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Media StatementFinancial Statements of the Government of New Zealand for the Eleven Months Ended 31 May 2010

12 Jul 2010

Colin Lynch
Deputy Secretary to the Treasury

The Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2010 were released by the Treasury today.

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

Overall, the operating balance before gains and losses for the year to the end of May was a deficit of $4.7 billion.  This deficit was $1.1 billion smaller than expected with tax revenue slightly ahead of forecast and expenditure slightly below.

The Crown’s net debt stood at $25.4 billion, or 13.6% of GDP, which was in line with forecasts. 

Looking to the full year to 30 June, we expect tax revenue to remain close to forecast while there is a risk that expenses may come in marginally below expected levels.  Net debt is expected to come in close to forecast.  Meanwhile, lower than expected investment returns driven by the recent weakening in equity markets are likely to push the operating balance deficit higher than expected.

Year to date Full Year
$ million May
2010
Actual1
May 2010
BEFU
Forecast1
Variance
to BEFU
$m
Variance
to BEFU
%
June 2010
BEFU
Forecast2
Core Crown
Core Crown tax revenue 46,568 46,325 243 0.5 50,652
Core Crown revenue 51,687 51,488 199 0.4 56,406
Core Crown expenses 57,754 58,312 558 1.0 64,791
Core Crown residual cash (7,734) (7,820) 86 1.1 (9,069)
Gross debt3 52,636 53,321 685 1.3 53,810
   as a percentage of GDP 28.1% 28.5% 28.4%
Net debt4 25,388 25,410 22 0.1 26,642
   as a percentage of GDP 13.6% 13.6% 14.1%
Total Crown
Operating balance before gains and losses (4,742) (5,820) 1,078 18.5 (6,927)
Operating balance (2,156) (2,083) (73) (3.5) (3,179)
Net Worth 97,274 97,208 66 0.1 96,479

1 Using GDP for the year ended 31 March 2010 of $187,362 million (Source: Statistics New Zealand)

2 Using forecast GDP for the year ended 30 June 2010 of $189,526 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 | Macroeconomic and Fiscal Environment Portfolio
Tel: +64 4 917 6094
Fax: +64 4 471 5956
Email: kamlesh.patel@treasury.govt.nz
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