Fiscal Sensitivities
The scenarios above indicate the sensitivity of fiscal aggregates to changes in economic conditions. Table 3.5 provides some “rules of thumb” on the sensitivities of the fiscal position to small changes in specific variables.
| ($million) Year ending 30 June |
2008
Forecast |
2009
Forecast |
2010
Forecast |
2011
Forecast |
2012
Forecast |
|---|---|---|---|---|---|
| 1% lower nominal GDP growth per annum | |||||
| Revenue | (541) | (1,099) | (1,737) | (2,423) | (3,157) |
| Addition to financing costs | 17 | 69 | 164 | 306 | 484 |
| Impact on the operating balance | (559) | (1,168) | (1,901) | (2,729) | (3,641) |
| Revenue impact of a 1% decrease in the growth rates of: | |||||
| Wages and salaries | (245) | (520) | (830) | (1,175) | (1,550) |
| Taxable business profits | (125) | (265) | (425) | (585) | (770) |
| One percentage point lower interest rates | |||||
| Interest income | (88) | (114) | (98) | (123) | (111) |
| Expenses | (62) | (102) | (126) | (155) | (178) |
| Impact on the operating balance | (26) | (12) | 28 | 33 | 67 |
The forecasts of capital contributions to the New Zealand Superannuation (NZS) Fund are sensitive to the rate of return assumed on the Fund’s assets (Table 3.6).
| Variable | Marginal change | Effect on net return after tax | Effect on capital contribution ($million) |
|||
|---|---|---|---|---|---|---|
| (%age points) | (%age points) | 2008/09 | 2009/10 | 2010/11 | 2011/12 | |
| Expected gross rate of return | -1% | -0.76% | 237 | 252 | 268 | 287 |
