Dr Peter Bushnell
Deputy Secretary to the Treasury
The Financial Statements of the Government of New Zealand for the seven months ended 31 January 2009 were released by the Treasury today.
Results for the seven months ended 31 January 2009#
- Tax revenue and receipts are tracking more in line with the December Update, but below the Pre-Election Update by $0.5 billion. We expect to continue to track more closely with the December Update through the 2008/09 fiscal year, as the continued deterioration in the world economic situation flows through to the New Zealand economy.
- The lower tax revenue resulted in an operating balance before gains and losses (OBEGAL) of $0.6 billion. This result is $0.8 billion lower than forecast in the Pre-Election Update and $0.3 billion lower than forecast in the December Update.
- Including gains and losses, the operating deficit of $5.5 billion was $8.1 billion lower than forecast in the Pre-Election Update and approximately $1.9 billion lower than forecast in the December Update. The main contributors to this result were lower than forecast tax revenue ($0.5 billion), higher than forecast investment losses ($3.2 billion), and actuarial losses on both the ACC outstanding claims liability ($3.1 billion) and GSF net pension liability ($0.9 billion).
- Gross sovereign-issued debt (GSID) continues to be significantly higher than forecast at $45.4 billion (25.3% of GDP) with higher than forecast issues of Reserve Bank bills (a vehicle for the Bank to manage additional long term liquidity to financial markets), Treasury Bills and derivative liabilities. Although GSID has increased, financial assets have also increased as a result, minimising the impact on net debt.
- Net debt is lower than expected at $2.3 billion (1.3% of GDP). Net debt has been reduced by positive valuation movements in financial assets and financial liabilities held by the New Zealand Debt Management Office and the Reserve Bank (driven off movements in exchange rates and interest rates). This has been partially offset by a higher than forecast residual cash deficit.
| Year to date | Full Year | |||||
|---|---|---|---|---|---|---|
| January 2009 Actual[2] |
January 2009 PREFU Forecast[2] |
Variance to PREFU $m |
Variance to PREFU % |
June 2009 PREFU Forecast[3] |
June 2009 DEFU Forecast[4] |
|
| $ million | ||||||
| Core Crown | ||||||
| Core Crown revenue (excl. NZS Fund) [1] | 34,982 | 35,840 | (858) | (2.4) | 61,102 | 60,406 |
| Core Crown expenses | 34,877 | 34,813 | (64) | (0.2) | 62,359 | 62,741 |
| NZS Fund operating balance | (2,846) | 549 | (3,395) | (618.4) | 986 | (2,119) |
| Core Crown residual cash | (5,776) | (4,707) | (1,069) | (22.7) | (5,909) | (6,633) |
| GSID (excl. settlement cash) | 45,409 | 30,039 | (15,370) | (51.2) | 32,087 | 34,786 |
| as a percentage of GDP | 25.3% | 16.7% | 17.4% | 19.2% | ||
| Net Core Crown debt | 2,289 | 4,031 | 1,742 | 43.2 | 5,207 | 5,631 |
| as a percentage of GDP | 1.3% | 2.2% | 2.8% | 3.1% | ||
| Net Core Crown debt (incl. NZS Fund) | (9,148) | (10,562) | (1,414) | (13.4) | (10,430) | (7,244) |
| as a percentage of GDP | (5.1)% | (5.9)% | (5.7%) | (4.0)% | ||
| Total Crown | ||||||
| OBEGAL | 600 | 1,439 | (839) | (58.3) | (64) | (550) |
| Net gains / (losses) and other items | (6,119) | 1,167 | (7,286) | 1,973 | (3,779) | |
| Operating Balance | (5,519) | 2,606 | (8,125) | (311.8) | 1,909 | (4,329) |
1 For the purposes of this indicator, the NZS Fund is treated as a third party (i.e. its revenue is not included but the tax it pays is).
2 Using GDP for the year ended 30 September 2008 of $179,538 million (Source: Statistics New Zealand).
3 Using forecast GDP for the year ended 30 June 2009 of $184,390 million (Source: Treasury).
4 Using forecast GDP for the year ended 30 June 2009 of $181,139 million (Source: Treasury).
ENDS
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Kamlesh Patel | Macroeconomic Group
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Tel: +64 4 917 6094
Fax: +64 4 471 5956
Email: [email protected]