Summary
In 2005/06, the New Zealand Government recorded an Operating Balance excluding Revaluations and Accounting Changes (OBERAC) surplus of $8.6 billion, or 5.5 percent of gross domestic product (GDP). This was $1.7 billion higher than forecast at the time of the 2006 Budget. The 2005/06 cash balance was a surplus of $3.0 billion (1.9 percent of GDP), $1.2 billion higher than forecast at 2006 Budget.
| 30 June 2006 actual | Estimated actual | 30 June 2005 actual | ||||
|---|---|---|---|---|---|---|
| $million | % of GDP | $million | % of GDP | $million | % of GDP | |
| Operating Balance | 11,473 | 7.3 | 8,486 | 5.4 | 6,247 | 4.1 |
| OBERAC | 8,648 | 5.5 | 6,977 | 4.5 | 8,873 | 5.9 |
| Gross Sovereign Issued Debt | 35,461 | 22.6 | 35,952 | 23.0 | 35,045 | 23.3 |
| Net core Crown Debt | 7,745 | 4.9 | 9,016 | 5.8 | 10,771 | 7.2 |
| Net core Crown debt with NZS Fund assets | (2,116) | (1.3) | (999) | (0.6) | 4,216 | 2.8 |
| Net Worth | 71,403 | 45.5 | 58,485 | 37.4 | 49,983 | 33.2 |
Core Crown revenue was $2.5 billion higher than the 2006 Budget forecast. This largely reflects the change in the accounting treatment for the recognition of provisional tax that has resulted in a one-off, non-cash adjustment to tax revenue of $1.8 billion (refer Changes to the Calculation of Provisional Tax Revenue). Tax revenue from individuals was also higher than expected reflecting continuing strong labour income growth.
Core Crown expenses were $0.5 billion lower than expected at the 2006 Budget, with a range of areas contributing.
Capital spending was also $0.4 billion lower than expected. This underspend related to investments and advances to District Health Boards and Housing New Zealand Corporation and to purchases of physical assets in a number of departments.
New Zealand Government gross sovereign-issued debt (GSID) increased by $0.4 billion in 2005/06 to $35.5 billion, but fell as a percentage of GDP. At 22.6 percent of GDP this is within sight of the Government’s long term debt objective of GSID being broadly stable at 20 percent of GDP over the next 10 years.
Net core Crown debt was $7.7 billion (4.9 percent of GDP). Including the assets of the NZS Fund, the Crown was in a net financial asset position of $2.1 billion (1.3 percent of GDP). At 30 June 2006 the NZS Fund assets stood at $9.9 billion following the statutory contribution of $2.3 billion and investment returns of $1 billion.
