Wellbeing Budget 2022

A Secure Future

Operating and capital allowances

The Budget 2022 operating allowance is set at $5.9 billion per annum, a slight decrease from what was announced in the Budget Policy Statement. This is a net figure, with investments offset by savings and reprioritisation of existing spending.

The Budget 2023 operating allowance has been increased to $4.5 billion per annum to reflect the higher costs of delivering public services. The Budget 2024 and Budget 2025 operating allowances have remained unchanged from those announced in the Budget Policy Statement.

With the introduction of multi-year processes, Budget 2022 includes investments spread across multiple Budgets. As a result, we have agreed on pre-commitments against future operating allowances totalling $1.98 billion per annum against Budget 2023 and $419 million per annum against Budget 2024.

Figure 16 - Illustrative example of multi-year processes and Budget allowances

Figure 16 - Illustrative example of multi-year processes and Budget allowances

Source: The Treasury

The Multi-Year Capital Allowance (MYCA) was increased by $4.0 billion at the BPS. This brought the total unallocated MYCA to $9.8 billion, after accounting for $2.3 billion of pre-commitments against the MYCA agreed since Budget 2021. Budget 2022 includes a $4.7 billion capital package, leaving $5.1 billion for allocation in future Budgets.

Table 5 - Budget allowances

Table 5 - Budget allowances
$billions Budget 2022 Budget 2023 Budget 2024 Budget 2025
Operating allowances at 2022 Budget Policy Statement (per year) 6.0 4.0 3.0 3.0
Operating allowances at Budget 2022 (per year, before pre‑commitments) 5.9 4.5 3.0 3.0
Multi-Year Capital Allowance at 2022 Budget Policy Statement ←     9.8     →                                    
Multi-Year Capital Allowance at Budget 2022 4.7 ←     5.1     →                        

Source: The Treasury

There remains significant uncertainty around the global COVID-19 and economic environment and these allowances will be kept under active review to ensure they remain appropriate.

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