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Financial Statements of the Government of New Zealand for the Three Months Ended 30 September 2013

8 Nov 2013

The Financial Statements of the Government of New Zealand for the three months ended 30 September 2013 were released by the Treasury today. These financial statements are compared against forecasts based on the Budget Economic and Fiscal Update (BEFU), released on 16 May 2013. 

Overall, key indicators were slightly stronger than forecast in Budget 2013.

Core Crown tax revenue of $14.4 billion was 1.1% higher than forecast, largely due to other individuals’ tax and GST ($143 million and $108 million respectively).  While GST was relatively close to forecast, continued strength in gross other persons tax and lower than expected refunds have contributed to higher than forecast other individuals tax.  This improved performance was partially offset by $113 million lower than expected corporate tax, due to lower than forecast provisional tax.

Core Crown expenses of $17.5 billion were 1.4% lower than forecast.  Delays in earthquake expenses and treaty settlements ($88 million and $55 million respectively) led to lower than expected expenses.  Other lower than forecast expenditure was spread across a number of activities.

The total Crown’s operating balance before gains and losses (OBEGAL) was a deficit of $1.3 billion which was $382 million lower than expected, largely owing to the stronger than forecast core Crown tax revenue and lower than expected core Crown expenses.

Gains on the Crown’s investment portfolios were $781 million higher than expected, particularly the New Zealand Superannuation Fund.  In addition, actuarial gains on the ACC outstanding claims liability arising from discount rate changes, resulted in unforecast gains of $812 million.  The better than expected core Crown revenue and expenses result, alongside these stronger than expected gains, were the key reason for the total Crown’s operating balance inclusive of gains and losses recording a $539 million surplus, compared with an expected  $1.2 billion deficit.

At 30 September, total Crown assets were $242.2 billion and liabilities were $171.7 billion.  The Crown’s net worth strengthened to $68.5 billion.

The core Crown operating cash deficit was $2.8 billion.  After taking account of capital expenditure during the year, there was a residual cash deficit of $3.7 billion at 30 September ($400 million below forecast).  The cash shortfall was funded through additional borrowing which pushed the net core Crown net debt to $60.0 billion, equivalent to 28.2% of GDP.  Gross debt was also close to forecast at $80.1 billion, or 37.7% of GDP.


Year to date Full Year
$ million September
2013
Actual1
September
2013
BEFU
Forecast1
Variance
to BEFU
$m
Variance
to BEFU
%
June
2014
BEFU
Forecast2
Core Crown




Core Crown tax revenue 14,357
14,202
155
1.1
62,383
Core Crown revenue
16,035
15,718
317
2.0
68,382
Core Crown expenses 17,517
17,768
251
1.4
72,367
Core Crown residual cash (3,706) (4,106)
400
9.8
(6,886)
Gross debt3 80,114
80,536
422
0.5
87,686
as a percentage of GDP 37.7% 37.9%     38.5%
Net debt4 60,015
60,449
434
0.7
64,765
as a percentage of GDP 28.2% 28.4%     28.4%
Total Crown          
Operating balance before gains and losses (1,285) (1,667) 382
22.9
(2,033)
Operating balance 539
(1,157)
1,696
146.6
358
Net worth attributable to the Crown
68,498 66,957
1,541
2.3
61,997

1    Using GDP for the year ended 30 June 2013 of $212,701 million (Source: Statistics New Zealand)
2    Using forecast GDP for the year ended 30 June 2014 of $227,892 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 Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6094
Email: kamlesh.patel@treasury.govt.nz
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