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Pre-Election Economic and Fiscal Update 2008

5 Generally Accepted Accounting Practice (GAAP) Series Tables

Forecast Financial Statements

These forecasts have been prepared in accordance with the Public Finance Act 1989.

They are based on the accounting policies and assumptions that follow. As with all such assumptions, there is a degree of uncertainty surrounding them. This uncertainty increases as the forecast horizon extends.

The forecasts have been prepared in accordance with the Statement of Responsibility and reflect the judgements and information known at the time they were prepared. They reflect all Government decisions and circumstances communicated to 17 September 2008.

The finalisation dates are outlined at the beginning of this document. A summary of the key economic assumptions that are particularly relevant to the fiscal forecast is provided below. These figures are on a June year basis to align with the government's balance date of 30 June.

Key Economic Assumptions
June years
BEFU
2008/09
PREFU
2009/10
PREFU
2010/11
PREFU
2011/12
PREFU
2012/13
PREFU
Real GDP (P) (ann avg % chg) 1.6 0.2 2.3 3.4 3.4 3.1
Nominal GDP (E) ($m) 185,478 184,390 190,713 199,881 210,205 220,574
CPI (annual avg % change) 3.2 4.3 2.3 2.4 2.5 2.4
Govt 10-year bonds (qty avg %) 6.3 6.3 6.3 6.2 6.1 6.0
90-day bill rate (qty avg %) 8.3 7.3 7.0 6.7 6.4 6.3
Unemployment rate ((HLFS) basis ann avg %) 3.7 4.3 5.0 5.1 4.9 4.6
Full-time equivalent employment (ann avg % change) 1.2 0.0 -0.2 0.7 1.5 1.9
Current account (% of GDP) -7.2 -7.4 -6.2 -5.6 -5.2 -5.0

Statement of Accounting Policies and Forecast Assumptions

Significant Accounting Policies

These Forecast Financial Statements have been prepared in accordance with the accounting policies that are expected to be used in the comparable audited actual Financial Statements of the Government.

These Forecast Financial Statements comply with generally accepted accounting policies (GAAP) as required by the Public Finance Act 1989 and have been prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS), as appropriate for public benefit entities.

All forecasts use the accrual basis of accounting. Forecasts have been prepared for the consolidated financial statements of the Government reporting entity, which includes all entities controlled by the Government (as defined by applicable financial reporting standards).

Changes in Accounting Policies

All policies have been applied on a consistent basis during the forecast period. There have been no changes in accounting policies during the period.

Forecast Policies

These Forecast Financial Statements have been prepared on the basis of Treasury's best professional judgment. Key assumptions used are set out on page 83.

For the purposes of the Forecast Financial Statements, no revaluations of property, plant and equipment are projected beyond the current year.

Detailed Accounting Policies and Forecast Assumptions

The specific accounting and forecasting policies are reproduced in full on Treasury's website at http://www.treasury.govt.nz/publications/guidance/instructions/2008

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