Financial Statements of the Government of New Zealand for the Eight Months Ended 29 February 2016

Paul Helm, Chief Government Accountant

The Financial Statements of the Government of New Zealand for the eight months ended 29 February 2016 were released by the Treasury today.  The statements are compared against forecasts based on the 2015 Half Year Economic and Fiscal Update (HYEFU) published in December.

The operating balance before gains and losses (OBEGAL) was a surplus of $398 million for the eight months to 29 February, $730 million higher than forecast.

Core Crown revenue at $48.1 billion was $606 million higher than forecast with higher than expected core Crown tax revenue (mainly GST, corporate tax and source deductions), partially offset by lower than forecast interest revenue, being the main contributor to this favourable variance. In addition to this result, core Crown expenses, at $48.4 billion, were close to forecast.

Net losses were $5.3 billion higher than forecast due to higher than expected actuarial losses on the ACC claims liability (reflecting the impact of changes in valuation assumptions used compared to forecast) and higher than expected losses on financial instruments due to unfavourable market conditions.

When these gains and losses are combined with the OBEGAL result, the operating balance (excluding minority interests) was a deficit of $5.1 billion ($4.6 billion greater than forecast).

The core Crown residual cash position, at a deficit of $1.5 billion, was $1.6 billion lower than forecast, primarily reflecting higher than expected tax receipts, resulting in net debt also being lower than forecast at $62.4 billion (25.3% of GDP).

At 29 February 2016, total Crown assets were valued at $275.3 billion and liabilities were $188.3 billion while the Crown's share of net worth stood at $81.2 billion.

The current OBEGAL surplus of $398 million compares to a deficit of $269 million at the same time last year. Core Crown tax revenue has increased by 5.3%, while core Crown expenses have grown by 3.0%, over that time.

1. Using the most recently published GDP (for the year ended 31 December 2015) of $246,080 million (Source: Statistics New Zealand).
2. Using forecast GDP for the year ending 30 June 2016 of $244,923 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. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.

ENDS