Fiscal Outlook

Key Points

Tax revenue is forecast to grow at twice the rate of core Crown expenses as the economy grows and the Government continues to apply fiscal constraint.
Operating deficits narrow over the next two years and return to surplus in 2014/15.
Net core Crown debt peaks at 29.5% of GDP in 2014/15 and 2015/16.
Operating surpluses begin to rebuild the fiscal buffer against future shocks.

Table 2.1 - Fiscal indicators
Year ended 30 June	2012 Actual	2013 Forecast	2014 Forecast	2015 Forecast	2016 Forecast	2017 Forecast
$billions
Core Crown tax revenue	55.1	57.4	61.9	65.6	68.9	71.9
Core Crown expenses	69.1	72.0	71.8	73.7	75.6	78.0
Total Crown OBEGAL¹	(9.2)	(7.3)	(2.0)	0.1	1.4	2.0
Total Crown OBEGAL (excluding earthquake expenses)	(7.3)	(6.0)	(2.1)	0.2	1.4	2.1
Total Crown operating balance	(14.9)	(3.3)	0.0	2.1	3.6	4.4
Core Crown residual cash	(10.6)	(9.8)	(6.9)	(4.6)	(3.3)	(2.9)
Net core Crown debt²	50.7	60.0	66.7	70.7	73.5	75.9
Gross debt³	79.6	80.2	88.4	86.3	90.1	95.9
Net worth attributable to the Crown	59.3	56.3	56.5	58.8	62.6	67.0
% of GDP
Core Crown tax revenue	26.5	26.6	27.0	27.4	27.7	27.7
Core Crown expenses	33.2	33.3	31.4	30.8	30.3	30.1
Total Crown OBEGAL¹	(4.4)	(3.4)	(0.9)	0.0	0.6	0.8
Total Crown OBEGAL (excluding earthquake expenses)	(3.5)	(2.8)	(0.9)	0.1	0.6	0.8
Total Crown operating balance	(7.2)	(1.5)	0.0	0.9	1.4	1.7
Core Crown residual cash	(5.1)	(4.5)	(3.0)	(1.9)	(1.3)	(1.1)
Net core Crown debt²	24.3	27.8	29.2	29.5	29.5	29.3
Gross debt³	38.2	37.1	38.7	36.0	36.2	37.0
Net worth attributable to the Crown	28.5	26.1	24.7	24.6	25.1	25.9

Notes:

Operating balance before gains and losses
Net core Crown debt excluding the New Zealand Superannuation Fund (NZS Fund) and advances
Gross sovereign-issued debt excluding Reserve Bank bills and settlement cash

A glossary and a longer time series for these indicators are provided on pages 120 and 126 respectively.

Source: The Treasury

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