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Financial Statements of the Government of New Zealand for the Four Months Ended 31 October 2012

5 Dec 2012

The Financial Statements of the Government of New Zealand for the four months ended 31 October 2012 were released by the Treasury today. 

These financial statements are compared against forecast tracks based on the 2012 Budget Economic and Fiscal Update (BEFU) released on 24 May 2012.

In the four months to 31 October the operating balance before gains and losses (OBEGAL) deficit was $169 million higher than forecast, at $2.9 billion.  Core Crown tax and interest revenue were both lower than expected, partially offset by lower core Crown expenses.

Core Crown tax revenue of $17.9 billion was $292 million or 1.6% lower than expected.  This is a similar result to September, with most major types of tax revenue below forecast, except other individuals’ tax revenue, which was higher than expected.  In summary:

  • GST was $253 million lower than forecast, driven by private consumption levels that were lower than expected
  • source deductions were $191 million below forecast, due to weaker wage growth than anticipated, and
  • other individuals’ tax revenue was $351 million higher than expected, reflecting an increase in the effective tax rate paid by non-incorporated businesses.

Other core Crown revenue was $244 million lower than forecast, primarily due to lower-than-expected interest rates, resulting in lower interest revenue.

Core Crown expenditure of $22.9 billion was $343 million or 1.5% lower than forecast.  Most areas recorded under-spends, with delays in some health spending ($117 million), and lower than expected welfare costs ($108 million) reflecting lower beneficiary numbers than anticipated.  Education expenses and finance costs were also below forecast, $72 million and $69 million respectively.  

Largely offsetting these under-spends were earthquake expenses, which were $114 million higher than forecast due to land zoning decisions that were announced after the BEFU forecast was finalised.

While the OBEGAL deficit was higher than forecast, year-to-date gains made on the New Zealand Superannuation Fund and ACC’s investment portfolios were around $1.4 billion greater than expected, and an unforecast actuarial gain of $228 million was also recorded on ACC’s claims liability.  These gains held the operating balance deficit to $34 million, which was $1.9 billion less than expected.

Gross debt and Net debt were close to forecast at $81.5 billion (39.8% of GDP) and $55.5 billion (27.1% of GDP) respectively.



Year to date Full Year
$ million October
2012
Actual1
October
2012
BEFU
Forecast1
Variance
to BEFU
$m
Variance
to BEFU
%
June
2013
BEFU
Forecast2
Core Crown




Core Crown tax revenue 17,917 18,209 (292) (1.6) 58,251
Core Crown revenue
19,727 20,263
(536) (2.6) 64,191
Core Crown expenses 22,946 23,289
343
1.5 73,732
Core Crown residual cash (4,921) (4,829) (92)
(1.9)
(9,671)
Gross debt3 81,503
81,722 219
0.3
79,972
as a percentage of GDP 39.8% 40.0%

36.7%
Net debt4 55,466 55,513 47
0.1 61,265
as a percentage of GDP 27.1% 27.1%     28.1%
Total Crown          
Operating balance before gains and losses (2,865) (2,696) (169) (6.3) (7,897)
Operating balance (34)
(1,957) 1,923 98.3
(5,699)
Net worth 59,773 57,792 1,981 3.4
66,208

1    Using GDP for the year ended 30 June 2012 of $204,551 million (Source: Statistics New Zealand)
2    Using forecast GDP for the year ended 30 June 2013 of $217,870 million (Source: Treasury)
3    Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills
4    Net core Crown debt excluding student loans and other advances

ENDS

Officer for Enquiries

Kamlesh Patel | Office of the Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6094
Email: kamlesh.patel@treasury.govt.nz
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