Treasury has acknowledged the Government may have a problem with schools plagued with "leaky building" woes.
Treasury's Half Yearly Economic and Fiscal Update released today includes new listings of the financial risks the Government faces and these include school property woes.
"As in other areas of the building sector, the school property portfolio has a portion of the building stock built between 1995 and 2005 which is subject to the `leaky buildings' (defective building) issues as a result of poor design, inappropriate materials, poor workmanship and deficient building project oversight," Treasury said.
The risk is listed as unquantified in financial terms though a number of schools have been highlighted in the media as having extensive building problems.
The fiscal update also says there are more pressures on the school building portfolio.
The 2009 budget put aside $434 million in capital funding for school property and Treasury said the Government was considering lifting this to $500 million.
However, the Education Ministry had advised an additional $168 million could be needed in the next two financial years to meet roll growth and demographic change.
"In addition, the ministry also advises that the annual property portfolio may increase the depreciation and therefore require funding. The Government is also committed to increasing the range of schools that parents can chose to send their children to, which could potentially increase the level of property funding required," Treasury said.
Putting broadband in schools could also cost up $235 million, while the Government had only committed $34 million and signalled spending of $150 million.
Treasury also said that the Government had historically increased school operating grants in each budget.
"Any funding for school operations grants would depend on the circumstances and the ability of the proposal to be funded within existing baselines," Treasury said.
Other new risks facing the Government included in the latest update included:
* A $34 million shortfall in the Large Budget Screen Production Fund.
* an unquantified amount in sorting out "warranty issues" over the defence forces Project Protector vessels.
* a request from NZ Post for the Government to fund "business expansion".
* costs of Family Court professional services rising by $23 million.
