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Budget 2015 Home Page Budget Economic and Fiscal Update 2015

Net Core Crown Debt

Net core Crown debt peaks as a share of GDP in 2014/15...

Net core Crown debt as a share of nominal GDP is forecast to peak at 26.3% in 2015/16 (Figure 2.13) before reducing to 22.9% by 2018/19, consistent with the Government's long-term fiscal objectives of net core Crown debt at a level no higher than 20.0% of GDP by 2020.

Figure 2.13 - Net core Crown debt
Figure 2.13 - Net core Crown debt.
Source: The Treasury

As residual cash returns to surplus, nominal net core Crown debt begins to reduce in 2018/19, to stand at $65.5 billion.

...while gross debt begins to decline after 2016/17...

Gross debt is expected to peak at $93.6 billion in 2016/17 after which forecast maturities are expected to exceed new debt being issued, so gross debt begins to decline. Gross debt is forecast to be $83.7 billion in 2018/19 which is equivalent to 29.3% of nominal GDP.

Figure 2.14 - Gross debt
Figure 2.14 - Gross debt.
Source: The Treasury

The bond programme is expected to raise funds of $36.5 billion over the forecast period, while $34.8 billion of existing debt will be repaid, providing net cash proceeds of $1.7 billion (Table 2.11). Any excess cash proceeds raised from the bond programme will be invested in financial assets and used to meet future debt maturities.

The total bond programme is broadly in line with total repayment of market bonds over the forecast period. The issuance profile is relatively flat in order to reduce year-to-year volatility of bond programmes and ensure consistency of supply over this time.

Table 2.11 - Net increase in government bonds
Year ending 30 June
Face value of government bonds issued (market) 8.0 8.0 7.0 7.0 7.0 37.0

Cash proceeds from government bond issue

Cash proceeds from issue of market bonds 8.2 8.5 6.9 6.5 6.4 36.5
Repayment of market bonds (8.7) (1.8) - (11.3) (11.5) (33.3)
Net proceeds from market bonds (0.5) 6.7 6.9 (4.8) (5.1) 3.2  
Repayment of non-market bonds (1.2) (0.3) (1.5)
Net repayment of non-market bonds (1.2) (0.3) (1.5)
Net cash proceeds from bond issuance (1.7 ) 6.4 6.9 (4.8) (5.1) 1.7

Source: The Treasury

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