The Port Waikato by-election is expected to cost just under $2 million, requiring additional funding for the Electoral Commission to save it from "significant financial risk".
The November 25 by-election has been triggered by the death ACT's candidate in the electorate, Neil Christensen, ahead of the general election.
According to a new Cabinet paper from the Minister of Justice, the by-election is estimated to cost the Electoral Commission about $1.968 million. The two most recent by-elections cost $1.337 million (Hamilton West) and $1.256 million (Tauranga).
"In delivering these, the Electoral Commission was able to absorb some personnel costs and information technology infrastructure costs through reprioritisation of internal resources," the paper said.
"Due to the proximity of the Port Waikato by-election to delivery of the General Election, the Commission is unable to reallocate resource to absorb these costs in the delivery of the Port Waikato by-election. As such, additional personnel – including additional IT vendor support to stand up the necessary systems – is required. As well as the need for additional staff, wage increases have contributed to higher anticipated personnel costs."
It said the higher cost of the Port Waikato by-election was due to "higher personnel and IT costs, inflationary pressures, increased security needs, a greater number of voting places, higher lease and operational costs due to the rural nature of Port Waikato".
There would also need to be "increased public information costs to educate the public on the facts and integrity of the by-election process".
The Electoral Commission could absorb up to $378,000 of the costs from its baseline funding, meaning $1.59 million was sought in additional funding.
The Electoral Commission previously forecast an annual deficit of $11.3 million for 2023/24.
"Due to inflationary and risk-based cost pressures, the Electoral Commission is now forecasting a deficit of $14.153 million, which will reduce reserves to approximately $2.200 million by 30 June 2024. However, General Election delivery costs are still to be finalised, and the Electoral Commission has no contingency to manage any additional unexpected events."
The Cabinet paper said: "If additional funding is not provided and the costs of a by-election are required to be met from within electoral baselines, it is uncertain whether the Electoral Commission will have sufficient reserves to cover this, which will place the Electoral Commission in a position of significant financial risk."
The minister said the Electoral Commission should be enabled to proceed with its plans with certainty of funding.
"However, to manage the inherent uncertainty of the costings, I propose that the additional funding be provided on the understanding that the Electoral Commission reviews actual costs incurred after the by-election, and any unused additional funding be returned to the Crown."
"I propose that the recovery of any underspend be arranged by the Electoral Commission returning the excess funding, or through utilising the provisions of section 165 of the Crown Entities Act 2004. Section 165 requires consultation between a Crown entity, its responsible Minister, and the Minister of Finance before a request to return a net surplus is made to a Crown entity. Regardless of which recovery route is used, I will seek assurance and monitoring from the Ministry of Justice over the disbursement of any additional funding to the Electoral Commission, to enable the return of any net surplus funding, if required."
Cabinet agreed to the additional funding.
The National Party was consulted given Labour's caretaker Government status. National is likely to lead the next Government. New Zealand is now waiting on the official results to see if it will be able to govern with just the support of ACT, or need New Zealand First as well.
The by-election will lead to Parliament having an additional seat. Currently, there is a one-seat overhang on preliminary results, meaning Parliament could have 122 seats after the by-election, depending on the final election results.
