Fergus Welsh, Acting Chief Government Accountant
The Financial Statements of the Government of New Zealand for the ten months ended 30 April 2014 were released by the Treasury today. These statements are compared against forecasts based on the Budget and Fiscal Update (BEFU), released on 15 May 2014.
The operating balance before gains and losses (OBEGAL) was in deficit by $1.4 billion, which was $148 million less than expected. Core Crown revenue of $55.5 billion was fractionally lower than forecast ($12 million), and core Crown expenses of $57.9 billion were 0.2% less than expected ($90 million).
The operating balance (including gains and losses) was in surplus by $3.8 billion, which was $252 million higher than forecast. In addition to the OBEGAL result, net gains were tracking $112 million above forecast. Continued strength in equity markets saws gains recorded on financial investments of $3.9 billion, which was $709 million ahead of forecast. These gains were offset mainly by an increase in ACC’s insurance liability due to recent decreases in short-term discount rates.
Core Crown tax revenue, revised down in the BEFU, was $111 million (0.2%) below the latest forecast for the 10 month period to April, but $2.3 billion (4.8%) higher than in the year-earlier 10 month period. This year-on-year growth reflected positive macroeconomic conditions leading to growth in source deductions, GST and corporate tax.
The most significant variance within core Crown tax revenue was GST (1.5% below forecast) largely as a result of timing of GST refunds. This variance is expected to reverse out before the end of the fiscal year.
Net debt was close to forecast at $62.3 billion or 28.1% of GDP. At 30 April, total Crown assets were valued at $250.3 billion and liabilities were $174.1 billion and the Crown’s share of net worth strengthened to $70.8 billion.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| $ million | April 2014 Actual1 |
April 2014 BEFU Forecast1 |
Variance to BEFU $m |
Variance to BEFU % |
June 2014 BEFU Forecast2 |
| Core Crown | |||||
| Core Crown tax revenue | 50,528 | 50,639 | (111) | (0.2) | 61,896 |
| Core Crown revenue | 55,515 | 55,527 | (12) | (0.0) | 67,775 |
| Core Crown expenses | 57,876 | 57,966 | 90 | 0.2 | 71,616 |
| Core Crown residual cash | (6,507) | (6,644) | 138 | 2.1 | (3,914) |
| Gross debt3 | 83,039 | 83,083 | 44 | 0.1 | 82,157 |
| as a percentage of GDP | 37.5% | 37.5% | 35.6% | ||
| Net debt4 | 62,252 | 62,323 | 71 | 0.1 | 59,421 |
| as a percentage of GDP | 28.1% | 28.1% | 25.8% | ||
| Total Crown | |||||
| Operating balance before gains and losses | (1,371) | (1,519) | 148 | 9.7 | (2,447) |
| Operating balance | 3,806 | 3,554 | 252 | 7.1 | 2,973 |
| Net worth attributable to the Crown | 70,814 | 70,604 | 210 | 0.3 | 70,032 |
1 Using GDP for the year ended 31 December 2013 of $221,417 million (Source: Statistics New Zealand).
2 Using forecast GDP for the year ended 30 June 2014 of $230,717 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
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Kamlesh Patel | Office of the Government AccountantTel: +64 4 917 6094
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