Appropriation (2024/25 Confirmation and Validation) Bill

Appropriation (2024/25 Confirmation and Validation) Bill EXPLANATORY NOTE GENERAL POLICY STATEMENT It is a basic constitutional principle that the Government can spend public money and incur expenses and capital expenditure only in accordance with appropriations made by an Act of Parliament and in an otherwise lawful manner. However, Parliament has, in the Public Finance Act 1989 (the Act ), conferred limited authority on the Governor-General to vary, by Order in Council, appropriations made by Parliament and on the Minister of Finance to approve expenditure in excess of an existing appropriation by Parliament. Any other unappropriated expenditure must be validated by an Appropriation Act. Section 26A of the Act authorises the Governor-General, by Order in Council, to direct that an amount appropriated for an output expense appropriation in a Vote be transferred to another output expense appropriation in that Vote. There are 3 restrictions. First, the transfer must not increase that appropriation for the financial year by more than 5%. Second, there must not have been any other transfer under section 26A of the Act to that appropriation during the financial year. Third, the total amount appropriated for all output expense appropriations for that Vote for the financial year must remain unaltered. A clause that confirms those Orders in Council must be included in an Appropriation Bill that applies to that financial year. This Bill confirms the Public Finance (Transfers Between Outputs) Order 2025, which was made under section 26A of the Act ( clause 5 ). Section 4 of the Act prohibits the incurring of expenses or capital expenditure, except as expressly authorised by an appropriation, or other authority, by or under an Act. Sections 8 and 9 of the Act require appropriations to be limited to a specified amount and limited to the scope of the appropriation. Section 26B of the Act authorises the Minister of Finance to approve the incurring of expenses or capital expenditure in the last 3 months of the financial year in excess, but within the scope, of an existing appropriation by Parliament. This is subject to a limit that is the greater of $10,000 and 2% of the total amount appropriated for that appropriation by all Appropriation Acts for that financial year. The approval must be given not later than 3 months after the end of the financial year concerned. Expenses and capital expenditure incurred under the approval must be confirmed in an Appropriation Bill that applies to that financial year. This Bill confirms expenses and capital expenditure incurred for the 2024/25 financial year with the approval of the Minister of Finance under section 26B of the Act ( clause 6 ). Details of this confirmation are set out in Schedule 1 . Section 26C of the Act requires the incurring of expenses or capital expenditure without appropriation, or other authority, by or under an Act to be validated by an Act of Parliament. For the 2024/25 financial year, certain expenses and capital expenditure were incurred that require validation by this Bill in accordance with section 26C of the Act. Clause 7 validates these expenses and capital expenditure, the details of which are set out in Schedules 2 and 3 as follows: Schedule 2 contains details of expenses that were incurred in excess of existing appropriations: Schedule 3 contains details of expenses and capital expenditure that were incurred without appropriation or other authority (including expenses and capital expenditure incurred outside the scope of an existing appropriation and expenses and capital expenditure incurred without appropriation at all). This Bill also validates capital expenditure incurred in the 2023/24 financial year by the Ministry of Business, Innovation, and Employment without appropriation, or other authority, by or under an Act. DEPARTMENTAL DISCLOSURE STATEMENT A departmental disclosure statement is not required for this Bill. CLAUSE BY CLAUSE ANALYSIS Clause 1 is the Title clause. Clause 2 is the commencement clause. The Bill comes into force on the day after Royal assent. Clause 3 states the purpose of the Bill, which is to confirm and validate matters relating to the 2024/25 financial year and to validate a matter relating to the 2023/24 financial year. Clause 4 defines terms used in the Bill. Clause 5 confirms the Public Finance (Transfers Between Outputs) Order 2025. That order, which came into force on 30 June 2025, directed that fiscally neutral transfers be made decreasing the amounts appropriated for certain output expense appropriations and increasing the amounts appropriated for certain other output expense appropriations. Clause 6 confirms the incurring of expenses and capital expenditure for the 2024/25 financial year in excess, but within the scope, of existing appropriations in accordance with the approval of the Minister of Finance under section 26B of the Public Finance Act 1989. The expenses and capital expenditure confirmed by this clause are set out in Schedule 1 . Clause 7 validates, for the purposes of section 26C of the Public Finance Act 1989, the incurring of unappropriated expenses and capital expenditure by departments for the 2024/25 financial year. The expenses and capital expenditure validated by this clause are set out in Schedules 2 and 3 . Clause 8 validates the incurring of capital expenditure by the Ministry of Business, Innovation, and Employment for the 2023/24 financial year without appropriation, or other authority, by or under an Act. The Parliament of New Zealand enacts as follows: 1 Title This Act is the Appropriation (2024/25 Confirmation and Validation) Act 2026 . 2 Commencement This Act comes into force on the day after Royal assent. 