June 01 Rural Bulletin - Budget Snapshot

Budget Snapshot

Where the Money Comes From

(Revenue = $40 billion)

Operational Revenue	5%
Fees, fines, levies	1%
Other indirect tax	10%
Withholding & other direct tax	4%
Company tax	12%
Individuals	45%
GST	23%

Where the Money Goes ($ million)

Area	2001-02	2000-01
Social Welfare	13,826	13,263
Education	7,056	6,733
Health	7,684	7,272
Core government services	1,552	1,590
Law & order	1,640	1,583
Defence	1,153	1,280
Finance costs	2,395	2,484
Other	4,059	4,141

Super

The planned NZ Superannuation Fund gets its first injection of $600 million (the assumed transfers for the subsequent 3 years are $1.2 billion, $1.8 billion and $2.5 billion, respectively).

Health

Main points include:

oral health strategy $3.9 million, palliative care $3.7 million, Pacific provider development $2.8 million;
hospital services, $46.7 million;
primary care, $23.5 million;
disability support services, $44.6 million;
maternity services, $3.7 million (this is meant to particularly help Maori and rural women with additional antenatal needs);
pharmaceutical and laboratory testing, $8.88 million, vaccine costs, $0.8 million;
$3.9 million to improve the National Cervical Screening Programme; and
$7.4 million for continuing mental health services following the Mason Review of mental health services.

Children and Families

CYFS will receive an additional $184.4 million over the next 4 years ($36.2 million in 2001/02) to put in place the recommendations of Mick Brown's report, 'Care and Protection is about Adult Behaviour'. Other measures include (funding is for 4 years unless specified):

$28.8 million for staff recruitment and retention;
$56 million to meet expected growth in the demand for care services for at-risk children and young people;
$28.4 million to provide and develop services for children with high and complex needs (funded jointly with education and health); and
additional operating expenditure of $37.6 million and capital expenditure of $25 million to build new purpose-built residences for the care of young people with particular conditions such as conduct disorder.

Funding also for continuing the five community programmes for Maori Youth at Risk of Offending and the Wraparound Programme ($6.2 million) and to prevent youth suicide ($2.8 million).

'Economic Opportunity' Package

Total funding for Vote Industry and Regional Development in 2001/02 is $96.183 million, up from $49.492 million in 2000/01. Fifteen new or expanded economic development programmes announced today come under six headings:

Building Future Capability ($6.2 million per year from 2001/02, $24.8 million over 4 years); three projects:
$2.250 million a year for a 'brain gain' scheme to identify and network with NZers who are world class thinkers;
$2 million a year to promote a culture of enterprise and increase the number of NZers willing to turn their ideas into commercial ventures; and
$1.95 million a year to support the development of promising individuals in science and innovation.

Building the Base of Business ($5.107 million per year, $20.428 million over 4 years); three projects:

expanding the Incubator Support Programme ($0.6 million to $1.8 million);
$1.125 million in 2001/02 and following years for raising number of Technology in Industry Fellowships (TIFs); and
$2.813 million per year for continued funding of Enterprise Award Scheme.

Strategies and Partnerships ($9.117 million in 2001/02, $33.336 million over 4 years); four programmes including:

$2.08 million in 2001/02 and $2.170 million in each of the following 3 years to develop and put in place sector strategies (for industries identified as being job-rich, high-skill, and high-value);
expanding the regional partnerships programme from $5.625 million in 2000/01 to $11.25 million in 2001/02 and $16.875 million in 2002/03 and the following years;
$1.406 million for pilot community financing programmes in Northland and in Rangitikei/Wanganui/ Ruapehu; and
two funds of $2 million per year each, to enable Ministers to act quickly and flexibly as priorities for industry and regional development are identified.

High Growth Potential ($845,000 in 2001/02, $4.538 million over 4 years.); expanding two existing schemes:

funding for Business Growth Service expanding to $6.75 million for 2001/02; and
expanding Major Investment Fund to $3.375 million for 2001/02;
Smart Government ($1.315 million in 2001/02, $6.604 million over 4 years);
expanding the Industrial Supplies Office; and
money to help run major sector-specific events (e.g., showing yacht building to America's Cup visitors).

Jobs for Students (details to be announced for getting students into high-quality summer holiday jobs).

