Summary
The Government has recorded an Operating Balance excluding Revaluation and Accounting Changes (OBERAC) of $7.9 billion compared to a Budget forecast of $7.4 billion.
Including revaluation changes the operating balance for the total Crown for 2006/07 was $8.7 billion against a Budget forecast of $6.6 billion.
Taxation revenue was $0.7 billion ahead of forecast, primarily in relation to GST ($0.3 billion) and corporate tax ($0.4 billion).
Core Crown expenses were $0.8 billion below forecast and net surpluses of State-owned enterprises and Crown entities were $0.7 billion ahead of forecast. Decreases in the valuations of the Accident Compensation Corporation (ACC) and Government Superannuation Fund (GSF) liabilities of $0.7 billion and $1.2 billion respectively had a significant impact on these variances.
Core Crown residual cash at $2.6 billion was $0.9 billion ahead of forecast.This was primarily due to higher than expected tax receipts of $0.5 billion, and core Crown operating and capital and underspending of $0.5 billion and $0.3 billion respectively. These variances were offset by lower than expected other operating receipts of $0.4 billion.
Gross sovereign-issued debt at $36.2 billion has increased by $0.7 billion since 2005/06, but fell as a percentage of GDP. At 21.7% of GDP this is consistent with the Government’s long term debt objective of GSID being broadly stable at 20% of GDP over the next 10 years. Looking through the Settlement Cash balances of $7.5 billion held by the Reserve Bank, GSID was $28.7 million or 17.2% of GDP.
Net core Crown debt has fallen to $3.4 billion, or 2.1% of GDP. Including the assets of the New Zealand Superannuation (NZS) Fund, the Government was in a net financial asset position of $9.6 billion or 5.7% of GDP. At 30 June 2007 NZS Fund assets stood at $13.0 billion, following the statutory contribution of $2.0 billion and income after tax of $1.1 billion.
| 30 June 2007 actual | Estimated actual | 30 June 2006 actual | ||||
|---|---|---|---|---|---|---|
| $million | % of GDP | $million | % of GDP | $million | % of GDP | |
| Operating Balance | 8,663 | 5.2 | 6,568 | 4.0 | 11,473 | 7.3 |
| OBERAC | 7,920 | 4.8 | 7,380 | 4.5 | 8,648 | 5.5 |
| Residual cash | 2,648 | 1.6 | 1,720 | 1.0 | 2,985 | 1.9 |
| Gross Sovereign Issued Debt | 36,150 | 21.7 | 37,217 | 22.6 | 35,461 | 22.5 |
| Net core Crown Debt | 3,433 | 2.1 | 4,612 | 2.8 | 7,745 | 4.9 |
| Net core Crown debt with NZS Fund assets | (9,556) | (5.7) | (8,306) | (5.0) | (2,116) | (1.3) |
| Net Worth | 95,836 | 57.5 | 88,460 | 53.7 | 71,403 | 45.4 |
GAAP (old GAAP) and NZ IFRS (new GAAP)
These financial statements have been prepared in accordance with Generally Accepted Accounting Practice (GAAP) which encompasses approved Financial Reporting Standards – so called “old GAAP”. These are the last set of Government Financial Statements to be prepared under old GAAP. From 1 July 2007 the Financial Statements of the Government will be prepared in accordance with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS – “new GAAP”). Information on the impact of NZ IFRS on the financial statement is on page 89.
