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Financial Statements of the Government of New Zealand for the Seven Months Ended 31 January 2013

8 Mar 2013

The Financial Statements of the Government of New Zealand for the seven months ended 31 January 2013 were released by the Treasury today. 

These financial statements are compared against forecast tracks based on the 2012 Half Year Economic and Fiscal Update (HYEFU), released on 18 December 2012.

The Operating Balance before Gains and Losses (OBEGAL) was in defict by $2.5 billion, which is $571 million lower than forecast and is largely owing to core Crown tax revenue being $486 million higher than expected.  There were two tax types contributing to the improved tax revenue:

  • Tax from source deductions was $225 million above forecast.  Total labour force earnings were in line with forecast, however there was a fall in employment concentrated at the lower end of the income scale, for example, part-time workers.  Overall, the same amount of income was earned by fewer workers, increasing the average tax rate due to the progressive nature of the personal income tax scale.
  • Tax from other individuals was $277 million above forecast, primarily owing to higher incomes being earned, part of which was ifrom nvestment income on the back of strong equity markets.

Core Crown expenses were $282 million below forecast at $39.5 billion. As with December this was largely due to delays in finalising complex negotiation issues in Treaty of Waitangi settlements.

Including net gains, the operating balance was in surplus by $4.2 billion, some $4.3 billion ahead of forecast, largely owing to significant net investment gains made by the New Zealand Superannuation Fund ($1.3 billion) and ACC ($0.5 billion).  In addition, ACC has recorded higher than expected actuarial gains on its outstanding claims liability of $1.4 billion, largely due to favourable changes in the discount rate and claims experience.

The residual cash deficit was $144 million smaller than expected, largely reflecting higher tax receipts than forecast.

Net debt was $323 million lower than forecast, reflecting the residual cash result and higher than forecast levels of currency in circulation, while gross debt was on forecast at 40.3% of GDP.



Year to date Full Year
$ million January
2013
Actual1
January
2013
HYEFU
Forecast1
Variance
to HYEFU
$m
Variance
to HYEFU
%
June
2013
HYEFU
Forecast2
Core Crown




Core Crown tax revenue 33,109
32,623
486
1.5
57,376
Core Crown revenue
36,031
35,589
442
1.2
62,939
Core Crown expenses 39,519 39,801
282
0.7
71,998
Core Crown residual cash (6,698) (6,842) 144
2.1
(9,782)
Gross debt3 83,943 83,965 22
0.0
80,176
as a percentage of GDP 40.3%
40.3%
    37.1%
Net debt4 57,303 57,626
323
0.6
59,998
as a percentage of GDP 27.5% 27.7%     27.8%
Total Crown          
Operating balance before gains and losses (2,511) (3,082) 571
18.5
(7,340)
Operating balance 4,171
(154) 4,325
2,808.4
(3,275)
Net worth attributable to the Crown
63,522 59,207
4,315
7.3
56,285

1    Using GDP for the year ended 30 September 2012 of $208,326 million (Source: Statistics New Zealand)
2    Using forecast GDP for the year ended 30 June 2013 of $216,048 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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