Net worth declines because of continued operating deficits
Net worth is forecast to fall from $99.5 billion (54.0% of GDP) in the June 2009 year to $82.6 billion (34.8% of GDP) in the June 2014 year. The fall reflects the flow-on impact to assets and liabilities from the operating deficits expected over the forecast period. Although net worth declines, the Government is still expected to increase total assets by around $32 billion over the forecast period. As part of the overall increase in assets, the Government's holding of physical assets is expected to increase by around $13.9 billion. Overall, the Government is expected to buy around $34.2 billion and sell about $0.9 billion of physical assets over the next five years. The value of physical assets is expected to decline owing to depreciation by around $19.9 billion by the June 2014 year. A breakdown of net additions and depreciation by segment is shown in Figures 1.10 and 1.11. Generally, the increase in core Crown and Crown entities' physical assets is funded from either capital injections or operating funding provided from the Crown. The increase in SOEs' physical assets is expected to be driven by utilisation of operating surpluses or by raising debt. In addition, the forecasts set aside around $3.6 billion in funding for future capital investments over the forecast period.
- Figure 1.10 - Net additions of physical assets over 5 years
- Source: The Treasury
- Figure 1.11 - Depreciation of physical assets over 5 years
- Source: The Treasury
