Dr Peter Bushnell
Deputy Secretary to the Treasury
The Financial Statements of the Government of New Zealand for the eight months ended 28 February 2009 were released by the Treasury today.
Results for the eight months ended 28 February 2009#
- Tax revenue and receipts were approximately $1.8 billion lower than forecast in the Pre-Election Update. This variance has increased since last month, mainly due to a temporary timing difference that is expected to reverse next month. Once this timing difference reverses, we expect tax revenue and receipts to continue tracking more in line with the forecast in the December Update, as the continued deterioration in the world economic situation flows through to the New Zealand economy.
- The operating balance before gains and losses (OBEGAL) was $0.1 billion. This was $1.8 billion lower than forecast in the Pre-Election Update and $1.2 billion lower than forecast in the December Update mainly due to the lower-than-expected tax revenue result.
- Including gains and losses, the operating deficit of $8.4 billion was $11.6 billion lower than forecast in the Pre-Election Update and approximately $5.2 billion lower than forecast in the December Update. The main contributors to this result were lower than forecast tax revenue ($1.8 billion), higher than forecast investment losses ($3.5 billion), and actuarial losses on both the ACC insurance liability ($2.9 billion) and the GSF net pension liability ($2.4 billion).
- Gross debt (Gross Sovereign-Issued Debt less settlement cash) continues to be significantly higher than forecast at $45.4 billion (25.3% of GDP) with higher than forecast issues of Reserve Bank bills, Treasury Bills and derivative liabilities. However, this gross debt figure includes a component of Reserve Bank bills that (like settlement cash) have corresponding and offsetting assets and that were issued for liquidity management purposes, rather than reflecting the government’s underlying borrowing needs. Excluding these bills, gross debt would have been $40.7 billion (22.6% of GDP).
Although gross debt has increased, financial assets have also increased as a result, minimising the impact on net debt. - Net debt is lower than forecast at $3.3 billion (1.8% of GDP). Net debt has been reduced by positive valuation movements in financial assets and financial liabilities held by the New Zealand Debt Management Office and the Reserve Bank (driven by movements in exchange rates and interest rates). This has been partially offset by a higher than forecast residual cash deficit.
| Year to date | Full Year | |||||
|---|---|---|---|---|---|---|
| February 2009 Actual[2] |
February 2009 PREFU Forecast[2] |
Variance to PREFU $m |
Variance to PREFU % |
June 2009 PREFU Forecast[3] |
June 2009 DEFU Forecast[4] |
|
| $ million | ||||||
| Core Crown | ||||||
| Core Crown revenue (excl. NZS Fund) [1] | 39,050 | 40,895 | (1,845) | (4.5) | 61,102 | 60,406 |
| Core Crown expenses | 39,749 | 39,704 | (45) | (0.1) | 62,359 | 62,741 |
| NZS Fund operating balance | (3,566) | 634 | (4,200) | (662.5) | 986 | (2,119) |
| Core Crown residual cash | (6,612) | (4,903) | (1,709) | (34.9) | (5,909) | (6,633) |
| GSID (excl. settlement cash) | 45,424 | 30,471 | (14,953) | (49.1) | 32,087 | 34,786 |
|
25.2% | 16.9% | 17.4% | 19.2% | ||
| Net Core Crown debt | 3,251 | 4,164 | 913 | 21.9 | 5,207 | 5,631 |
|
1.8% | 2.3% | 2.8% | 3.1% | ||
| Net Core Crown debt (incl. NZS Fund) | (7,731) | (10,421) | (2,690) | (25.8) | (10,430) | (7,244) |
|
(4.3)% | (5.8)% | (5.7%) | (4.0)% | ||
| Total Crown | ||||||
| OBEGAL | 49 | 1,826 | (1,777) | (97.3) | (64) | (550) |
| Net gains / (losses) and other items | (8,495) | 1,353 | (9,848) | 1,973 | (3,779) | |
| Operating Balance | (8,446) | 3,179 | (11,625) | (365.7) | 1,909 | (4,329) |
1 For the purposes of this indicator, the NZS Fund is treated as a third party (i.e. its revenue is not included but the tax it pays is).
2 Using GDP for the year ended 31 December 2008 of $180,444 million (Source: Statistics New Zealand).
3 Using forecast GDP for the year ended 30 June 2009 of $184,390 million (Source: Treasury).
4 Using forecast GDP for the year ended 30 June 2009 of $181,139 million (Source: Treasury).
ENDS
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