Employment

$44.7 million budget package to give beneficiaries skills and opportunities to move into paying jobs. Details include:

$2.2 million to streamline the administration of Family Support by the Department of Work and Income (DWI) to ensure that beneficiaries do not lose due entitlements when they take up employment opportunities;
$300,000 to extend assistance via the New Employment Transition Grant to couples who have dependent children;
a new $725,000 information campaign by DWI and Inland Revenue to inform beneficiaries of the transition-to-work and in-work assistance for which they are eligible;
$2 million to increase support which can be provided by the Work Start Grant;
Budget spending to up-skill beneficiaries include (figures over 4 years unless specified):
$3.6 million to provide basic literacy assistance for up to 2,000 job seekers;
$4 million in 2001/02 for improved transition-to-work and in-work support for people with disabilities;
$3 million for a pilot programme, to run in 2002 and 2003, providing tailored assistance to Sickness and Invalids Benefit recipients;
$1.2 million towards an Early Intervention Home Visit Pilot programme, starting this August;
$20.2 million to provide continued support to assist people in work or training to access subsidised childcare, and out-of-school care (OSCAR) during school holidays; and
$7.2 million to the Community Employment Group to develop community-based employment projects.

Also:

$3.6 million is to be spent backing social entrepreneurs;
$1.6 million to support small business development amongst Pacific women; and
$2 million for an Ecoworks programme which will assist community organisations to develop new waste management, eco-tourism and habitat protection initiatives.
Education
$30 million over the next 4 years to put in place the policy of equity funding for the early childhood sector (this targets community based early childhood education centres in low socio-economic or isolated areas);
school operation funding increases by 1.6%;
$27.4 million (including $19 million new funding), over 4 years, for leadership and management development for principals;
$17.1 million, over 4 years, on projects for better monitoring and introducing an electronic administration system for schools;
$18 million over 4 years to fund the Adult Literacy Strategy;
$9.1 million, over 4 years, for administrative support for small schools; and
$15 million per year for bringing in the National Certificate in Educational Achievement (NCEA).

Industry Training

A total of $56 million new funding over the next 4 years to buy an estimated 17,400 additional industry training places. Specifics include:

up to $1 million more this coming year on a training project, to increase employees' access to learning through the use of new learning technologies, e.g., computer-based learning;
about $2.0 million in 2001/02 to increase to 14,750 the number of Youth Training placements, especially those teaching basic literacy, numeracy and communication skills to long term unemployed 16-17 year olds; and
pilot 'tertiary education learning and assessment centres' designed for people at risk of educational failure.

Tertiary Education

Increased funding (2.6%) for tertiary institutions to freeze their fees again next year. Also:

a Centres of Research Excellence Fund ($40.6 million over 4 years). Note: to have access to the fund, an institution will have to agree to freeze its student fees;
four new tertiary teaching awards, worth $50,000 each;
funding for the Office of the Ombudsmen to investigate tertiary education complaints and to work more closely with institutions in addressing complaints;
a new training programme to strengthen governance in public tertiary institutions;
creating another 4000 places annually to allow 5000 low-income NZers to receive free comprehensive career guidance; and
continuing the CareerPoint 0800 information line; and
$2.13 million to help set up a Tertiary Education Commission.

Maori

a $15 million ($3 million in year 1, $6 million in year 2 and $6 million in year 3 - 2003/04) whanau, hapu, iwi and Maori Communities' Development Direct Resourcing Fund, to be managed by Te Puni Kokiri;
on-going funding of two programmes announced in last year's Budget - $2.88 million for the Maori Business Facilitation Service and $8.5 million for Capacity Building;
funding for Maori television ($10.86 million in 2001/02 and $10 million a year thereafter); and
five Maori regional tourism organisations will share new funding of $338,000 in 2001/02.

Business, Research and Innovation

The NZ Venture Investment Fund is being launched to finance business start-ups, in partnership with private sector venture capital. The Government is putting in $100 million seed capital. The Fund will invest in a number of 'drop-down' funds focused on seed and start-up investments in NZ businesses. The parent fund will be a minority investor in the drop-down funds, which will be managed by private-sector fund managers.

