Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the six months ended 31 December 2014 were released by the Treasury today. These statements are compared against forecasts based on the Half Year Economic and Fiscal Update (HYEFU) released on 16 December 2014
Core Crown tax revenue was $323 million (1.0%) higher than the HYEFU forecast with both GST and corporate tax being higher than expected ($132 million and $124 million respectively). Although GST was $132 million higher than forecast, indicators for domestic consumption through the December quarter look to be weaker than forecast suggesting this positive variance may not persist. However, the outlook for other tax types such as source deductions is more positive, signalling some upside risk going forward.
Core Crown expenses were close to forecast at $35.8 billion.
Overall the operating balance before gains and losses (OBEGAL) was in deficit by $1.0 billion, which was $381 million better than expected, largely owing to the higher tax revenue
The operating balance (including gains and losses) was close to forecast, with a deficit of $316 million. In addition to the favourable OBEGAL result, the University of Canterbury settled its insurance claims arising from the Canterbury earthquakes, positively impacting the operating balance. Mostly offsetting this positive result, lower discount rates contributed to a higher than forecast actuarial loss on the ACC liability.
The core Crown residual cash deficit (at $7.6 billion) was $859 million higher than forecast. Operating payments were $1.4 billion higher than forecast, primarily due to payments of $1.2 billion which were due in January being paid in December due to statutory holidays. Also within this result were higher than forecast tax receipts ($292 million) and lower than forecast capital spending ($104 million).
Net debt at $66.5 billion (28.1% of GDP) was $672 million higher than forecast, largely reflecting the residual cash result. Partly offsetting this variance, currency in circulation was $177 million higher than forecast due to increased demand for currency over the Christmas period.
At 31 December, total Crown assets were valued at $258.6 billion and liabilities were $178.1 billion while the Crown’s share of net worth stood at $75.2 billion.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| $ million | December 2014 Actual1 |
December 2014 HYEFU Forecast1 |
Variance to HYEFU $m |
Variance to HYEFU % |
June 2015 HYEFU Forecast2 |
| Core Crown | |||||
| Core Crown tax revenue | 31,435 | 31,112 | 323 | 1.0 | 65,626 |
| Core Crown revenue | 34,293 | 33,868 | 425 | 1.3 | 71,466 |
| Core Crown expenses | 35,787 | 35,877 | 90 | 0.3 | 73,018 |
| Core Crown residual cash | (7,627) | (6,767) | (859) | (12.7) | (4,009) |
| Gross debt3 | 85,508 | 84,006 | (1,501) | (1.8) | 80,289 |
| as a percentage of GDP | 36.1% | 35.5% | 33.6% | ||
| Net debt4 | 66,459 | 65,787 | (672) | (1.0) | 63,494 |
| as a percentage of GDP | 28.1% | 27.8% | 26.5% | ||
| Total Crown | |||||
| Operating balance before gains and losses | (990) | (1,371) | 381 | 27.8 | (572) |
| Operating balance | (316) | (274) | (42) | (15.3) | 1,900 |
| Net worth attributable to the Crown | 75,243 | 75,238 | 5 | 0.0 | 77,376 |
- Using GDP for the year ended 30 September 2014 of $236,757 million (Source: Statistics New Zealand).
- Using forecast GDP for the year ended 30 June 2015 of $239,188 million (Source: The Treasury).
- Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.
- Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
ENDS
Officer for Enquiries
Kamlesh Patel | Office of the Government AccountantTel: +64 4 917 6094
Email: [email protected]