Taxpayers face $25 million bill even if old flag stays

Picture of the current New Zealand flag.

Changing New Zealand's flag is likely to cost the taxpayer $30 million or more, with Finance Minister Bill English acknowledging he doesn't know what the final total will be.

Just the buildup to the votes on the flag - and the referendums themselves - will cost $25.7 million.

Prime Minister John Key and Mr English yesterday confirmed details of the two-year process to select a potential successor to the current 112-year-old design.

Mr English will steer the process but a group of "respected New Zealanders" will be chosen to lead public debate on designs and come up with three or four that will be put to a binding referendum late next year to select a preferred design.

A second referendum in April 2016 will be held to choose between the preferred design and the existing flag.

The publicity blitz around selecting the new designs, which begins on Anzac Day next year, will cost $6.7 million, while the two referendums will cost $17.3 million. Other costs will take the overall bill to $25.7 million whether the flag is changed or not.

However, a regulatory impact statement released yesterday estimates additional costs of up to $2.66 million to replace flags and Defence Force uniforms if the flag is changed.

Other costs, including changing flags on government ships and on drivers' licences, were unknown.

Mr Key said it wasn't possible to have a "serious process" around changing the flag without spending money on two referendums.

"In the end you have to say, what price do you put on democracy where people can genuinely have their say on a matter that is actually important? Yes, it's a one-off cost, but my view would be that if the flag doesn't change as a result of this referendum process, then it won't be changing for a good 50 to 100 years, so this is a cost we have to bear."

Agencies which have the existing flag in their ensigns would not be obliged to alter them automatically.

Timetable for decision on ensign
November 2014: MPs from across Parliament to be appointed to NZ Flag Cross Party MPs Group (CPG).
December: MPs' group to nominate "respected New Zealanders" to serve on NZ Flag Consideration Panel (FCP).
January 2015: CPG to consider draft bill allowing for two binding referendums on new flag.
February: Cabinet to appoint FCP.
March: Referendum legislation to be approved and FCP to plan "public engagement campaign" or publicity blitz on alternative flag designs.
May: Public engagement campaign to be launched.
August: FCP to report to Cabinet with shortlist of new designs.
November 20-December 11: Postal referendum to be held to select preferred alternative design.
April 1-22: Second postal referendum to be held to choose between preferred alternative and existing flag.
April 26: Final result to be declared.
May onwards: New design to be implemented - if New Zealanders choose it.