Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the nine months ended 31 March 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 $167 million for the nine months to 31 March, $334 million higher than forecast, mainly reflecting higher than forecast core Crown revenue.
Core Crown revenue at $54.2 billion, was 0.4% or $206 million higher than forecast. Higher than expected core Crown tax revenue (mainly source deductions and GST), partially offset by lower than forecast interest and dividend revenue, were the main contributors to this favourable variance. In addition to this result, core Crown expenses at $54.7 billion, were $134 million (0.2%) lower than forecast.
Net losses were $3.8 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).
When these losses are combined with the OBEGAL result, the operating balance (excluding minority interests) was a deficit of $3.6 billion ($3.5 billion weaker than forecast).
The core Crown residual cash position, at a deficit of $2.6 billion, was $1.4 billion lower than forecast, primarily reflecting higher than expected tax receipts. As a consequence, net debt at $63.3 billion (25.7% of GDP) was $1.3 billion lower than forecast.
At 31 March 2016, total Crown assets were valued at $276.4 billion and liabilities were $188.2 billion while the Crown’s share of net worth stood at $82.4 billion.
The current OBEGAL surplus of $167 million compares to a deficit of $358 million at the same time last year. Core Crown tax revenue has increased by 4.3%, while core Crown expenses have grown by 2.2% over that time.
The Treasury’s updated forecasts will be released as part of the 2016 Budget Economic and Fiscal Update on 26 May 2016.
|$ million||Year to date||Full Year|
|Core Crown tax revenue||50,241||49,539||702||1.4||68,414|
|Core Crown revenue||54,229||54,023||206||0.4||74,338|
|Core Crown expenses||54,736||54,870||134||0.2||74,911|
|Core Crown residual cash||(2,552)||(3,945)||1,393||35.3||(5,398)|
|as a percentage of GDP||34.3%||35.1%||35.6%|
|as a percentage of GDP||25.7%||26.3%||26.9%|
|Operating balance before gains and losses||167||(167)||334||200.0||(401)|
|Net worth attributable to the Crown||82,431||86,351||(3,920)||(4.5)||86,862|
- Using the most recently published GDP (for the year ended 31 December 2015) of $246,080 million (Source: Statistics New Zealand).
- Using forecast GDP for the year ending 30 June 2016 of $244,923 million (Source: 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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