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Year End Results Compared to Budget 2017

The Budget Economic and Fiscal Update 2017 (Budget 2017) was published on 25 May 2017.

Reference to estimated actuals refers to the most recent Budget and Economic Fiscal Update for any given year.

Table 16 - Comparison to Budget 2017
Year ended 30 June
$ million
Actual
2017
Budget
2017
Variance to
Budget 2017
$m
Variance to
Budget 2017
%
Core Crown tax revenue 75,644 74,598 1,046 1.4
Core Crown expenses 76,339 77,464 1,125 1.5
OBEGAL (excluding minority interests) 4,069 1,621 2,448  
Operating balance (excluding minority interests) 12,317 9,438 2,879  
Residual cash 2,574 71 2,503  
Gross debt 87,141 88,645 1,504 1.7
      as a percentage of GDP 32.5% 33.0%    
Net debt 59,480 62,277 2,797 4.5
      as a percentage of GDP 22.2% 23.2%    
Net worth attributable to the Crown 110,532 100,044 10,488 10.5
      as a percentage of GDP 41.2% 37.2%    

Core Crown Tax Revenue

Table 17 - Core Crown tax revenue compared to Estimated Actuals
Year ended 30 June ($ billion)  
Budget 2017 core Crown tax revenue 74.6
Source deductions 0.2
Corporate tax 0.6
GST 0.1
Other movements 0.1
Actual 2017 core Crown tax revenue 75.6

Source:  The Treasury

Core Crown tax revenue was $1.0 billion (1.4%) higher than expected, with the largest differences being:

  • Corporate tax: $0.6 billion (4.5%) above forecast. $0.1 billion of the variance was from higher-than-expected PIE tax revenue. The remainder of the variance was spread across companies both large and small, from both the 2016 (terminal tax) and 2017 (provisional tax) income years, with most sectors of the economy represented, including a significant contribution from companies operating in the finance and insurance sector.
  • Source deductions: $0.2 billion (0.7%) above forecast. At the time the Budget forecast was compiled, the forecasts were based on actual outturn to March which was tracking below labour market data. However, over the past three months, source deduction revenue has moved steadily ahead of the Budget 2017 forecast, to come back into line with the labour market data.
Figure 23 - Core Crown tax revenue variance to Estimated Actuals
Figure 23 - Core Crown tax revenue variance to Estimated Actuals.
Source: The Treasury

Core Crown Expenses

Core Crown expenses were $1.1 billion (1.5%) lower than expected.

The lower than forecast result was largely due to lower than forecast impairment of tax receivables and although significant progress was made during the 2016/17 year in Treaty Settlement negotiations, several deeds negotiated during this period were not initialled until July - September 2017, falling outside the actual results.

Figure 24 - Core Crown expenses variance to Estimated Actuals
Figure 24 - Core Crown expenses variance to Estimated Actuals.
Source: The Treasury

OBEGAL

The OBEGAL surplus was $2.4 billion higher than Budget 2017 forecast. The majority of the variance against Budget 2017 is reflected in the favourable variances in core Crown revenue and core Crown expenses discussed earlier.

The variance in the operating balance against Budget 2017 is primarily explained by the OBEGAL movement for the same forecast period.

Residual Cash and Net Debt

The residual cash surplus was $2.5 billion higher than Budget 2017 with operating cash flows $1.3 billion higher than expected and capital payments $1.2 billion lower than forecast.

Operating cash flows were favourable to forecast with operating payments making up $0.6 billion of this and tax receipts increasing by $0.3 billion.

Capital payments were $1.2 billion lower than Budget 2017, driven by less than forecast purchase of physical assets and investments, due to delays in projects (eg, investment in school property assets).

Net debt at $59.5 billion (22.2% of GDP) was $2.8 billion below forecast mainly driven by the residual cash surplus.

Gross Debt

Gross debt at $87.1 billion (32.5% of GDP) was $1.5 billion lower than forecast with the repurchase of Government bonds being higher than forecast.

Net Worth Attributable to the Crown

The net worth attributable to the Crown was $10.5 billion stronger than Budget 2017 forecast mainly due to an upwards revaluation of property, plant and equipment of $7.5 billion and a favourable operating balance of $2.9 billion against Budget 2017.

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