2016 Budget Report - Bell Gully
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2016 Budget Report
2016 CCH Budget Report Thursday, 26 May
2016 Budget Report
This report has been prepared by CCH in‐house analysts with the
assistance of specialist pracĕĕoners from
2016 Budget Report
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sense and ease of doing business.
In this Budget Report
Highlights
Overview
Limited tax changes
Tourism
ETS subsidy removal
Housing
Health
Tobacco excise duty
Educaĕon
Christchurch regeneraĕon
New Zealand Super FundNew Zealand Super Fund
Other announcements
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No news is ... er ... good news?
Finance Minister Hon Bill English revealed no tax surprises in the 2016 Budget Speech. In this era of
consultaĕon with all affected stakeholders, perhaps that is not surprising. Unlike the Australian Budget
of three weeks ago, there are no shock “reveals” of new taxes announced for mulĕnaĕonal corporates
or dramaĕc cuts to the corporate tax rate.
A reducĕon in income tax is cauĕously foreshadowed over the next few years "if economic and fiscal
condiĕons allow".
The key tax measures in Budget 2016 were revealed by the Prime Minister John Key last month in a
pre‐Budget announcement. Presented as a “business‐friendly tax package”, the announcement
included the following:
Reform of the provisional tax regime — removal of use of money interest (UOMI) for the first
two provisional tax instalments, extending the safe harbour threshold from $50,000 to $60,000
and the introducĕon of a new "accounĕng income method" (AIM) that will allow taxpayers with
a turnover of less than $5m to use their accounts to calculate and pay provisional tax monthly
or two‐monthly.
Overhaul of the rules for schedular withholding payments — giving contractors the opĕon of
choosing their own withholding rate (while having a minimum 10% rate for resident contractors
and 15% for non‐resident contractors), bringing labour‐hire firms within the net for withholding
payments, and bringing in a voluntary opĕon for contractors not currently covered by the
schedular withholding rules.
Removal of late payment penalty — the current 1% monthly incremental late payment penalty
will be phased out in a staggered approach.
Greater transparency — tax debt in serious cases will be disclosed to credit reporĕng agencies,
and Inland Revenue will share informaĕon with the Registrar of Companies in cases where a
serious offence has been (or will be) commiĥed.
The Finance Minister also referred to:
New Zealand's recent signing of an internaĕonal agreement that increases informaĕon sharing
between the revenue authoriĕes of 39 countries
the current "John Shewan" review of New Zealand's foreign trust regime, and
the conĕnuing work to address tax avoidance issues that New Zealand is carrying out as an
OECD member.
In terms of capital spending, the Budget allocates $857m for Inland Revenue's new tax administraĕon
system.
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Overview
The 2016 Budget contains no major fiscal or social policy announcements. Rather, the message from
the Minister of Finance is that New Zealand is heading in the right direcĕon and trends are favourable,
but future economic shocks cannot be ruled out. Therefore, the economy demands further prudent
management.
The key elements of this year’s Budget are directed at science and innovaĕon, infrastructure
investment, health and other social investment. The maintenance of operaĕng surpluses is a keyinvestment, health and other social investment. The maintenance of operaĕng surpluses is a key
objecĕve, together with debt reducĕon. It is clear that any prospect of tax rate reducĕons is
dependent on the achievement of these laĥer goals.
In terms of fiscal strategy the focus is on the medium term. Temporary variaĕons in forecasts, such as a
projected reducĕon in the tax take, are to be disregarded in the interests of business and taxpayer
certainty.
Essenĕally, the Government has delivered a mid‐term Budget which pulls exisĕng policy levers. The
results of this fine‐tuning are awaited.
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Limited tax changes
Tax cuts may be a while away
Ministerial statement
"When it is affordable, and when economic condiĕons permit, the Government would like to lower
income taxes with a focus on lower and middle income earners who have faced fiscal drag as their
incomes conĕnue to rise.
However, reducing debt is currently a higher priority than reducing revenue.
The Government is also cauĕous given the wide band of uncertainty around economic and fiscal
forecasts. The new operaĕng allowances mean there isn’t an explicit provision for tax cuts in the
forecasts, but the Government will conĕnue to consider opĕons around lowering tax rates and
thresholds – either in Budget 2017 or a├er — if the fiscal situaĕon improves further."
