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Financial Statements of the Government of New Zealand for the Six Months Ended 31 December 2012

20 Feb 2013

The Financial Statements of the Government of New Zealand for the six months ended 31 December 2012 were released by the Treasury today. 

These financial statements are compared against forecast tracks based on the 2012 Half Year Economic and Fiscal Update (HYEFU), releasedon 18 December 2012.

Core Crown tax revenue at $27.3 billion was close to forecast, $31 million (0.1%) lower than expected. Both source deductions and other individuals’ tax were above forecast (by $111 million and $122 million respectively) while corporate tax was under forecast by $151 million.

Core Crown expenses were $273 million lower than forecast largely owing to Treaty settlement expenses being $186m below forecast due to complex negotiation issues not being finalised as planned during December.

The OBEGAL deficit was $158 million lower than expected at $3.2 billion, primarily reflecting the lower core Crown expenditure.

The operating balance was in surplus at $1.7 billion ($2.3 billion higher than the forecast deficit of $541 million) as net investment gains continued to be recorded by the New Zealand Superannuation Fund and ACC. ACC also recorded an actuarial gain on its liability for outstanding insurance claims, which reflected favourable changes in the discount rate and claims experience.

The residual cash deficit was $558 million below forecast at $9.2 billion as tax receipts were higher than expected ($417 million or 1.7% above forecast) and capital spending was $159 million lower than forecast.  GST contributed $220 million of the additional receipts, largely due to the timing of refunds. Source deductions were $158 million above forecast, which was in line with revenue, consistent with labour earnings growth data released earlier this month.

In addition to the residual cash result, currency in circulation was higher than forecast due increased public demand for currency over the Christmas period and resulted in net debt being $1.2 billion below forecast at $59.1 billion (28.4% of GDP).

Gross debt was $1.5 billion below forecast at $81.7 billion, or 39.2% of GDP.  While the Government bond issuance was close to forecast, a larger than expected portion of this debt was held by the Reserve Bank reducing the amount of debt held externally.

Further analysis of the December results follows.



Year to date Full Year
$ million December
2012
Actual1
December
2012
HYEFU
Forecast1
Variance
to HYEFU
$m
Variance
to HYEFU
%
June
2013
HYEFU
Forecast2
Core Crown




Core Crown tax revenue 27,338 27,369 (31) (0.1) 57,376
Core Crown revenue
29,893 29,930 (37) (0.1) 62,939
Core Crown expenses 34,136 34,409 273 0.8 71,998
Core Crown residual cash (9,236) (9,794) 558 5.7 (9,782)
Gross debt3 81,659 83,143 1,484 1.8 80,176
as a percentage of GDP 39.2% 39.9%     37.1%
Net debt4 59,100 60,280 1,180 2.0 59,998
as a percentage of GDP 28.4% 28.9%     27.8%
Total Crown          
Operating balance before gains and losses (3,191) (3,349) 158 4.7 (7,340)
Operating balance 1,709 (541) 2,250 415.9 (3,275)
Net worth 61,076 58,811 2,265 3.9 56,285

1    Using GDP for the year ended 30 September 2012 of $208,326 million (Source: Statistics New Zealand)
2    Using forecast GDP for the year ended 30 June 2013 of $216,048 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 | Office of the Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6094
Email: kamlesh.patel@treasury.govt.nz
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