A Snapshot of the 2012 Financial Statements of the New Zealand Government (Part 1)

The economy continued to recover from the recession

Following on from the Global Financial Crisis, the economy grew 3.5% from the previous year, helped by the Rugby World Cup, rebuilding efforts in Canterbury, increased household spending and strong export growth.

Annual average % change in GDP

Labour market and source deductions, June quarter 2012

• Full-time equivalent employees (FTE) increased 2.0% to 1,356,400
• Average weekly paid hours per FTE increased 0.3% to 38.45 hours
• Total weekly paid hours increased 2.4% to 52.153 million hours
• Average hourly earnings increased 2.8% to $27.00/hour
• Total weekly gross earnings increased 5.2% to $1,408 million
• Taxes on employees increased 1.8% to $20.9 billion (year to June)

Where does the Government's money come from?

66% of all revenue was from collecting taxes

Tax revenue increased $3.5 billion from last year as the economy rebounded, spending increased, and wages and salaries rose.

20% of revenue was from selling goods and services

83% came from activities of the SOEs, eg, postal services, supplying electricity and airfares.

14% was from other sources including ACC levies and EQC levies

Where does the Government's money come from?

Revenue trend:

Total Crown revenue increased by $1.9 billion from last year.

While all major tax types were stronger, this year's higher business profits were a big driver increasing tax revenue.

Revenue

Facts and figures

Next year 3.3 million New Zealanders are forecast to pay income tax of $25.1 billion ($0.5 billion more than last year). This is an average of $7,600 per person.

Who pays income tax, and how much?

Income	% of people	pay % of tax
Under 30,000	54	12
$30,000 - $70,000	32	33
Over $70,000	14	55

Note: this data was based on forecasts for the year to 31 March 2013.

Your tax dollar - where was it spent?

Just over 50% of total Crown spending was on the three main areas of public spending, welfare, health and education. See the next page for details on what this spending provided.

Other core Crown expenses includes spending on law and order, defence, housing, and interest costs on government borrowing.

The SOE and Crown entity (CE) sectors make up 26% of total Crown expenses.

Your tax dollar – where was it spent?

The $69.1 billion of core Crown expenses includes all Departments, Offices of Parliament, the Reserve Bank and the New Zealand Superannuation Fund.

Expenses trend:

Total Crown expenses were $7.3 billion less than last year due to lower earthquake costs (see next page) and some decreases in departmental spending (as shown by the light blue line).

Expenses

Your dollar provided...

Welfare, health and education services of $48 billion, 1.4% growth from last year

Social welfare

$9.6 billion of funding to provide 585,000 superannuitants with income support and $4.8 billion to 335,000 New Zealanders receiving the unemployment, sickness, invalids, and domestic purposes benefits.

Health

Nearly $11.5 billion of funding to hospitals around the country employed 49,356 nurses and 14,333 doctors to provide healthcare, including 153,000 elective surgeries.

Education

Total core Crown education expenses of $11.7 billion helped to fund learning for 216,000 children in early childhood education services; 763,000 students in primary and secondary schools; and employ 52,000 teachers.

Spending in Canterbury

The bulk of the Government's share of earthquake costs was recorded last year. However, costs are still being incurred, and will continue to do so until final decisions and cost estimates have been made.

So far, the net cost to the Government of the earthquakes has been $11.0 billion. The main costs this year were further EQC insurance claims; an estimate of the Government's share of local authorities' costs for restoring local infrastructure; and further offers made to purchase Red Zone properties.

In the two years since the 4 September 2010 earthquake:

• Over 11,900 earthquakes have shaken the region
• EQC received 459,237 claims and paid out over $3.3 billion ($4.6 million per day)
• CERA zoned 7,779 properties red and has settled with around 58% of those property owners so far