Core Crown Cash Flows
The OBERAC cannot be fully used by the Government to fund its capital programme. This is because some components of the OBERAC are non-cash (ie, depreciation) or retained by entities within the Crown (ie, SOE/Crown entities surpluses and NZS Fund returns) for the purposes of achieving their long term objectives.
Adjusting for these items gives the core Crown operating cash flow, which was $8.6 billion for the year ended 30 June 2005. The core Crown cash flow from operations has been used to fund the capital expenditure, which included:
- contributions to the NZS Fund of $2.1 billion
- net purchases of physical assets of $1.4 billion (eg, land and buildings for prisons and schools)
- capital injections of $0.6 billion (including District Health Boards, HNZC and Air NZ) and purchase of Reserve Bank reserves of $0.8 billion, and
- advances of $0.6 billion (primarily student loans).
The core Crown cash flow generated from operations has been more than sufficient to meet the government’s capital programme, leaving a $3.1 billion cash available for debt repayment from the current year’s operating and investing activities.
| $ million | 30 June 2005 Actual | 30 June 2004 Actual | Change |
|---|---|---|---|
| Operating activities | 8,560 | 5,443 | 3,117 |
| Investing activities (including NZS Fund purchases of MSDs & equities, and excluding other net purchases of MSDs) | (5,456) | (4,923) | (533) |
| Net cash flow from core operating and investing activity | 3,104 | 520 | 2,584 |
| Net sale/(purchase) of other marketable securities and deposits | (3,119) | 541 | (3,660) |
| Financing activity | 108 | (811) | 919 |
| Net movement in cash | 93 | 250 | (157) |
