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Media StatementFinancial Statements of the Government of New Zealand for the Nine Months Ended 31 March 2007

10 May 2007

Dr Peter Bushnell
Deputy Secretary to the Treasury

The Financial Statements of the Government of New Zealand for the nine months ended 31 March 2007 were released by the Treasury today.

The 31 March 2007 monthly financial statements are compared against updated monthly forecast tracks based on the 2006 Half Year Economic and Fiscal Update.

$ millionMarch 2007
March 2007
Residual cash2,024(342)1,6821072,985
Operating balance6,0125,2707426,26011,473
Gross sovereign-issued debt36,33537,168(833)37,86735,461
% of GDP23.023.6(0.5)23.722.6
Net core Crown debt4,4896,292(1,803)6,3827,745
% of GDP2.84.0(1.2)4.04.9
Net core Crown debt with NZS Fund assets(7,659)(5,528)(2,131)(6,271)(2,116)
% of GDP(4.9)(3.5)(1.4)(3.9)(1.3)
Net worth87,79076,72811,06277,71871,403

The following table outlines the key variances for the year to 31 March 2007:

Item/indicator Variance Key drivers
Tax Revenue nil  
Net investment income (major contributor to the Operating Balance variance) +$1.2 billion
  • Largely unrealised gains on investments held by the:
    • NZSF ($0.6 billion)
    • GSF ($0.1 billion), and
    • ACC ($0.1 billion)
  • Higher than forecast foreign exchange gains ($0.4 billion)
Core Crown expenditure +$0.4 billion
  • Write-down of tax and fines receivables ($1.1 billion); offset by
  • Delays in departmental spending ($0.7 billion)
OBERAC -$0.3 billion Mainly due to delays in departmental spending, offset by write-down of tax and fines receivables above
GSID -$0.8 billion
  • Reductions in DMO foreign currency borrowings ($0.5 billion) and the Reserve Bank’s other lending facilities ($0.7 billion), offset by settlement cash levels being higher than forecast by $0.4 billion
Net Worth +$11.1 billion
  • Revaluation of the rail network ($10.3 billion), and
  • Operating balance impact of the higher than expected net investment returns, write-down of receivables and delays in departmental spending ($0.7 billion)
Residual cash +$1.6 billion Delays in departmental spending on operating ($0.6 billion in cash terms), capital ($0.4 billion) and some one-off unforecast tax receipts ($0.5 billion)

Where appropriate, the March results have been factored into the revised annual forecast, to be released as part of the Budget Economic and Fiscal Update. In summary, the main impacts are:

  • an increased level of investment income, which will be retained by the entities, and

  • delays in departmental spending will impact on the operating balance and residual cash.


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