Fiscal Outlook
Overview
| Year ended 30 June |
2011 Actual |
2012 Forecast |
2013 Forecast |
2014 Forecast |
2015 Forecast |
2016 Forecast |
|---|---|---|---|---|---|---|
$billions |
||||||
| Core Crown tax revenue | 51.6 | 54.7 | 58.2 | 63.1 | 67.2 | 71.2 |
| Core Crown expenses | 70.5 | 69.6 | 73.7 | 72.9 | 74.9 | 77.3 |
| Total Crown OBEGALa | -18.4 | -8.4 | -7.9 | -2.0 | 0.2 | 2.1 |
| Total Crown OBEGAL (excluding earthquake expenses) | -9.3 | -7.1 | -5.9 | -1.7 | 0.4 | 2.2 |
| Total Crown operating balance | -13.4 | -10.6 | -5.7 | 0.4 | 2.7 | 4.8 |
| Core Crown residual cash | -13.3 | -12.1 | -9.7 | -5.2 | -3.7 | -1.2 |
| Net debtb | 40.1 | 51.9 | 61.3 | 66.5 | 69.8 | 70.7 |
| Gross debtc | 72.4 | 80.1 | 80.0 | 88.1 | 84.2 | 84.8 |
| Net worth attributable to the Crown | 80.6 | 70.0 | 64.6 | 65.2 | 68.1 | 73.2 |
% of GDP |
||||||
| Core Crown tax revenue | 25.7% | 26.3% | 26.7% | 27.2% | 27.5% | 27.8% |
| Core Crown expenses | 35.2% | 33.5% | 33.8% | 31.5% | 30.7% | 30.2% |
| Total Crown OBEGALa | -9.2% | -4.1% | -3.6% | -0.9% | 0.1% | 0.8% |
| Total Crown OBEGAL (excluding earthquake expenses) | -4.6% | -3.4% | -2.7% | -0.8% | 0.1% | 0.9% |
| Total Crown operating balance | -6.7% | -5.1% | -2.6% | 0.2% | 1.1% | 1.9% |
| Core Crown residual cash | -6.7% | -5.8% | -4.4% | -2.2% | -1.5% | -0.5% |
| Net debtb | 20.0% | 25.0% | 28.1% | 28.7% | 28.6% | 27.7% |
| Gross debtc | 36.2% | 38.5% | 36.7% | 38.0% | 34.5% | 33.2% |
| Net worth attributable to the Crown | 40.2% | 33.7% | 29.6% | 28.1% | 27.9% | 28.6% |
Notes:
- Operating balance before gains and losses
- Net core Crown debt excluding the New Zealand Superannuation Fund and advances
- Gross sovereign-issued debt excluding Reserve Bank bills and settlement cash
A glossary and longer time series for these indicators are provided on pages 126 and 131 respectively.
Source: The Treasury
Budget 2012 forecasts narrowing operating deficits over the next three years before the Crown returns to surplus in the 2014/15 fiscal year.
This strengthening fiscal outlook is underpinned by higher revenues together with restrained growth in discretionary spending.
While the nominal value of core Crown expenses is expected to increase across the four-year forecast period, growth in spending is anticipated to be modest, so that expenses will decline as a share of GDP from 35% of GDP in 2010/11 to 30% of GDP in 2015/16.
Over the next four years, the core Crown is expected to spend around $18 billion on capital items such as the purchase of physical assets and advancing student loans. Net debt is expected to peak at 28.7% of GDP in 2013/14, fall to 27.7% of GDP in 2015/16 and continue to ease throughout the projection period[4] ending 2025/26.
Total Crown assets are forecast to grow by $18.9 billion over the next five years, from $245.2 billion to $264.1 billion. This five-year growth figure is roughly half that forecast in Budget 2011, reflecting ongoing fiscal restraint and the beginning of an unwinding of financial assets that had been built up in recent years to fund a series of upcoming bond maturities.
|
Year ending 30 June $billions |
2011 Actual |
2012 Forecast |
2013 Forecast |
2014 Forecast |
2015 Forecast |
2016 Forecast |
|---|---|---|---|---|---|---|
| Core Crown revenue | 57.6 | 60.0 | 64.2 | 69.2 | 73.6 | 77.9 |
| Core Crown expenses | (70.5) | (69.6) | (73.7) | (72.9) | (74.9) | (77.3) |
| Net surpluses/(deficits) of SOEs and CEs | (5.5) | 1.2 | 1.6 | 1.7 | 1.5 | 1.5 |
| Total Crown OBEGAL | (18.4) | (8.4) | (7.9) | (2.0) | 0.2 | 2.1 |
| Net retained surpluses of SOEs, CEs and NZS Fund | 6.0 | (1.4) | (1.7) | (1.7) | (1.5) | (1.4) |
| Non-cash items and working capital movements | 3.1 | 1.6 | 2.9 | 1.1 | 1.0 | 1.1 |
| Net core Crown cash flow from operations | (9.3) | (8.2) | (6.7) | (2.6) | (0.3) | 1.8 |
| Net purchase of physical assets | (1.5) | (1.4) | (1.9) | (1.6) | (1.6) | (1.4) |
| Advances and capital injections | (2.5) | (2.4) | (2.4) | (1.9) | (2.5) | (2.2) |
| Forecast for future new capital spending | - | (0.1) | (0.2) | (0.6) | (0.8) | (0.9) |
| Partial share sales | - | - | 1.5 | 1.5 | 1.5 | 1.5 |
| Core Crown residual cash deficit | (13.3) | (12.1) | (9.7) | (5.2) | (3.7) | (1.2) |
| Opening net debt | 26.7 | 40.1 | 51.9 | 61.3 | 66.5 | 69.8 |
| Core Crown residual cash deficit | 13.3 | 12.1 | 9.7 | 5.2 | 3.7 | 1.2 |
| Other valuation changes in financial assets and financial liabilities | 0.1 | (0.3) | (0.3) | - | (0.4) | (0.3) |
| Closing net debt | 40.1 | 51.9 | 61.3 | 66.5 | 69.8 | 70.7 |
| As a percentage of GDP | 20.0% | 25.0% | 28.1% | 28.7% | 28.6% | 27.7% |
Source: The Treasury
Notes
- [4]The projection period is the ten year period from 2016/17 to 2025/26.
