Cash Position
|
Year ended 30 June $ million |
Actual 2003 |
Actual 2004 |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Forecast Original Budget |
Forecast Est Actuals |
Actual 2008 |
|---|---|---|---|---|---|---|---|---|
| Net core Crown cash flow from operations | 4,856 | 5,443 | 8,560 | 8,859 | 8,586 | 5,038 | 7,018 | 7,292 |
| Contributions to NZS Fund | (1,200) | (1,879) | (2,107) | (2,337) | (2,048) | (2,103) | (2,103) | (2,104) |
| Purchase of physical assets | (1,059) | (1,299) | (1,372) | (1,826) | (1,755) | (1,803) | (1,544) | (1,433) |
| Advances and capital injections | (1,380) | (1,745) | (1,977) | (1,711) | (1,990) | (2,108) | (2,463) | (1,698) |
| Core Crown residual cash | 1,217 | 520 | 3,104 | 2,985 | 2,793 | (976) | 908 | 2,057 |
Core Crown residual cash represents the core Crown cash surplus (or deficit) after operating and investing cash requirements (including contributions to the NZS Fund) are met. It represents the money available to the Government to invest, repay debt or, alternatively, the money the Government needs to fund in any given year.
- Figure 8 - Residual cash
- Source: The Treasury
Residual cash was $1,149 million higher than forecast for the year ended 30 June 2008 at $2,057 million. Increases in the cash surplus were mainly due to:
- the delay in the $690 million KiwiRail purchase from 30 June to 1 July
- KiwiSaver payments being $210 million lower than forecast with regards to kick-start payments and employer tax credits, and
- department cash requirements being $545 million less than expected.
These surpluses were partially offset by tax receipts which were $417 million (0.7%) lower than forecast. In particular, the following tax types were lower than forecast:
- corporate tax receipts were $419 million (4.0%) lower than forecast due in the main to lower-than-expected provisional tax receipts through May and June from large corporate entities
- GST receipts were $148 million (1.3%) lower than forecast reflecting the effects of recent economic activity, and
- net other individuals tax receipts were $130 million (3.3%) lower than forecast due to lower than expected provisional tax payments from the agricultural sector.
In contrast, stronger than expected wage growth contributed to source deduction tax receipts being $124 million (0.5%) higher than forecast.
Over recent years residual cash surpluses have reflected strong economic growth coupled with some departmental underspending.
- Table 7 - Application of core Crown residual cash for the year ended 30 June 2008 ($ billion)
- Figure 9 - Total Crown net purchases of PPE ($ million)
- Source: The Treasury
- Figure 10 - Total Crown net purchases of PPE by sector ($m and % of total) for year ended 30 June 2008
- Source: The Treasury
- Figure 11 - Total Crown net purchases of PPE by asset type ($m and % of total) for year ended 30 June 2008
- Source: The Treasury
- $986 million on state highway roading
- $571 million on electricity generation assets
- $509 million on education facilities such as schools
- $446 million by district health boards
- $320 million on specialist military equipment, and
- $234 million on rail assets (excluding KiwiRail).
The residual cash of $2,057 million has resulted in an increase in core Crown financial assets as discussed on page 15.
Capital Investment
Core Crown purchases of physical assets ($1,433 million) and advances and capital injections ($1,698 million) represent the capital investment of the core Crown (refer Table 6).
Advances and capital injections are often used by CEs and SOEs to purchase physical assets (such as roading and rail assets). Therefore, to obtain a complete picture of the Government's capital investment it is necessary to “look through” core Crown advances and capital injections and consider total Crown physical asset purchases.
Figures 9 to 11, therefore, show the purchase of physical assets (referred to as “PPE”) of the total Crown, offset by asset disposals.
Total Crown net PPE purchases for the current financial year included:
The $690 million purchase of KiwiRail occurred on 1 July and is therefore not included in this capital investment analysis.
