Media StatementFinancial Statements of the Government of New Zealand for the Six Months Ended 31 December 2008
20 Feb 2009
Dr Peter Bushnell
Deputy Secretary to the Treasury
The Financial Statements of the Government of New Zealand for the six months ended 31 December 2008 were released by the Treasury today.
December results are measured against the Pre-election Update
We are required under the Public Finance Act 1989 to report the monthly Financial Statements of Government against the latest full economic and fiscal update, which is the Pre-Election Update released last October rather than the December Update.
However, with the exception of investment losses, there is little difference between the two updates’ estimates of the year to date results to December. This difference will widen in subsequent months.
Results for the six months ended 31 December 2008
- Tax revenue is tracking below forecast by around $1.0 billion.
- The lower tax revenue means the operating balance before gains and losses (OBEGAL) at $0.1 billion is $1.1 billion lower than forecast and the residual cash deficit at -$8.3 billion is $0.9 billion lower than forecast.
- Including gains and losses the operating balance of -$6.2 billion is $8.4 billion lower than forecast (approximately $2.4 billion lower than forecast compared to the December Update). The main contributors to this lower than expected result were:
- Tax revenue was $1 billion lower than forecast.
- Investment losses were $4.9 billion higher than forecast.
- ACC recorded losses of $2.4 billion as a result of a change in the discount rate used to measure the ACC unfunded liability.
- While gross debt (GSID) is higher than forecast due to unforecast issues of Residential Mortgage Backed Securities and Treasury Bills as well as higher than forecast derivative liabilities, net core Crown debt remains lower than forecast at $5.5 billion.
| Year to date | Full Year | |||||
|---|---|---|---|---|---|---|
| December 2008 Actual[2] |
December 2008 Forecast[2] |
Variance $m |
Variance % |
PREFU June 2009 Forecast[3] |
DEFU June 2009 Forecast[4] |
|
| $ million | ||||||
| Core Crown | ||||||
| Core Crown revenue (excl. NZS Fund) [1] | 29,344 | 30,529 | (1,185) | (3.9) | 61,102 | 60,406 |
| Core Crown expenses | 30,044 | 29,873 | (171) | (0.6) | 62,359 | 62,741 |
| NZS Fund operating balance | (2,724) | 467 | (3,191) | (683.3) | 986 | (2,119) |
| Core Crown residual cash | (8,261) | (7,405) | (856) | (11.6) | (5,909) | (6,633) |
| GSID (excl. settlement cash) | 40,005 | 29,773 | (10,232) | (34.4) | 32,087 | 34,786 |
| as a percentage of GDP | 22.3% | 16.6% | 17.4% | 19.2% | ||
| Net Core Crown debt | 5,546 | 7,050 | 1,504 | 21.3 | 5,207 | 5,631 |
| as a percentage of GDP | 3.1% | 3.9% | 2.8% | 3.1% | ||
| Net Core Crown debt (incl. NZS Fund) | (5,501) | (7,085) | (1,584) | (22.4) | (10,430) | (7,244) |
| as a percentage of GDP | (3.1)% | (3.9)% | (5.7)% | (4.0)% | ||
| Total Crown | ||||||
| OBEGAL | 98 | 1,201 | (1,103) | (91.8) | (64) | (550) |
| Net gains / (losses) and other items | (6,322) | 987 | (7,309) | 1,973 | (3,779) | |
| Operating Balance | (6,224) | 2,188 | (8,412) | (384.5) | 1,909 | (4,329) |
1 For the purposes of this indicator, the NZS Fund is treated as a third party (i.e. its revenue is not included but the tax it pays is).
2 Using GDP for the year ended 30 September 2008 of $179,538 million (Source: Statistics New Zealand).
3 Using forecast GDP for the year ended 30 June 2009 of $184,390 million (Source: Treasury).
4 Using forecast GDP for the year ended 30 June 2009 of $181,139 million (Source: Treasury).
ENDSOfficer for Enquiries
Kamlesh Patel | Macroeconomic GroupTel: +64 4 917 6094
Fax: +64 4 471 5956
Email: kamlesh.patel@treasury.govt.nz
