Fiscal Indicator Analysis - Debt

as at 30 June 2008

Fiscal Indicator Analysis - Debt as at 30 June 2008
Forecast			Actual
Original Budget $m	Estimated Actuals $m		30 June 2008 $m	30 June 2007 $m
		Gross and net debt analysis:
46,364	45,546	Total borrowings	46,110	41,898
38,876	37,035	Core Crown borrowings	37,336	35,892
1,524	638	Add back NZS Fund holdings of sovereign-issued debt and NZS Fund borrowings	409	913
40,400	37,673	Gross sovereign-issued debt[1]	37,745	36,805
51,184	48,927	Less core Crown financial assets[2]	50,698	44,272
(10,784)	(11,254)	Net core Crown debt (incl NZS Fund)[3]	(12,953)	(7,467)
15,439	13,100	Add back NZS Fund holdings of core Crown financial assets and NZS Fund financial assets[4]	12,934	11,576
4,655	1,846	Net core Crown debt (excl NZS Fund)[3]	(19)	4,109
		Gross sovereign-issued debt excluding settlement cash:
40,400	37,673	Gross sovereign-issued debt[1]	37,745	36,805
(7,523)	(7,510)	Less Reserve Bank settlement cash (incl. Kiwibank)	(7,955)	(7,758)
1,600	1,600	Add back changes to DMO borrowing due to settlement cash[5]	1,600	1,600
34,477	31,763	Gross sovereign-issued debt excluding settlement cash	31,390	30,647

[1]Gross sovereign-issued debt is debt issued by the sovereign (i.e. core Crown) and includes Government stock held by the NZS Fund, ACC or EQC for example. In other words, the total sovereign-issued debt does not eliminate any internal cross-holdings held by these entities. The Government's debt objective uses this measure of debt.
[2]Core Crown financial assets exclude receivables.
[3] Net core Crown debt is the Government Sovereign issued debt less financial assets. This can provide information about the sustainability of the Government's accounts, and is used by some international agencies when determining the creditworthiness of a country. However, as some financial assets are not easily converted into cash, and some are restricted, it is important to view net debt alongside gross sovereign-issued debt.
[4]Adding back the NZ Superannuation Fund Assets provides the financial liabilities less financial assets of the Core Crown, excluding those assets set aside to meet part of the future cost of New Zealand superannuation.
[5]The Reserve Bank has used $1.6 billion of settlement cash to purchase reserves that were to have been funded by DMO borrowing. Therefore the impact of settlement cash on gross sovereign-issued debt is adjusted by this amount.

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