Editorial comment
On the face of it, the Government’s books are in surplus and those surpluses are forecast to conĕnue
growing between now and 2020, potenĕally funding the promised tax cut. However, forecast surpluses
for both the 2016 and 2017 years are a rather modest $700m. This would not seem to give the
Government anywhere near the headroom it would need over the next few years to fund the $3 billion
tax cut Prime Minister John Key has said he would like to see. Even out to 2020, surpluses are currently
fully commiĥed to paying down debt. If there are going to be tax cuts, something’s got to give.
SMEs tax simplification
Ministerial statement
"Further support for businesses — parĕcularly small enterprises — comes through a $187 million SME‐
friendly tax package, which the Prime Minister announced last month.
This provides a beĥer balance of incenĕves to encourage taxpayers to pay the right amount of tax.
Provisional tax will be reformed, with a new pay‐as‐you‐go opĕon allowing small businesses to pay tax
as they earn income.
Use‐of‐money interest will be eliminated or reduced for the vast majority of taxpayers.
Contractors will be able to choose a withholding tax rate that suits their own circumstances.
And the ongoing 1 per cent monthly late‐payment penalty will be scrapped from 1 April 2017 for new
debt — although immediate penalĕes and interest charges will conĕnue."
Editorial comment
These announcements are not new and simply repeat Prime Minister John Key's earlier statements in
his pre‐Budget speech to Business New Zealand launching the Making Tax Simpler: Beĥer Business Taxhis pre‐Budget speech to Business New Zealand launching the Making Tax Simpler: Beĥer Business Tax
iniĕaĕve as part of the wider Business Transformaĕon programme.
The proposals are mainly designed to reduce SMEs' disproporĕonate compliance costs and include the
following (as already covered in the April 2016 Making Tax Simpler issues paper).
Changes to provisional tax
Increasing the current $50,000 residual income tax ”safe harbour” limit for use of money
interest (UOMI) to $60,000 and extending this safe harbour to all taxpayers.
Removing UOMI interest for the first two provisional tax payments for all taxpayers who use the
upli├ method.
Allowing businesses with turnover under $5m to use an accounĕng income basis (AIM) to pay
provisional tax on a pay‐as‐you‐go basis through their accounĕng so├ware with monthly or
two‐monthly payments linked to the GST return periods (effecĕve from 1 April 2018).
Allowing companies to pay tax on behalf of shareholders (effecĕve from 1 April 2018).
Changes to withholding tax
Allowing contractors to elect their own withholding rate without applying to Inland Revenue
(subject to eligibility limits and a minimum rate of 10% for resident contractors and 15% for
non‐resident contractors).
Extending withholding tax to labour‐hire firms.
Permiħng voluntary withholding agreements.
Changes to late payment penal쀀뀄es
No longer imposing incremental late payment penalĕes (LPP) on future GST, provisional tax,
income tax and Working for Families Tax Credits debt.
The reducĕon of taxpayers' exposure to UOMI and LPP, represenĕng a valuable step towards a beĥer
designed payment system, has been well received, but the view is that the Government could have
gone further. The extent of business demand for changes to withholding tax and other previously
announced measures is uncertain.
The Making Tax Simpler: Be阀ꬄer Business Tax issues paper notes that provisional tax is a source of stress
because of the uncertainty and unpredictability of income, with the UOMI and penalty rules imposing
further stress. Businesses following provisional tax rules as set out in statute have been hit unfairly
with high UOMI charges. Proposals for extension of the safe harbour amount and its use by non‐
individuals, together with imposing UOMI charges only from the third instalment where the provisional
tax upli├ method is used, are welcome, parĕcularly for small businesses with seasonal or volaĕle
income‐earning paĥerns.
AIM is technologically revoluĕonary, with payments generated by accounĕng so├ware and authorised
by the user. The technology does not yet exist and Inland Revenue will need to work with so├ware
providers, hence the longer lead ĕme. Some small businesses may appreciate AIM, but it will put
pressure on the accuracy of informaĕon within accounĕng systems. Cashflow implicaĕons of
monthly/two‐monthly tax payments may be challenging. The Government clearly favours greater use
of withholding taxes as part of Inland Revenue’s business transformaĕon, with the proposed reforms
being only the start.
The above changes will apply from 1 April 2017 (unless otherwise stated) with feedback on the April
2016 issues paper required by 30 May 2016. This package is expected to cost $187m over the next four
years.
