MEDIA STATEMENT
Embargoed until 10:00am, Wednesday 28 February 2007
Dr Peter Bushnell
Deputy Secretary to the Treasury
The Financial Statements of the Government of New Zealand for the six months ended 31 December 2006 were released by the Treasury today.
The 31 December 2006 monthly financial statements are compared against updated monthly forecast tracks based on the 2006 Half Year Economic and Fiscal Update.
| $ million | December 2006 Actual YTD |
December 2006 Forecast YTD |
Variance $m |
HYEFU June 2007 Forecast |
June 2006 Actual |
|---|---|---|---|---|---|
| Residual cash | (423) | (860) | 437 | 107 | 2,985 |
| Operating balance | 4,470 | 3,493 | 977 | 6,260 | 11,473 |
| OBERAC | 3,590 | 3,493 | 97 | 5,768 | 8,648 |
| Gross sovereign-issued debt | 38,070 | 37,249 | 821 | 37,867 | 35,461 |
| % of GDP | 24.1 | 23.6 | 0.5 | 23.7 | 22.6 |
| Net core Crown debt | 7,085 | 7,823 | (738) | 6,382 | 7,745 |
| % of GDP | 4.5 | 5.0 | (0.5) | 4.0 | 4.9 |
| Net core Crown debt with NZS Fund assets | (4,342) | (3,370) | (972) | (6,271) | (2,116) |
| % of GDP | (2.8) | (2.1) | (0.7) | (3.9) | (1.3) |
| Net worth | 86,248 | 74,951 | 11,297 | 77,718 | 71,403 |
The following table outlines the key variances and their likely impact:
| Item/indicator | Variance | Key drivers | Impact on year end outturn |
|---|---|---|---|
| Tax Revenue | In line with forecast | - | As in the HYEFU forecast |
| Core Crown expenditure | Broadly in line with forecast | - | As in the HYEFU forecast |
| Operating balance | + $ 1 billion |
|
It is still early in the year, although investment returns are looking likely to be positive
Investment returns (or losses) in these entities are retained by the entities and are not available for redistribution |
| GSID | + $ 0.8 billion | Further increase of $1.3 billion in the settlement cash level by the Reserve Bank, taking the balance from $7.5 billion to $8.8 billion | Level raised primarily to increase settlement cash available over the Christmas period. Some uncertainty remains over long term levels and volatility |
| Net Worth | + $ 11.3 billion |
|
Ongoing increase in net worth and $140 million per annum depreciation reducing the operating balance |
| Residual cash | + $0.4 billion | Purchase of Reserve Bank reserves in forecast not taking place ($0.5 billion) | Likely that reserves levels will be lower than in the HYEFU forecast |
ENDS
Officer for enquiries:
Kamlesh Patel | Macroeconomic Group
Tel: 64 4 471-5094
Fax: 64 4 499-0992
E-mail: [email protected]