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Net Worth Attributable to the Crown

Table 14 - Net worth
Year ended 30 June Forecast
30 June 2017
$ million Actual
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Budget
2016
Budget
2017
Net worth attributable to the Crown 68,071 75,486 86,454 89,366 110,532 86,641 100,044
Net worth attributable to minority interests 1,940 5,211 5,782 6,155 5,940 5,784 5,879
Total net worth 70,011 80,697 92,236 95,521 116,472 92,425 105,923
Net worth attributable to the Crown as a % of GDP 31.1 32.0 35.6 35.3 41.2 33.4 37.2

Net worth attributable to the Crown primarily consists of the accumulation of past operating surpluses and deficits (referred to as taxpayers' funds) and revaluation uplifts in the value of the Crown's property assets (the PPE revaluation reserve).

Figure 17 - Net worth attributable to the Crown
Figure 17 - Net worth attributable to the Crown.
Source: The Treasury

Along with the Crown's operating balance surplus, revaluation uplifts of the Crown's property, plant and equipment (details on the next page) resulted in an increase in the Crown's net worth.

Net worth attributable to the Crown was $110.5 billion as at 30 June 2017, an increase of $21.2 billion from a year earlier. As a share of the economy, net worth attributable to the Crown grew 5.9% from 35.3% of GDP in 2015/16 to 41.2% of GDP in the current year.

Figure 18 shows that, while the nominal level of net worth attributable to the Crown has recovered from the decline which began in 2008, the composition of net worth has changed. The main driver of the relatively steady growth in the PPE revaluation reserve over the last few years has been the increases in land and building prices. Although the PPE revaluation reserve grew by 11.3%, as a percentage of net worth attributable to the Crown it has decreased from 84.6% to 76.1% in 2016/17.

Figure 18 - Composition of net worth attributable to the Crown
Figure 18 - Composition of net worth attributable to the Crown.
Source: The Treasury

Taxpayers' funds however, which is directly affected by the operating balance surplus, increased sharply against the prior year, growing by $12.5 billion. As a percentage of net worth attributable to the Crown it has increased to 23.9% in the current year.

Net worth attributable to minority interests largely represents the share of net assets attributable to the investors in the mixed ownership companies (Air New Zealand, Genesis Energy, Mercury NZ and Meridian Energy). The decrease in 2016/17 is the result of dividend payments being larger than the current years' operating profit.

Total Crown Balance Sheet

Table 15 - Composition of the statement of financial position[3]
Year ended 30 June Forecast
30 June 2017
$ million Actual
2013
Actual
2014
Actual
2015
Actual
2016
Actual
2017
Budget
2016
Budget
2017
Social assets 124,348 133,158 139,706 149,419 162,649 145,480 153,744
Financial assets 72,378 74,636 87,039 87,921 94,224 91,869 92,191
Commercial assets 47,690 49,030 52,469 55,339 56,736 54,240 55,347
Total assets 244,416 256,824 279,214 292,679 313,609 291,588 301,282
Social liabilities 16,140 17,015 17,625 19,223 20,089 17,976 19,694
Financial liabilities 130,052 129,589 137,218 144,354 143,186 146,904 141,759
Commercial liabilities 28,213 29,523 32,135 33,581 33,862 34,282 33,906
Total liabilities 174,405 176,127 186,978 197,158 197,137 199,163 195,359
Net worth 70,011 80,697 92,236 95,521 116,472 92,425 105,923
Minority interests (1,940) (5,211) (5,782) (6,155) (5,940) (5,784) (5,879)
Net worth attributable to the Crown 68,071 75,486 86,454 89,366 110,532 86,641 100,044

Total Crown assets were $313.6 billion as at 30 June 2017, a $20.9 billion increase since last year. This growth was largely in social sector assets ($13.2 billion), while financial assets grew by $6.3 billion and commercial assets by $1.4 billion.

Total Crown liabilities were $197.1 billion, decreasing by $21 million from the previous year.

Figure 19 - Total Crown balance sheet
Figure 19 - Total Crown balance sheet.
Source: The Treasury

Social Balance Sheet

Social sector net worth at $142.6 billion was $12.4 billion higher than last year, driven largely by an increase in social assets.

Figure 20 - Social balance sheet
Figure 20 - Social balance sheet.
Source: The Treasury

The Crown's social assets were valued at $162.6 billion, a $13.2 billion increase since last year, and made up 51.9% of the Crown's total assets. The largest uplifts related to the following:

  • The social housing portfolio increased by $2.6 billion of which $2.2 billion relates to land. The land increase mostly related to Auckland stock reflecting the strength of this market.
  • The value of state highways (including land) increased by $2.6 billion, mainly reflecting the development of new and improvements to existing state highway assets.

Social liabilities were $20.1 billion, a $0.9 billion increase compared to 2015/16. This increase was largely due to increased accounts payable and borrowings, offset by a reduction in provisions.

Financial Balance Sheet

The Crown's bond programme and therefore holds the majority of the Crown's debt (while the assets funded by the debt are largely in the social sector). Financial sector net worth changed by $7.4 billion, from -$56.4 billion last year to -$49.0 billion in the current year.

Figure 21 - Financial balance sheet
Figure 21 - Financial balance sheet.
Source: The Treasury

The value of financial assets and financial liabilities are particularly sensitive to changes in market prices. Note 2, on pages 43 to 47, sets out some of the sensitivities of the key assumptions regarding these assets and liabilities.

The Crown's financial sector assets were valued at $94.2 billion, a $6.3 billion increase compared to last year. As mentioned earlier, the NZS Fund recorded net gains with assets growing by $6.8 billion, which directly impacts the financial balance sheet.

Financial sector liabilities were $143.2 billion, $1.2 billion lower than the previous year, mainly as the result of decreases in the value of ACC and GSF liabilities.

Commercial Balance Sheet

Commercial sector net worth at $22.9 billion increased by $1.1 billion compared to last year.

The Crown's commercial assets were valued at $56.7 billion, a $1.4 billion increase over the year. A large component of this increase related to Kiwibank loans ($1.1 billion increase), along with increases due to property, plant and equipment valuation uplifts and additions across the sector.

Figure 22 - Commercial balance sheet
Figure 22 - Commercial balance sheet.
Source: The Treasury

Commercial liabilities at $33.9 billion were broadly in line with last year's position.

Notes

  • [3] Based on three different sectors as examined in the 2014 Investment Statement. The glossary on page 143 explains the definition of these three sectors.
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