Business transformation
Ministerial statement
"The tax changes previously announced are part of a wider business transformaĕon programme that
embraces new technology to make it easier and less complicated to pay tax.The Budget includes $857 million for Inland Revenue’s new tax administraĕon system, replacing one that is a quarter of a century old." Editorial comment Business Transformaĕon aims to make it easier for every New Zealander to meet their tax obligaĕons, including giving taxpayers greater ability to manage their tax affairs online, and gives more certainty that they will receive their enĕtlements. Revenue Minister Hon Michael Woodhouse has secured a net $857m to deliver a modern tax system over the next four years. Over the period to 2020, Budget 2016 will invest $503m of new operaĕng funding and $354m of new capital funding for Inland Revenue's new tax administraĕon system. As Woodhouse says, "It is important that our tax system keeps pace with changes in New Zealanders' expectaĕons and changing business models." Efficient running of our tax system isn't sexy. No one ever won a popularity poll on making it easier to pay out money, but a great tax system does maĥer for our economy. Updaĕng our approach for the digital age is the right call. Woodhouse aims for small business to be able to devote more ĕme to business rather than tax. "Businesses will find that meeĕng tax obligaĕons will become part of their normal processes, rather than a separate acĕvity." What Wooodhouse chooses not to emphasise is the extent to which Business Transformaĕon depends on finding savings from Inland Revenue today. As well the $857m addiĕonal funding, Inland Revenue's exisĕng budget will be cut by $284m by 2020. That saving will be recycled back into Business Transformaĕon. That means the shape of the exisĕng department isn't yet clear. Our take is that it will mean cuts in staffing. Less need for document processing centres, increased digital and automated compliance mean fewer overdue debt collectors, fewer auditors and reduced corporate overheads. Inland Revenue will look very different in five years' ĕme. It would be a mistake to ignore the main purpose of the tax system: to raise money. The Government expects $280m extra tax through beĥer compliance as a result of Business Transformaĕon, with that revenue kicking in from 2019. International tax Ministerial statement "The Government remains commiĥed to ensuring that everyone pays their share of tax according to the rules. We have a strong tax system in New Zealand and we are making further changes targeted at mulĕ‐ naĕonal companies. New Zealand recently signed an internaĕonal agreement that will make it harder for mulĕ‐naĕonals to arĕficially lower their tax liabiliĕes. We will soon introduce legislaĕon to increase the amount of tax compliance informaĕon shared between our treaty partners. We have commissioned an independent review of the disclosure requirements for foreign trusts, which is due by 30 June. And we will conĕnue to work with the OECD to address tax avoidance. These changes will help ensure that our tax base and disclosure rules remain robust into the future”. Editorial comment
Editorial comment
No changes have been announced today, but we have been warned. Bill English sets out his posiĕon in
stark terms: " ... we are making further changes targeted at mulĕnaĕonal companies". He has not
specified what these changes will be but it's clear that informaĕon exchange is high on the priority list
following the Government's recent signing of the OECD mulĕlateral competent authority agreement to
apply a common reporĕng standard along with other tax authoriĕes.
We were concerned that we’d see a rushed reacĕon. Taking a careful look at our internaĕonal tax
seħng is the right approach for New Zealand.
GST and NRWT revenue expected
Editorial comment
The Budget papers detail projected revenues from the proposed legislaĕve reforms concerning GST on
cross‐border services and intangibles, and NRWT: related party and branch lending, of $115m and
$116m respecĕvely over the next four years (although kicking in from 2017).
To recap earlier tax developments, services and other intangibles provided to New Zealand residents
by offshore suppliers, such as purchases of music from offshore websites, will be subject to GST from 1
October 2016.
The NRWT reform package suggests tax policy changes to strengthen the NRWT and approved issuer
levy rules helping to ensure that domesĕc borrowers and foreign lenders are taxed at a reasonable
level.
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Tourism
Ministerial statement
"The tourism sector is experiencing rapid growth and Budget 2016 provides a $45 million package of
support over four years.
This includes a new $12 million fund to help communiĕes with smaller‐scale infrastructure projects,
like restrooms and carparks, to deal with growing numbers of tourists.
Tourism New Zealand will receive $8 million to target key growth markets and increase the record
number of tourists arriving here.