3 Purpose The purpose of this Act is to— a confirm and validate matters relating to the 2024/25 financial year; and b validate a matter relating to the 2023/24 financial year. 4 Interpretation In this Act,— 2023/24 financial year means the financial year ending with 30 June 2024 2024/25 financial year means the financial year ending with 30 June 2025. Terms or expressions used and not defined in this Act but defined in the Public Finance Act 1989 have, in this Act, the same meanings as in the Public Finance Act 1989. 5 Confirmation of Order in Council directing transfer of amounts between output expense appropriations The Public Finance (Transfers Between Outputs) Order 2025 is confirmed. 6 Confirmation of expenses and capital expenditure incurred in excess, but within scope, of existing appropriations and approved by Minister of Finance The incurring of expenses and capital expenditure approved by the Minister of Finance under section 26B of the Public Finance Act 1989 for the 2024/25 financial year and described in subsections (2) and (3) is confirmed. The expenses and capital expenditure are the expenses and capital expenditure incurred in excess, but within the scope, of the existing appropriations set out in column 3 of Schedule 1 . The amounts of the approved expenses and capital expenditure are shown in column 4 of Schedule 1 alongside the existing appropriation for which the approval was given. 7 Validation of unappropriated expenses and capital expenditure for 2024/25 financial year The incurring of expenses or capital expenditure by a department in the circumstances set out in subsection (2) or (3) is validated for the purposes of section 26C of the Public Finance Act 1989. The circumstances in this subsection are that, for the 2024/25 financial year, the department incurred expenses in excess of the existing appropriations set out in column 3 of Schedule 2 alongside that department. The circumstances in this subsection are that, for the 2024/25 financial year, the department incurred expenses or capital expenditure without appropriation, or other authority, by or under an Act against the categories of expenses or capital expenditure set out in column 3 of Schedule 3 alongside that department. In this section,— capital expenditure means the amount of capital expenditure set out in column 4 of Schedule 3 alongside the relevant department department means a department specified in column 1 of, as appropriate, Schedule 2 or 3 expenses means the amount of expenses set out in column 4 of, as appropriate, Schedule 2 or 3 alongside the relevant department. 8 Validation of unappropriated capital expenditure incurred by Ministry of Business, Innovation, and Employment for 2023/24 financial year The incurring of capital expenditure by the Ministry of Business, Innovation, and Employment for Vote Business, Science and Innovation in the circumstances set out in subsection (2) is validated. The circumstances are that— a the amount of capital expenditure is, for the 2023/24 financial year, $5,602,000; and b the capital expenditure was incurred in relation to loans made to Hiringa Refuelling New Zealand Limited; and c the capital expenditure was incurred without appropriation, or other authority, by or under an Act. 1 Confirmation of expenses and capital expenditure incurred in excess, but within scope, of existing appropriations for 2024/25 financial year with approval of Minister of Finance The following table is small in size and has 4 columns. Column 1 is headed Administering department, column 2 is headed Vote, column 3 is headed Appropriation, and column 4 is headed Amount $(000). Column 1 Column 2 Column 3 Column 4 Administering department Vote Appropriation Amount $(000) Police, New Zealand Police Departmental Output Expenses Road Safety Programme 5,294 Social Development, Ministry of Social Development Non-Departmental Capital Expenditure Student Loans 21,296 2 Validation of expenses incurred in excess of existing appropriations for 2024/25 financial year The following table is small in size and has 4 columns. Column 1 is headed Administering department, column 2 is headed Vote, column 3 is headed Category of expenses or capital expenditure, and column 4 is headed Amount $(000). Column 1 Column 2 Column 3 Column 4 Administering department Vote Appropriation Amount $(000) Defence Force, New Zealand Defence Force Departmental Output Expenses Navy Capabilities Prepared for Joint Operations and Other Tasks 19,102 Non-Departmental Other Expenses Service Cost - Veterans’ Entitlements 1,451,000 Public Service Commission Public Service Multi-Category Lake Alice Unit Torture Redress Payments 5,358 Transport, Ministry of Transport Non-Departmental Other Expenses Transport Connectivity with Isolated Communities 0.406 3 Validation of expenses and capital expenditure incurred without appropriation or other authority for 2024/25 financial year The following table is small in size and has 4 columns. Column 1 is headed Administering department, column 2 is headed Vote, column 3 is headed Appropriation, and column 4 is headed Amount $(000). Column 1 Column 2 Column 3 Column 4 Administering department Vote Category of expenses or capital expenditure Amount $(000) Business, Innovation, and Employment, Ministry of Business, Science and Innovation Non-Departmental Capital Expenditure Energy: Investment in Infrastructure projects 1,353 Defence Force, New Zealand Defence Force Departmental Other Expenses Response to the sinking of the HMNZS Manawanui – ex gratia compensation 6,320 Justice, Ministry of Te Arawhiti Non-Departmental Other Expenses Stafford v Attorney-General Litigation Settlement Costs 2,400 Māori Development—Te Puni Kōkiri, Ministry of Māori Development Non-Departmental Other Expenses Stafford v Attorney-General Litigation Settlement 660,000 Public Service Commission Public Service Non-Departmental Output Expenses Lake Alice Unit Torture Redress Payments 19,560