the Government’s finances and is used by some international rating agencies when determining the credit worthiness of a country. It represents gross sovereign-issued debt less core Crown financial assets (excluding advances and financial assets held by the NZ Superannuation Fund). Advance and financial assets held by the NZ Superannuation Fund are excluded as these assets are less liquid and/or they are made for public policy reasons rather than for the purposes associated with government financing.
Net debt
Net debt provides information about the sustainability of the Government’s finances. Net debt represents core Crown and Crown entity borrowings (excluding Kiwi Group Capital Limited) less core Crown financial assets (including advances). It includes the financial assets and borrowings of the NZ Superannuation Fund.
Net worth attributable to the Crown
Represents the Crown’s share of total assets less liabilities of the Government. It excludes minority interests’ share of those assets and liabilities.
Operating average
When funding is allocated from an operating allowance, the average per annum amount across the forecast period is deducted from the operating allowance.
Operating balance
Represents OBEGALx (refer below) plus gains and less losses. The operating balance includes gains and losses not reported directly as a movement against net worth. The impact of gains and losses on the operating balance can be subject to short-term market volatility and revaluations of long-term liabilities.
Operating balance before gains and losses (OBEGAL)
Represents total Crown revenue less total Crown expenses, excluding minority interest share. OBEGAL can provide a more useful measure of underlying stewardship than the operating balance as short-term market fluctuations are not included in the calculation.
Operating balance before gains and losses (OBEGALx)
Represents OBEGAL (refer above) excluding the revenue and expenses of the Accident Compensation Corporation.
Operating expenditure
The day-to-day spending (e.g. welfare benefit payments, public servants’ salaries, finance costs and maintaining national defence assets) that does not include capital expenditure on the construction or purchase of physical assets. This includes non-cash items, such as depreciation on physical assets.
Pre-commitment
The allocation of additional funding to a future operating allowance, prior to other funding decisions being made through the Budget process.
Projections
Projections relate to the period beyond the five-year forecast period and are based on long‑run economic and fiscal assumptions. For example, the projections assume no economic cycle and constant long-run interest, inflation and unemployment rates.
Public Finance Act 1989
The Public Finance Act 1989 is the statute that provides the core legislative framework within which the Government can borrow money or spend public money. It contains reporting requirements to ensure the Crown is transparent and accountable for its actions impacting on public finance.
Reprioritisation
In the Budget process, this is the reassignment of existing funding from one area to another.
Revenue
The income generated by the Government, primarily through taxes, levies, and other charges.
Savings
A reduction in cost or expenditure from baselines and tagged contingencies.
Select committee
A committee whose membership is confined to a limited number of members. Most of the committees are subject select committees, each of which deals with a particular subject area.
Supplementary Estimates
A document containing all changes to the estimates for the current financial year. This document is tabled alongside the Appropriation (Supplementary Estimates) Bill that amends appropriations for the current year.
Tagged contingency
Tagged contingency relates to funding that is ring-fenced for a particular purpose and held in the centre (i.e. not appropriated into baselines). The Treasury may use tagged contingencies as a policy tool where an initiative is commercially sensitive and final costs are subject to negotiation, or if the initiative is likely to be funded but needs further work before funding can be appropriated.
Tax revenue
The accrual, rather than the cash measure of taxation. It is a measure of tax over a given period in time, regardless of whether it has actually been paid.
Time-limited funding
Where funding is appropriated for a time-limited period only and does not represent an ongoing uplift to the Vote’s baseline.
Total Crown
Includes the core Crown (defined above) plus Crown entities, state-owned entities and other entities controlled by the Government Reporting Entity (as defined in the Budget Economic and Fiscal Update).
Votes
A Vote is a group of appropriations. When Parliament considers legislation relating to appropriations, the appropriations are grouped within ‘Votes’. Generally, a ‘Vote’ will group similar or related appropriations together (e.g. Vote Health includes all health-related appropriations that are the responsibility of the Minister of Health).
Year-ended
Graphs and tables within this document use different expressions of the timeframe. While some tables may refer to the end of the tax year (31 March), others will refer to the end of the Government’s financial year (30 June). Unless otherwise stated, references to 2026/27 or 2027 will mean the year ended 30 June.