$25 million is being provided to upgrade and extend the New Zealand Cycle Trail and ensure it
conĕnues to offer a world‐class visitor experience. And we are also starĕng a two‐year trial to
streamline border processing for low‐risk travellers to make it easier for them to visit New Zealand."
Editorial comment
The Budget papers forecast real GDP growth of around 2.9% for the 2017 financial year followed by
2.8% on average over the five years to the June 2020 year. Tourism is said to be one of the supporĕng
drivers of the two key factors giving rise to this economic growth — consumer spending and services
exports. To reinforce the supporĕng role of tourism, Budget 2016 provides for some addiĕonal
government spending on the sector.
The $12m to be spent on tourism faciliĕes comprises $3m over each of the four years starĕng with the
2016/17 financial year.
The $8m allocated to Tourism New Zealand is intended to help decrease market concentraĕon,
increase regional dispersal and contribute to beĥer off‐peak demand.
The cycle trail spending is to be in the form of the disbursement of $6m, $7m, $6m and $6m over the
four years starĕng with the 2016/17 financial year. The $8m allocated to Tourism New Zealand is $2mfour years starĕng with the 2016/17 financial year. The $8m allocated to Tourism New Zealand is $2m
per annum allocated over the same four‐year period.
The Budget papers signal some addiĕonal tourism‐related measures. The Customs Service is allocated
$28.7m over four years as funding for a pilot of new processes for trusted travellers and traders at the
border, increased sampling across Customs' border acĕviĕes for risk‐targeĕng purposes and to support
the implementaĕon of changes to the current Customs and Excise Act. The Customs Service is also
allocated $18.8m over four years for addiĕonal personnel costs expected to be incurred in support of
the upcoming changes.
On a gloomier note some $4.7m is allocated to marking passports for travel restricĕon. This measure
follows the escape of Phillip John Smith/Traynor. Some 24,000 passports per year are expected to be
marked for travel restricĕon. This should result in more robust control at the border for unauthorised
overseas travel by offenders.
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ETS subsidy removal
Ministerial statement
“The Government will phase out a subsidy in the Emissions Trading Scheme that was introduced as a
temporary measure during the global financial crisis.
This has allowed some businesses to pay one emissions unit for every two tonnes of polluĕon they
emit.
We believe it is ĕme businesses move towards paying the market price for their emissions.
Removing the subsidy will posiĕvely impact the operaĕng balance by $356 million over the next four
years, based on a New Zealand Unit price of $12.”
Editorial comment
Following removal of the Emissions Trading Scheme (ETS) subsidy, the Budget papers project annual
increases in Crown revenue of $253m, $73.5m, $117.3m and $139.8m for the four years starĕng with
the 2016/17 financial year.
Terminaĕon of the subsidy is scheduled to commence on 1 January 2017. The measure will increase
unit surrenders to the Government by non‐forestry ETS parĕcipants.
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Housing
Ministerial statement
"As well as invesĕng in infrastructure, the Budget also includes funding to free up more land and
increase housing supply in Auckland.
Housing development on surplus Crown land in Auckland receives a $100 million boost in capital
funding.
This follows the $52 million set aside in Budget 2015 that has so far resulted in agreements for 20
parcels of land.
The Government’s longstanding view is that obstacles to the supply of land and housing are the main
issues facing the housing market.
It is essenĕal these obstacles are removed.
As well as our work on reforming the Resource Management Act, the Government will soon issue aAs well as our work on reforming the Resource Management Act, the Government will soon issue a
Naĕonal Policy Statement on Urban Development.
This will direct councils to allow more housing development where necessary and to measure the
impact of their decisions on house prices.
Mr Speaker,
The Budget includes significant extra funding to ensure more people in need have access to social
housing.
$200 million is provided over four years for at least 750 more places for those with the most pressing
housing needs, and to meet the rising cost of social housing rents.
Another $41 million will support around 3,000 emergency housing places a year and establish a new
emergency housing Special Needs Grant.
This is part of the Government’s wide‐ranging reforms focused on ensuring that New Zealanders in
need have access to appropriate housing."
Editorial comment
Housing receives some low‐level aĥenĕon in Budget 2016. The most significant comment perhaps is
that the Government intends to publish a Naĕonal Policy Statement on Urban Development that will
outline reforms of the Resource Management Act. No publicaĕon date is given by the Budget papers.
