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Media StatementFinancial Statements of the Government of New Zealand for the Five Months Ended 30 November 2009

29 Jan 2010

Colin Lynch
Deputy Secretary to the Treasury

The Financial Statements of the Government of New Zealand for the five months ended 30 November 2009 were released by the Treasury today.

The monthly financial statements were based on the 2009 Half Year Economic and Fiscal Update published on 15 December 2009.

Results for the five months ended 30 November 2009

  • Core Crown tax revenue was $0.3 billion (1.4%) higher than forecast as:
    • GST revenue was $0.3 billion (7.4%) higher than forecast. The timing of the GST due date at the end of November meant an extra day was available to process and attribute GST to November that was not forecast. We expect the variance to largely reverse in coming months and this view is supported by GST receipts which were broadly in line with forecast.
    • Corporate tax revenue was $0.1 billion (7.0%) higher than forecast mainly due to provisional tax assessments that were filed earlier than expected from taxpayers utilising tax pools.
    This higher revenue was partly offset by:
    • Source deductions tax revenue was $0.2 billion (2.3%) lower than forecast. This variance may relate to labour market outcomes or unexpected payday timing effects. The underlying reason for the variance will be clearer when labour market data becomes available in February.
    While Inland Revenue has settled its disputes with four major banks in relation to structured finance transactions, no adjustment for additional tax revenue (above the $1.4 billion recognised in the 2008/09 financial year) has been made in the November results. We expect the December financial statements (to be published on 19 February) to include any resulting revenue adjustment.
  • The operating balance before gains and losses deficit was $0.7 billion lower than forecast mainly due to the favourable variances in core Crown tax revenue ($0.3 billion) described above and Core Crown expenses ($0.3 billion lower than forecast) due to a number of individually small variances, all less than $30 million.
  • Bringing in the impact of gains and losses, the operating balance deficit was $1.1 billion lower than forecast. Net gains were $0.4 billion higher than forecast mainly due to gains on the Crown’s investment portfolios ($0.7 billion). The favourable operating balance variance flowed through to net worth, which was $0.9 billion higher than forecast.
  • Gross debt was $2.6 billion lower than forecast with Treasury bills being $1.6 billion lower than expected because market conditions meant maintaining Treasury Bill issuance below forecast levels was cost effective. In addition, RBNZ’s unsettled trade liabilities and NZDMO’s third party collateral deposits were lower than forecast ($0.6 billion and $0.5 billion respectively).
  • In contrast, net debt was close to forecast at $22.7 billion (12.3% of GDP) as the factors driving the gross debt variance had a neutral impact on the net debt position.
Year to date Full Year
$ million November
2009
Actual[1]
November
2009
HYEFU
Forecast[1]
Variance
to HYEFU
$m
Variance
to HYEFU
%
June 2010
HYEFU
Forecast[2]
Core Crown
Core Crown revenue 22,014 21,828 186 0.9 56,751
Core Crown expenses 26,002 26,307 305 1.2 65,520
Core Crown residual cash (5,275) (5,121) (154) (3.0) (10,091)
Gross debt[3] 48,076 50,667 2,591 5.1 53,651
as a percentage of GDP 26.0% 27.4%     29.1%
Net debt[4] 22,732 22,416 (316) (1.4) 27,371
as a percentage of GDP 12.3% 12.1% 14.8%
Total Crown
Operating balance before gains and (losses) (3,706) (4,382) 676 15.4 (7,465)
Operating balance (1,405) (2,488) 1,083 43.5 (4,794)
Net Worth 97,844 96,928 916 0.9 94,809
  1. Using GDP for the year ended 30 September 2009 of $184,917 million (Source: Statistics New Zealand).
  2. Using forecast GDP for the year ended 30 June 2010 of $184,466 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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