Surpluses
|
Year ended 30 June $ million |
Actual 2003 |
Actual 2004 |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Forecast Original Budget |
Forecast Est Actuals |
Actual 2008 |
|---|---|---|---|---|---|---|---|---|
| Total Crown OBEGAL | 4,366 | 5,573 | 7,075 | 7,091 | 5,860 | 4,958 | 5,227 | 5,637 |
| Total Crown gains/(losses) | (2,745) | 1,736 | (1,144) | 2,451 | 2,162 | 1,473 | (2,668) | (3,253) |
| Total Crown Operating balance | 1,621 | 7,309 | 5,931 | 9,542 | 8,022 | 6,431 | 2,559 | 2,384 |
OBEGAL
OBEGAL is the operating balance before gains and losses for the total Crown. By excluding gains and losses the OBEGAL gives a more direct indication of the underlying stewardship of the Government.
- Figure 6 - OBEGAL
- Source: The Treasury
OBEGAL was $410 million (7.8%) higher than forecast for the year ended 30 June 2008 primarily as a result of a forecasting error included in the Budget. A portion of ACC's actuarial loss was forecast as an insurance expense. This error does not impact on the operating balance as it was a reclassification between expenses and losses.
Within this result, the electricity generating SOEs reported large, equal, and opposite variances in both revenue and expenses of approximately $1,400 million. These variances resulted from higher than expected electricity spot prices.
The OBEGAL (excluding the NZS Fund retained revenue) is a measure of the operating balance that recognises that the NZS Fund has been set up to meet future spending pressures and as a result the returns it earns are not available to the Crown to meet current spending requirements. OBEGAL (excluding the NZS Fund retained revenue) was $5,586 million for the year; $367 million lower than forecast.
Operating Balance
- Figure 7 - Operating balance
- Source: The Treasury
The operating balance shows whether the government sector has generated enough revenues (including gains) to cover its expenses (including losses) in any given year.
The operating balance for the total Crown was $175 million (6.8%) lower than forecast at $2,384 million.
Losses of $3,253 million resulted in a decline in the operating balance for the year ended 30 June 2008 and were $585 million (21.9%) more than forecast. These losses compare to gains of $2,162 million for the previous year. The difference is a reflection of the recent decline in overseas equity markets and increases in the ACC claims and GSF liabilities.
The total Crown operating balance is not drawn upon to fund core Crown operations, as current policy is for the NZS Fund, SOEs and CEs to retain a portion of their surpluses for the purpose of achieving their long-term objectives. For the year ended 30 June 2008 SOEs and CEs recorded an overall deficit of $803 million. This deficit includes an operating deficit of $2,408 million in ACC due to equity market and ACC claims liability losses mentioned above. When ACC is excluded the SOE and CE surpluses totalled $1,605 million (refer pages 164 to 166 for a breakdown by individual entity).
During the year $575 million was returned to the Crown as dividends.
