Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the eight months ended 28 February 2018 were released by the Treasury today. The statements are compared against forecasts based on the 2017 Half Year Economic and Fiscal Update (HYEFU 17) published on 14 December 2017.
Core Crown tax revenue was $50.9 billion for the eight months to 28 February 2018, higher than forecast by $0.7 billion. GST and source deductions were both above forecast by $0.3 billion and $0.2 billion, primarily as the levels of employment and residential investment being above forecast. Customs and excise duties were also above forecast by $0.2 billion. Much of this variance can be expected to remain until year end.
Core Crown expenses of $52.3 billion were close to the forecast of $52.3 billion.
The operating balance before gains and losses (OBEGAL) was a surplus of $2.9 billion. This was higher than forecast by $0.5 billion, largely driven by core Crown results.
Net investments gains were $1.4 billion higher than forecast primarily due to long-term benchmark returns being lower than the actual returns incurred in large Government investment portfolios.
When gains and losses are added to the OBEGAL result, the operating balance was a $6.2 billion surplus, $1.0 billion larger than forecast. This result flows directly into net worth attributable to the Crown which was $1.0 billion higher than forecast at $116.7 billion.
Core Crown residual cash was a deficit of $0.2 billion and was an improvement from forecast by $1.2 billion. This was largely driven by core Crown tax receipts that were $1.6 billion higher than forecast.
Net debt was $59.7 billion at 28 February 2018, $1.7 billion lower than forecast. On top of the residual cash result, circulating currency was higher than forecast.
Gross debt, however, was $0.8 billion higher than forecast primarily due to unsettled trades at month end that will reverse.
|$ million||Year to date||Full Year|
to HYEFU 17
to HYEFU 17
|Core Crown tax revenue||50,861||50,169||692||1.4||78,172|
|Core Crown revenue||54,961||54,254||707||1.3||84,670|
|Core Crown expenses||52,297||52,210||(87)||(0.2)||81,653|
|Core Crown residual cash||(174)||(1,420)||1,246||87.7||(2,647)|
|as a percentage of GDP||30.5%||30.2%||29.5%|
|as a percentage of GDP||21.1%||21.7%||21.7%|
|Operating balance before gains and losses||2,851||2,357||494||21.0||2,541|
|Net worth attributable to the Crown||116,732||115,748||984||0.9||116,568|
- Using the most recently published GDP (for the year ended 31 December 2017) of $283,465 million (Source: Statistics New Zealand).
- Using HYEFU 17 forecast GDP for the year ending 30 June 2018 of $286,391 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.
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