The $200m boost to the income‐related rent subsidy menĕoned by the Minister not only helps cover
increased rents for social housing tenants but also covers costs related to the redevelopment of social
housing places in Tamaki, Auckland. The $41m for emergency housing grants announced by the
Minister is to pay for emergency housing in areas of high demand. The funding will also establish an
emergency housing special needs grant for emergency housing purposes.
Some addiĕonal funding is allocated to invesĕgaĕng ownership of public housing stock. $3.8m of
funding is allocated for the invesĕgaĕon of opportuniĕes to redevelop Housing New Zealand
Corporaĕon land in Auckland. Funding will also be provided to support the transfer of social housing
stock to community housing providers. $18m is allocated for the insulaĕon of homes occupied by low‐
income families.
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Health
Ministerial statement
"Budget 2016 contains a significant increase in funding for core public services that New Zealanders
rely on every day.
This extra investment comes with a clear expectaĕon that public agencies must strengthen their focus
on delivering beĥer results."
Editorial comment
The Budget papers set out an extensive list of health programmes that will be supported by Budget
2016. The list includes:
Ambulance services: $3.7m annual increase
Disability support services: $42.2m annual increase
District health boards: $400m annual increase to meet the increasing cost of health services
provided by district health boards
Elecĕve surgery: $24m annual increase to help meet elecĕve surgery targets in light of expected
populaĕon growth
Health workforce training: $2.6m annual boost for the general pracĕĕoner educaĕonHealth workforce training: $2.6m annual boost for the general pracĕĕoner educaĕon
programme, the voluntary bonding scheme and the nurse entry to pracĕce programme
Alcohol and drug support for pregnant women: $3m annual increase
Mental health early response: $3m annual increase
Bowel screening: $11.9m annual increase
Publicly funded medicines: $124m over four years added to Pharmac's budget
Gambling harm: $7m annual increase
Mental health services in Canterbury: $64m annual increase
Accident Compensaĕon Corporaĕon: $26.4m in 2016/17 for the rehabilitaĕon costs of persons
not in paid employment (leading to a total of $1.23 billion assistance for non‐earners for
2016/17)
Health Research Council: $10m in 2016/17 to boost health research undertaken in New
Zealand.
Although not a health measure in the strict sense, Budget 2016 allocates further funding to assist with
the safety of Ministry of Social Development employees. Some $22.5m is expected to be incurred over
the next four years to implement the Ministry’s security response programme.
Proposed measures include mobile duress alarms for staff and controlled access through the security
guard funcĕon at Ministry offices aĥended by the public. Changes to the Health and Safety at Work Act
2015 are said to have led to these measures.
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Tobacco excise duty
Ministerial statement
"The Budget confirms that tobacco excise duty will rise by 10 per cent on 1 January each year for the
next four years."
Editorial comment
The increase in tobacco excise duty aims to reduce smoking prevalence on the way to the goal of
making New Zealand essenĕally "smokefree" by 2025. The increase in the levy will be accompanied by
the exclusion of tobacco from the consumers price index adjustments to welfare payments. The
changes are projected to raise $5m in 2016/17, increasing to $280m by 2020/21.
On Budget night the Customs and Excise (Tobacco Products—Budget Measures) Amendment Bill was
introduced to implement the increase in the tobacco excise levy.
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Education
Ministerial statement
"The Government will invest a total of $11 billion in early childhood, primary and secondary educaĕon
in 2016/17. Together, these sectors will receive an extra $1.4 billion over this year and the next four
years.
$397 million of this will meet growing demand for early childhood educaĕon and provide places for a
further 14,000 children.
Addiĕonal funding is directed at students most in need of assistance.
Instead of an across‐the‐board increase in operaĕons grants, schools will receive $43 million over four
years to target students most at risk of under‐achieving.In addiĕon, $42 million will be provided for students with high and special educaĕonal needs.
As I menĕoned previously, the Budget provides $883 million for new school property.
It also includes funding for around seven new Partnership Schools in 2018 and 2019."
Editorial comment
The Budget papers project addiĕonal spending of $447.5m over the next four years on early childhood
educaĕon. The spending will help meet depreciaĕon of the school property porĔolio and meet
increases in student rolls.
The Budget also allocates $42.9m over four years to support state and state‐integrated schools,
providing for children most at risk of not achieving.
The Marsden Fund that provides grants for invesĕgator‐iniĕated research is to receive an addiĕonal
$66m over four years.
