Fiscal Sensitivities
Table 3.1 provides some “rules of thumb” on the sensitivities of the fiscal position to changes in specific variables.
| Year ending 30 June ($ million) |
|||||
|---|---|---|---|---|---|
| 2008 Forecast | 2009 Forecast | 2010 Forecast | 2011 Forecast | 2012 Forecast | |
| 1% lower nominal GDP growth per annum | |||||
| Revenue | (550) | (1,100) | (1,725) | (2,365) | (3,055) |
| Addition to financing costs | 17 | 68 | 152 | 271 | 425 |
| Impact on the operating balance | (567) | (1167) | (1878) | (2636) | (3480) |
| Revenue impact of a 1% decrease in the growth rates of: | |||||
| Wages and salaries | (245) | (490) | (765) | (1,045) | 1,355) |
| Taxable business profits | (125) | (265) | (420) | (590) | (770) |
| One percentage point lower interest rates | |||||
| Interest income | (41) | (89) | (57) | (70) | (49) |
| Expenses | (21) | 88) | (130) | (167) | (201) |
| Impact on the operating balance | (20) | (0) | 72 | 97 | 152 |
The forecasts of capital contributions to the New Zealand Superannuation (NZS) Fund are sensitive to the rate of return assumed on the Fund's assets.
| Variable | Marginal change | Effect on net return after tax | Effect on Capital Contribution ($ million) |
|||
|---|---|---|---|---|---|---|
| (%age points) | (%age points) | 2008/09 | 2009/10 | 2010/11 | 2011/12 | |
| Expected gross rate of return | -1 | -0.76 | 220 | 230 | 243 | 256 |
