Glossary of Terms (continued)
National saving
National disposable income less private and public consumption spending. Income excludes gains and losses on capital. Gross saving includes depreciation.
Net core Crown cash flow from operations
The cash impact of operating results. It is represented by the operating balance (before gains and losses) less retained items (eg, net surplus of SOEs, CEs and NZS Fund net revenue) less non-cash items (eg, depreciation).
Net core Crown debt
Net core Crown debt provides information about the sustainability of the Government's accounts, and is used by some international rating agencies when determining the creditworthiness of a country. It represents gross debt less core Crown financial assets (excluding advances and financial assets held by the NZS Fund). Advances and financial assets held by the NZS Fund are excluded as these assets are less liquid and/or they are made for public policy reasons rather than for the purposes associated with government financing.
Net international investment position (NIIP)
Measures the net value of New Zealand's international assets and liabilities at a point in time.
Net worth
Total assets less total liabilities. The change in net worth in any given forecast year is largely driven by the operating balance and property, plant and equipment revaluations.
Net worth attributable to the Crown
Represents the Crown's share of total assets and liabilities and excludes minority interests' share of those assets and liabilities.
New Zealand equivalents to International Financial Reporting Standards (NZ IFRS)
The reporting and measurement framework under which these forecast financial statements are prepared. These standards are approved by the External Reporting Board in New Zealand, based on requirements of the international financial reporting standards issued by the International Accounting Standards Board, adjusted where appropriate for entities that are not profit oriented.
Operating balance
Represents OBEGAL (refer below) plus gains and losses. The operating balance includes gains and losses not reported directly as a movement against net worth. The impact of gains and losses on the operating balance can be subject to short-term market volatility and revaluations of long-term liabilities.
Operating balance before gains and losses (OBEGAL)
Represents total Crown revenue less total Crown expenses. OBEGAL can provide a more useful measure of underlying stewardship than the operating balance as short-term market fluctuations are not included in the calculation.
Output gap
The difference between actual and potential GDP. Potential GDP is the level of output an economy can sustain without acceleration of inflation.
Outputs
Outputs are the goods and services commissioned by Ministers from public, non-governmental and private sector producers. Outputs may include the supply of policy advice, enforcement of regulations (such as speed limits in transport), provision of a range of services (in health, education, etc), negotiation and management of contracts and administration of benefits.
Productivity
The amount of output (eg, GDP) per unit of input.
Projections
Projections relate to the period beyond the five-year forecast period and are based on long-run economic and fiscal assumptions. For example, the projections assume no economic cycle and constant long-run interest, inflation and unemployment rates.
Residual cash
The level of money the Government has available to repay debt or, alternatively, needs to borrow in any given year. Residual cash is alternatively termed “Cash available/(shortfall to be funded)”.
Residual cash is equal to net core Crown cash flow from operations excluding NZS Fund activity less core Crown capital payments (eg, purchase of assets, loans to others).
Settlement cash
This is the amount of money deposited with the Reserve Bank by registered banks. It is a liquidity mechanism used to settle wholesale obligations between registered banks and provides the basis for settling most of the retail banking transactions that occur every working day between businesses and individuals.
Social portfolio
Consists of the assets and liabilities held primarily to provide public services or to protect assets for future generations.
Specific fiscal risks
All government decisions or other circumstances known to the Government which may have a material impact on the fiscal and economic outlook, but are not included in the fiscal forecasts. They are not included in the main forecasts because their fiscal impact cannot be reasonably quantified, the likelihood of realisation is uncertain and/or the timing is uncertain.
System of National Accounts (SNA)
SNA is a comprehensive, consistent and flexible set of macroeconomic accounts which meets the needs of government and private sector analysts, policy-makers and decision-takers.
Tax revenue
The accrual, rather than the cash (“tax receipts”) measure of taxation. It is a measure of tax due at a given point in time, regardless of whether or not it has actually been paid.
Terms of trade
The terms of trade measures the volume of imports that can be funded by a fixed volume of exports, and is calculated as the ratio of the total export price index to the total import price index. New Zealand's terms of trade is derived from export and import price indices from Statistics New Zealand's quarterly Overseas Trade Index release.
Top-down adjustment
An adjustment to expenditure forecasts to reflect the extent to which departments use appropriations (upper spending limits) when preparing their forecasts. As appropriations apply to the core Crown only, no adjustment is required to SOEs or CE forecasts.
Total borrowings
Represents the Government's total debt obligations to external parties and can be split into sovereign-guaranteed debt and non-sovereign-guaranteed debt. Non-sovereign-guaranteed debt represents the debt obligations of SOEs and CEs that are not explicitly guaranteed by the Crown.
Total Crown
Includes the core Crown (defined above) plus CEs and SOEs. Also known as the Government Reporting Entity.
Tradable/non-tradable output
There is no official definition of the tradable sector. In this document the tradable sector is defined as the part of the economy particularly exposed to foreign competition. It includes primary, manufacturing and tourism industries. Non-tradable output is estimated as a residual of total real GDP.
Trade-weighted index (TWI)
A measure of movements in the New Zealand dollar against the currencies of our major trading partners. The currencies comprise the US dollar, the Australian dollar, the Japanese yen, the euro and the UK pound.
Votes
When Parliament considers legislation relating to appropriations, the appropriations are grouped within “Votes”. Generally, a Vote groups similar or related appropriations together (eg, Vote Health includes all health- related appropriations administered by the Ministry of Health).
Year ended
Graphs and tables within this document use different expressions of the timeframe. While some tables may refer to the end of the tax year (31 March), others will refer to the end of the Government's financial year (30 June). For example, unless otherwise stated references to 2011/12 or 2012 will mean the end of the financial year.
