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Media Statement
Financial Statements of the Government of New Zealand for the Five Months Ended 30 November 2011

27 Jan 2012

Fergus Welsh
Chief Financial Officer
The Treasury

The Financial Statements of the Government of New Zealand for the Five Months Ended 30 November 2011 were released by the Treasury today.

The monthly financial statements are compared against monthly forecast tracks based on the 2011 Pre-election Economic and Fiscal Update (PREFU) published on 25 October 2011.

For the first five months of the financial year the operating balance before gains and losses (OBEGAL) deficit was $4.48 billion, which was $252 million (6.0%) higher than forecast.  This was due primarily to lower than forecast core Crown tax revenue which was $498 million (2.3%) lower than forecast.  The main tax variances were as follows:

  • source deductions were $394 million (4.4%) below forecast,
  • GST revenue was $309 million (5.1%) below forecast, and
  • corporate tax was $210 million (7.1%) above forecast

The source deductions and GST revenue variances were mainly timing-related and are expected to reverse; however there is a risk that some of the GST variance may not reverse by year end.  While corporate tax revenue was above forecast, which appears to be due to higher than expected corporate profitability, lower third-quarter GDP compared to the PREFU forecast suggests that corporate profitability may be lower than forecast by year end. So overall, there is a downside risk to tax revenue for the current year.

The operating balance (inclusive of gains and losses) deficit at $9.92 billion was $2.83 billion (39.9%) higher than forecast due to actuarial losses on the GSF ($1.04 billion) and ACC liabilities ($898 million), as well as higher than forecast investment losses ($588 million). 

Gross debt at $72.35 billion (35.6% of GDP) was $888 million lower than forecast due to lower than expected levels of collateral deposits ($1.78 billion) at balance date, partly offset by higher than expected issuances of Treasury Bills ($654 million) due to pre-funding by the NZ Debt Management Office to take advantage of favourable market conditions.  As these differences from forecast also have a corresponding impact on the Crown’s financial asset holdings, net debt came in close to forecast at $47.63 billion (23.4% of GDP).  


Year to date Full Year
$ million November
Core Crown

Core Crown tax revenue 21,415 21,913
Core Crown revenue
23,317 24,013 (696)
Core Crown expenses 28,842 29,241
Core Crown residual cash (7,479) (7,199) (280)
Gross debt3 72,352 73,240 888
as a percentage of GDP 35.6% 36.0%     37.7%
Net debt4 47,630 47,418 (212)
(0.4) 53,823
as a percentage of GDP 23.4% 23.3%     25.4%
Total Crown        
Operating balance before gains and losses (4,477) (4,225) (252) (6.0) (10,809)
Operating balance (9,921) (7,092) (2,829) (39.9) (12,601)
Net worth 71,138 73,714 (2,576)
(3.5) 68,282

1 Using GDP for the year ended 30 September 2011 of $203,340 million (Source: Statistics New Zealand)

2 Using forecast GDP for the year ended 30 June 2012 of $211,773 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


Officer for Enquiries

Nicola Haslam | Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6943
Fax: +64 4 471 5956
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