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Financial Statements of the Government of New Zealand for the Eleven Months ended 31 May 2016

5 Jul 2016

Nicola Haslam, Acting Chief Government Accountant

The Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2016 were released by the Treasury today.  The statements are compared against forecasts based on the 2016 Budget Year Economic and Fiscal Update (BEFU) published on 26 May 2016.

The results for the eleven months to the end of May show an operating balance before gains and losses (OBEGAL) surplus of $2,304 million. The OBEGAL surplus is expected to decline in June as growth in expenses is expected to outpace revenue. Most key indicators were consistent with BEFU forecasts, with the large timing variance in tax revenue from April of $1.1 billion largely reversing as expected.

Core Crown tax revenue at $64.7 billion, was 0.6% or $364 million higher than forecast largely due to customs and excise duties ($188 million), source deductions ($182 million) and GST ($98 million). These variances are a mix of timing and permanent in nature.

Core Crown expenses at $67.2 billion, were close to forecast.

When gains and losses are combined with the OBEGAL result, the operating balance was a deficit of $1.5 billion ($82 million larger than forecast).

The core Crown residual cash position, at a deficit of $927 million, was $871 million smaller than expected, primarily reflecting higher than expected tax receipts and lower cash payments. 

Net debt at $61.5 billion (24.7% of GDP) was $469 million lower than forecast, largely reflecting the residual cash result, partly offset by lower amounts of circulating currency and the impact of changes in foreign exchange rates on financial instruments.

At 31 May 2016, total Crown assets were valued at $285.6 billion and liabilities were $195.3 billion while the Crown’s share of net worth stood at $84.6 billion.

The current OBEGAL surplus of $2,304 million compares to a surplus of $1,176 million at the same time last year.  Core Crown tax revenue has increased by 5.7%, while core Crown expenses have grown by 2.3% over that time.

$ million Year to date Full Year
May
2016
Actual1
May
2016
BEFU 16
Forecast1
Variance
 to
BEFU 16
$m
Variance
 to
BEFU 16
%
June
2016
BEFU 16
Forecast2
Core Crown




Core Crown tax revenue 64,720 64,356 364 0.6 69,682
Core Crown revenue
69,829 69,433 396 0.6 75,329
Core Crown expenses 67,244 67,333 89 0.1 74,382
Core Crown residual cash (927) (1,798) 871 48.4 (2,115)
Gross debt3 87,836 86,487 (1,349) (1.6) 86,783
as a percentage of GDP 35.3% 34.8%     34.7%
Net debt4 61,487 61,956 469 0.8 62,272
as a percentage of GDP 24.7% 24.9%     24.9%
Total Crown          
Operating balance before gains and losses 2,304 1,983 321 16.2 668
Operating balance (1,460) (1,378) (82) (6.0) (2,565)
Net worth attributable to the Crown
84,574 84,771 (197) (0.2) 83,547
  1. Using the most recently published GDP (for the year ended 31 Mar 2016) of $248,647 million (Source: Statistics New Zealand).
  2. Using forecast GDP for the year ending 30 June 2016 of $250,126 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. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.

ENDS

Officer for Enquiries

Kamlesh Patel | Office of the Government Accountant
Tel: +64 4 917 6094
Email: fiscalreporting@treasury.govt.nz
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