Debt
| Year ended 30 June | Actual 2004 |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Actual 2008 |
Forecast Original Budget |
Forecast Est Actuals |
Actual 2009 |
|---|---|---|---|---|---|---|---|---|
| Net debt ($m) | 23,858 | 19,879 | 16,163 | 13,380 | 10,258 | 16,375 | 15,482 | 17,119 |
| Net debt (% GDP) | 16.7% | 13.1% | 10.2% | 7.9% | 5.7% | 8.8% | 8.7% | 9.5% |
| Gross debt ($m) | 36,017 | 35,478 | 33,903 | 30,647 | 31,390 | 32,498 | 44,217 | 43,356 |
| Gross debt (% GDP) | 25.2% | 23.3% | 21.4% | 18.1% | 17.5% | 17.5% | 24.8% | 24.1% |
- Figure 8 - Net debt
- Source: The Treasury
Net Debt
Net debt increases as a result of cash deficits and declines as a result of cash surpluses. In addition it will also fluctuate in line with valuation movements in the underlying financial assets and liabilities of the Crown and movements in the amounts of currency issued to New Zealand banks.
The $6.9 billion increase in net debt compared to 2008 is primarily due to the residual cash deficit of $8.6 billion recorded this year (refer table 8).
Net core Crown cash from operations reduced by $9.3 billion dollars from last year resulting in a net operating cash deficit of $2.0 billion. This decrease represents the cash impact of reducing tax revenues and increasing core Crown expenses discussed previously.
|
Year ended 30 June |
Actual |
Actual |
Actual |
Actual |
Actual |
Forecast |
Forecast |
Actual |
|---|---|---|---|---|---|---|---|---|
| Opening net debt | 24,531 | 23,858 | 19,879 | 16,163 | 13,380 | 12,985 | 10,258 | 10,258 |
| Net core Crown cash flow from operations | (5,443) | (8,560) | (8,859) | (8,586) | (7,292) | (2,551) | 1,141 | 1,967 |
| Contributions to NZS Fund | 1,879 | 2,107 | 2,337 | 2,048 | 2,104 | 2,242 | 2,242 | 2,243 |
| Purchase of physical assets | 1,299 | 1,372 | 1,826 | 1,755 | 1,433 | 1,802 | 1,503 | 1,625 |
| Advances and capital injections | 1,745 | 1,977 | 1,711 | 1,990 | 1,698 | 1,985 | 3,572 | 2,804 |
| Core Crown residual cash (surplus)/deficit | (520) | (3,104) | (2,985) | (2,793) | (2,057) | 3,478 | 8,458 | 8,639 |
| Movements in circulating currency | (114) | (188) | (165) | (81) | (86) | (181) | (509) | (475) |
| Other valuation changes in financial assets and financial liabilities | (39) | (687) | (566) | 91 | (979) | 93 | (2,725) | (1,303) |
| Closing net debt | 23,858 | 19,879 | 16,163 | 13,380 | 10,258 | 16,375 | 15,482 | 17,119 |
In addition to a decline in operating cash flows, capital payments (contribution to NZS Fund, purchase of physical assets, advances and capital injections) totalled $6.6 billion, which is a $1.4 billion increase from the previous year. This increase includes $0.7 billion paid for KiwiRail in July 2008.
- Figure 9 - Application of core Crown residual cash for the year ended 30 June 2009 ($ billion)
Compared to the 2009 Budget, net debt is $1.6 billion higher than forecast. While residual cash was in line with expectations, valuation changes to financial assets and financial liabilities (primarily due to movements in the exchange rates) increased net debt by $1.4 billion.
Gross Debt
- Figure 10 - Gross debt
- Source: The Treasury
Gross debt increased by $12.0 billion since last year. Net domestic bond issuances accounted for $3.1 billion of this increase (refer table 9). In addition, the New Zealand Debt Management Office increased their short term borrowing by $6.0 billion by issuing Treasury Bills.
While the amount of gross debt ($43.4 billion) is the highest since 1995, as a percentage of GDP (24.1%) it remains below 2004 levels.
Compared to the 2009 Budget, the increase in gross debt was slightly lower than forecast ($0.9 billion) as the market value of domestic bonds and derivative liabilities were lower than expected.
|
Year ended 30 June $ million |
Actual 2004 |
Actual 2005 |
Actual 2006 |
Actual 2007 |
Actual 2008 |
Forecast Original Budget |
Forecast Est Actuals |
Actual 2009 |
|---|---|---|---|---|---|---|---|---|
| Domestic bonds (market) | 2,212 | 2,146 | 2,375 | 2,294 | 1,757 | 3,314 | 5,852 | 5,775 |
| Repayment of domestic bonds (market) | (3,044) | (2,797) | (2,574) | (2,777) | - | (2,700) | (2,700) | (2,750) |
| Net increase/(decrease) in market domestic bonds | (832) | (651) | (199) | (483) | 1,757 | 614 | 3,152 | 3,025 |
| Domestic bonds (non-market) | 478 | 459 | 740 | 570 | 130 | 662 | 593 | 541 |
| Repayment of domestic bonds (non-market) | (357) | (338) | (375) | (421) | - | (451) | (515) | (515) |
| Net increase/(decrease) in non-market domestic bonds | 121 | 121 | 365 | 149 | 130 | 211 | 78 | 26 |
| Net total bond issuance/(repayment) | (711) | (530) | 166 | (334) | 1,887 | 825 | 3,230 | 3,051 |