On a happier note, Budget 2016 allocates addiĕonal funding for the New Zealand Symphony Orchestra
and the Royal New Zealand Ballet. The New Zealand Symphony Orchestra is to receives $4.8m over
four years and the Royal New Zealand Ballet $4m over the same period. Some $250,000 is allocated to
invesĕgate the feasibility of building a Pacific Cultural Centre in Auckland.
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Christchurch regeneration
Ministerial statement
"Since the first Christchurch earthquake in September 2010, the Government has backed Cantabrians
in the iniĕal response, and now in the recovery and regeneraĕon of the region. ...
Taxpayers' financial commitment to the Christchurch regeneraĕon now stands at more than $17 billion
– around $700 million more than signalled in the last Budget. ...
Almost 100,000 cash seĥlements have been made by EQC, which has also resolved more than 60,000
land claims. Around 68,000 homes have been repaired in the Canterbury Home Repair Programme.
In Christchurch's central business district, 97 per cent of the horizontal infrastructure repairs have been
completed.
Overall, $3.9 billion of public sector projects are completed or are under construcĕon, with almost
$800 million more forecast to begin in the next six months.
Three anchor projects have been completed in Christchurch — the Hagley Park cricket oval, the bus
interchange and the Margaret Mahy family playground.
Work is progressing on the Metro Sports Facility and the Convenĕon Centre.
The recovery phase in Christchurch formally came to an end last month, with the expiry of the
Canterbury Earthquake Recovery Act.
The Government will now progressively step back from its leadership role in Christchurch.
Local organisaĕons have been set up to deliver on the Government’s ongoing commitment to the city
and the wider region.
This new regeneraĕon phase is not just about rebuilding Christchurch, but also fulfilling the long‐held
potenĕal of New Zealand’s second largest city."
Editorial commentEditorial comment
Budget 2016 provides $40.7m of addiĕonal funding over the next four years (with total anĕcipated 10‐
year capital expenditure of $127.8m) for the Christchurch Schools Rebuild. This funding contributes to
the $1.137 billion Christchurch Schools Rebuild programme as agreed to by Cabinet in 2013. This
programme will construct 13 new schools, rebuild 10 schools on exisĕng sites, fully develop 34 schools
and partly develop 58 schools over the next 10 years.
An addiĕonal $6m is allocated for 2017 to establish a fund allowing the 34 state‐integrated schools in
greater Christchurch to apply for earthquake strengthening of their buildings.
Total funding of $60.7m is forecast for 2017 and 2018 to cover the first two years of operaĕng costs of
the mulĕ‐agency Christchurch Jusĕce and Emergency Service Precinct ($300m anchor project led by
the Ministry of Jusĕce). The Christchurch Jusĕce and Emergency Services Precinct will bring together
all jusĕce and emergency services in one purpose‐built, leading‐edge precinct in central Christchurch.
Construcĕon of the precinct commenced in July 2014, with the delivery of all precinct buildings
expected in early 2017.
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New Zealand Super Fund
Editorial comment
The Budget papers project a return to contribuĕons to the New Zealand Superannuaĕon Fund starĕng
in the 2020/21 financial year. That is on the basis that, by that ĕme, net debt of the Crown is expected
to be less than 20% of GDP. The comment is added that reduced debt levels for the Government are
just as important as assets accumulated by the New Zealand Superannuaĕon Fund.
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Other announcements
Editorial comment
The Budget papers contain a number of miscellaneous announcements of some interest. Topics
covered include:
Enhanced internet access to government websites: $12.7m is allocated over four years.
Free trade agreement implementaĕon: the Ministry of Foreign Affairs and Trade is allocated
$4.6m to help exporters access the benefits of free trade agreements, including the Trans‐
Pacific Partnership.
Enforcing consumer law: $15m is allocated to the Commerce Commission over four years to
administer recent changes to consumer laws and monitor increasingly complex anĕ‐
compeĕĕon pracĕces.
Government Centre for Dispute Resoluĕon: $6.1m is allocated for the establishment of a
permanent Government Centre for Dispute Resoluĕon to cover all government dispute
resoluĕon regimes.
Legal aid: $74.3m is allocated over four years for increases to criminal legal aid.
Unallocated conĕngencies: $778.8m over four years is set aside for unexpected conĕngencies
such as increases in wage costs.
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