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Media Statement Financial Statements of the Government of New Zealand for the Nine Months Ended 31 March 2011

10 May 2011

Struan Little
Deputy Secretary to the Treasury

 

The Financial Statements of the Government of New Zealand for the nine months ended 31 March 2011 were released by the Treasury today.

The monthly financial statements are compared against monthly forecast tracks based on the 2010 Half Year Economic and Fiscal Update published in December 2010.

The key features of the results were:

  • Overall, core Crown tax revenue was $37.9 billion, $19 million (0.1%) higher than forecast, with source deductions $242 million (1.6%) above forecast offset by GST revenue which was $263 million (2.6%) below forecast.
  • Core Crown expenses was $50.4 billion, $422 million (0.8%) lower than forecast due to underspends across a number of areas.
  • The residual cash deficit was close to forecast at $12.4 billion.
  • The total Crown operating balance before gains and losses deficit was $10.2 billion, $1.3 billion (14.8%) higher than forecast due mainly to EQC’s estimated $1.5 billion share of costs for the 22 February earthquake in Christchurch, which was not forecast.
  • However, the operating balance deficit was $3.8 billion stronger than expected, primarily due to gains on investments and derivatives held by the NZS Fund and ACC and actuarial gains on the valuation of ACC’s long term liabilities.
  • There was a significant increase in gross debt during March with $2.8 billion of bonds sold, a record month for bond issuance.  The increase was driven by strong demand from investors, putting gross debt $2.5 billion ahead of forecast at $66.7 billion (34.3% of GDP), after being $0.6 billion lower than forecast at 28 February.
  • Despite the higher than expected increase in gross debt, net debt was similar to forecast at $39.4 billion (20.2% of GDP), because the proceeds from the bond issuances were largely invested in financial assets.

 

Year to date Full Year
$ million March
2011
Actual1
March 2011
HYEFU
Forecast1
Variance
to HYEFU
$m
Variance
to HYEFU
%
June 2011
HYEFU
Forecast2
Core Crown
Core Crown tax revenue 37,907 37,888 19 0.1 52,527
Core Crown revenue 41,513 41,979 (466) (1.1) 58,446
Core Crown expenses 50,350 50,772 422 0.8 70,560
Core Crown residual cash (12,412) (12,310) (102) (0.8) (15,602)
Gross debt3 66,704 64,166 (2,538) (4.0) 67,400
as a percentage of GDP 34.3% 33.0%     33.3%
Net debt4 39,404 39,578 174 0.4 42,078
as a percentage of GDP 20.2% 20.3%     20.8%
Total Crown        
Operating balance before gains and losses (10,167) (8,859) (1,308) (14.8) (11,098)
Operating balance (3,340) (7,178) 3,838 53.5 (9,116)
Net Worth 91,612 87,739 3,873 4.4 85,809

 

1 Using GDP for the year ended 31 December 2010 of $194,629 million (Source: Statistics New Zealand)

2 Using forecast GDP for the year ended 30 June 2011 of $202,398 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

Nicola Haslam | Macroeconomic and Fiscal Environment Portfolio
Tel: +64 4 917 6943
Fax: +64 4 471 5956
Email: nicola.haslam@treasury.govt.nz
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