Also, there's new spending ($11.6 million) in Vote Research, Science and Technology on, for example:

an extra $2.3 million for the New Economy Research Fund, which supports research with commercial prospects;
a $2 million increase for the Marsden Fund, which supports 'blue skies' or basic research; and
$5 million to move health research to a fully-funded basis and $1 million more for environmental research.

Stronger Communities

A $31.1 million Budget package, 'Community and Voluntary Sector', including (figures over 4 years unless specified):

a $15.2 million increase for community, iwi and Maori providers funded by Child, Youth and Family to deliver community-based services such as sexual abuse and family violence counselling and home parenting skills;
$2.19 million to support volunteering;
$3.6 million ($900,000 in 2001/02) to support social entrepreneurs and local leaders make a difference in their communities;
$6.9 million ($1.733 million in 2001/02) for the successful HIPPY and support programmes run from Family Service Centres;
$930,000 this coming year to gain a better picture of the voluntary sector;
$700,000 this coming year to begin to put in place the recommendations of the Community and Voluntary Sector Working Party; and
$2.2 million to support the work of the 10 volunteer centres.

Police and Justice

$22 million as the first instalment of the estimated $90 million to be provided for the new Sentencing and Parole regime;
$7 million, over 4 years, on programmes to reduce re-offending ($2.2 million in 2001/02);
$500,000 a year to support victims of crime by local victim support groups;
$165.5 million more, over 4 years, to the NZ Police; and
$55.9 million, over 4 years, to build two prisons in South Auckland.
State and Community Housing
$20 million for 300 more state houses in 2001/02;
an extra $110 million over 4 years to speed up efforts to modernise state housing (affects about 9000 houses);
$2.5 million in 2001/02, rising to $17 million per year in the following 3 years, for home loans in rural areas;
$19.5 million over 4 years to enable at least 125 more community houses to come into being; and
$4.5 million a year to help emergency and support housing groups who rent from Community Housing but who have difficulty meeting normal rent payments.

Environment (Announced 9 May)

$16 million over 3 years to improve visitor facilities on DoC land;
$10 million over 4 years for conservation awareness;
funding to control bovine Tb, prevent foot and mouth disease from entering NZ, control the spread of Asian kelp, and fund a South Island survey of freshwater pest fish;
extra funds to Ministry for the Environment ($6 million this year, $2 million next year);
funds to develop environmental performance indicators and to improve the collection of agriculture and horticulture statistics; and
funding for organic farming

Defence (Announced 8 May)

$300 million increase in next 5 years and around $700 million in next 10 years for Vote: Defence Force; and
re-equipping programme for Army, multi-role vessel with long distance and southern ocean capabilities to replace HMNZS Canterbury on retirement, upgrade of Air Force's Orion, C-130 Hercules and Iroquois fleet.

Miscellaneous

almost $100 million over the next 5 years for sports, fitness and leisure (to put in place recommendations from the recent Sport, Fitness and Leisure Review);
Office of Veterans Affairs gets $2 million more (to $204 million);
funding for Parliamentary Commissioner for the Environment remains about the same;
Ministry of Consumer Affairs up slightly to $5.46 million;
Tourism to receive $59 million, of which $55 million to be spent on marketing NZ overseas as a holiday destination;
$5.2 million, before the next election, mostly to train people who make the election work smoothly;
$1 million of extra funding for the new mediation service that was created when the Employment Relations Act was introduced;
$500,000 increase for the Pacific Business Trust;
$4.5 million to Trade NZ for an e-commerce strategy for exporters;
$7.3 million over the next 4 years for the new Embassy in Brazil;
more money to Trade NZ ($1.034 million in 2001/02, $1.878 million in 2002/03, $2.721 million in 2003/04 and $3.565 million in 2004/05);
to support regional museum development, $2.55 million in 2001/02, $5 million in 2002/03 and $7.5 million the following year;
refugee resettlement services will get $350,000 more a year, for extra support services to help United Nations-mandated refugees and their families resettle in NZ; and
$13.1 million more per year to IRD to improve its enforcement capability and to help it recruit and retain staff.

Contact for Enquiries

The Ministry of Agriculture and Forestry
Pastoral House
25 The Terrace
PO Box 2526, Wellington

Tel: 0800 00 83 33
Fax: +64 4 894 0720
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