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Media statement

Financial Statements of the Government of New Zealand for the Six Months Ended 31 December 2018

Issue date: 
Thursday, 7 February 2019
Corporate author: 

Paul Helm, Chief Government Accountant

The Financial Statements of the Government of New Zealand for the six months ended 31 December 2018 were released by the Treasury today. The statements are compared against forecasts based on the Half Year Economic and Fiscal Update 2018 (HYEFU 2018) published on 13 December 2018.

Core Crown tax revenue at $40.0 billion was $0.2 billion (0.4%) ahead of forecast.  Within this, GST and customs and excise duties were both higher than forecast partially offset by corporate and other individuals tax revenue, which were below forecast.

Core Crown expenses of $42.3 billion were $0.4 billion (0.9%) below forecast. Of this, around $0.2 billion related to education expenses which were lower than forecast as a result of demand-driven factors across all sectors.  Social assistance benefits and impairments of sovereign receivables together made up $0.1 billion of the core Crown expense variance while just under $0.1 billion related to KiwiBuild. These underspends are likely to be timing in nature.

The operating balance before gains and losses (OBEGAL) was a surplus of $1.1 billion, $0.3 billion higher than forecast.  This was largely driven by the core Crown results offset by lower than forecast Crown entity and SOE results for the period. 

When net losses of $6.8 billion are added to the OBEGAL result the operating balance was a $5.6 billion deficit, $6.2 billion less than the forecast surplus:

  • Net investment losses were $3.1 billion at 31 December 2018, largely due to unfavourable changes in market prices and foreign currency exchange losses due to the movement in the NZD since the forecasts were prepared.
  • Net losses on non-financial instruments (eg, GSF and ACC liabilities) of $3.7 billion were primarily driven by changes to discount rate assumptions used to calculate the ACC claims liability at 31 December.

Core Crown residual cash was a deficit of $7.3 billion, $0.5 billion greater than forecast with operating cash flows being lower by $0.2 billion and higher capital spending of $0.3 billion.

Net core Crown debt at $64.1 billion, or 22.1% of GDP, was $0.1 billion higher than forecast. While the residual cash deficit was higher than expected (directly impacting net debt), increases in issues of circulating currency have offset much of this variance, resulting in net debt being close to forecast at the end of December.

Net worth attributable to the Crown (NWAC) was $124.5 billion, $6.3 billion lower than forecast at HYEFU 2018. The majority of this variance relates to the current operating balance deficit for the period.

$ million Year to date Full Year
December 2018
December 2018
HYEFU 2018
HYEFU 2018
HYEFU 2018
June 2019
HYEFU 2018
Core Crown          
Core Crown tax revenue 40,000 39,836 164 0.4 84,325
Core Crown revenue 43,482 43,394 88 0.2 91,323
Core Crown expenses 42,333 42,732 399 0.9 88,669
Core Crown residual cash (7,258) (6,757) (501) (7.4) (4,993)
Net core Crown debt4 64,145 64,064 (81) (0.1) 62,677
as a percentage of GDP 22.1% 22.0%     20.9%
Gross debt5 89,364 89,164 (200) (0.2) 82,767
as a percentage of GDP 30.7% 30.7%     27.6%
Total Crown          
Operating balance before gains and losses 1,110 859 251 29.2 1,724
Operating balance (excluding minority interests) (5,612) 558 (6,170) 3,112
Total borrowings 116,523 116,673 150 0.1 111,369
Net worth attributable to the Crown 124,502 130,792 (6,290) (4.8) 133,480
  1. Using the most recently published GDP (for the year ended 30 September 2018) of $290,902 million (Source: Stats NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using HYEFU 18 forecast GDP for the year ending 30 June 2019 of $300,168 million (Source: The Treasury).
  4. Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
  5. Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.



Jayne Winfield | Office of the Government Accountant
Tel: +64 4 890 7205
Email: [email protected]
Last updated: 
Thursday, 7 February 2019