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Media StatementFinancial Statements of the Government of New Zealand for the Eleven Months Ended 31 May 2007

12 July 2007

Dr Peter Bushnell
Deputy Secretary to the Treasury

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

The 31 May 2007 monthly financial statements are compared against updated monthly forecast tracks based on the 2007 Budget Economic and Fiscal Update.

In summary, both residual cash ($0.3 billion or 13.2%) and the operating balance ($0.6 billion or 9.15) are higher than forecast. It is likely that the majority of the variances in these two indicators will remain at year end.

$ millionMay 2007
May 2007
%BEFU June
Residual cash2,2702,00526513.21,7202,985
Operating balance7,1986,5995999.16,56811,473
Gross sovereign-issued debt36,38535,9644211.237,21735,461
% of GDP22.322.00.322.622.6
Net core Crown debt4,1234,390(267)(6.1)4,6117,745
% of GDP2.52.7(0.2)2.84.9
Net core Crown debt with NZS Fund assets(8,758)(8,250)(508)6.2(8,307)(2,116)
% of GDP(5.4)(5.0)(0.4)(5.0)(1.3)
Net worth88,96188,3625990.788,46071,403

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

Item/indicator Variance Key drivers
Tax Revenue -In line with forecast.
Net investment income+$0.5 billion Mainly due to higher than expected investment returns by NZS Fund, ACC and GSF.
Core Crown expenditure (excluding net foreign exchange gains/losses)-$0.1 billion Delays in actual departmental spending of $0.1 billion.
Operating balance+$0.6 billionMainly due to delays in departmental spending, offset by write-down of tax and fines receivables above
OBERAC -$0.2 billion Mainly due to delays in departmental spending.
GSID -$0.4 billion Settlement cash levels ($8.2 billion) are higher than forecast by $0.6 billion, offset by a reduction in the issuance of Treasury Bills and Government Stock of $0.2 billion.
Net Worth +$0.6 billion Operating balance impact of the higher than expected net investment returns and delays in departmental spending.
Residual cash +$0.3 billion Higher tax receipts of $0.2 billion and delays in departmental cash spending on operating ($0.2 billion) and capital ($0.1 billion). Offset by lower sale of goods receipts ($0.2 billion).


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