The Interim Financial Statements of the Government of New Zealand for the six months ended 31 December 2019 (the financial statements) were released by the Treasury today. The financial statements are compared against forecasts based on the 2019 Half Year Economic and Fiscal Update (HYEFU 2019) published on 11 December 2019.
Core Crown tax revenue of $43.1 billion was $0.3 billion (0.6%) above forecast, primarily due to higher than forecast tobacco duties of $0.2 billion.
Core Crown expenses of $45.6 billion were close to forecast ($0.1 billion (0.1%) below forecast).
The operating balance before gains and losses (OBEGAL) was a $0.4 billion surplus, higher than the forecast deficit of $0.1 billion, primarily due to the core Crown tax revenue and expenses variances discussed above. However, we expect most of the variances are timing in nature and unlikely to persist to year-end.
When total gains and losses are added to the OBEGAL result, the operating balance was a $5.4 billion surplus, and is higher than the forecast deficit of $0.1 billion. This variance was primarily driven by an increase in the discount rates used to calculate ACC’s outstanding claims liability resulting in valuation gains of $1.2 billion, higher than the forecast losses of $2.3 billion.
Core Crown residual cash was a deficit of $7.7 billion and $0.4 billion less than the deficit forecast. Core Crown operating cash flows were $0.2 billion lower than forecast mainly due to tax receipts being favourable to forecast. Core Crown capital cash flows were $0.1 billion lower than forecast.
Net core Crown debt of $64.5 billion (21.0 % of GDP) at the end of December 2019 is $0.4 billion lower than forecast, largely due to the residual cash variance.
Gross debt at $89.1 billion (29.0% of GDP) was $0.6 billion lower than forecast. This is primarily due to favourable valuation movements in derivatives of $0.8 billion.
Total borrowings at 31 December 2019 were $120.5 billion, $1.1 billion higher than forecast, primarily due to additional third party borrowings by Kāinga Ora.
Net worth attributable to the Crown was $144.5 billion, $5.5 billion higher than forecast. The majority of this variance relates to operating balance for the first six months of the year as discussed above.
|Year to date||Full Year|
|Core Crown tax revenue||43,074||42,811||263||0.6||88,692|
|Core Crown revenue||46,718||46,508||210||0.5||95,797|
|Core Crown expenses||45,587||45,705||118||0.3||93,776|
|Core Crown residual cash||(7,653)||(8,023)||370||4.6||(5,154)|
|Net core Crown debt4||64,461||64,831||370||0.6||62,526|
|as a percentage of GDP||21.0%||21.1%||19.6%|
|as a percentage of GDP||29.0%||29.2%||28.0%|
|Operating balance before gains and losses||437||(82)||519||-||(943)|
|Operating balance (excluding minority interests)||5,426||(117)||5,543||-||422|
|Net worth attributable to the Crown||144,538||139,047||5,491||3.9||139,620|
|as a percentage of GDP||47.1%||45.3%||43.7%|
- Using the most recently published GDP (for the year ended 30 September 2019) of $307,052 million (Source: Statistics NZ).
- Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
- Using HYEFU 2019 forecast GDP for the year ending 30 June 2020 of $319,804 million (Source: The Treasury).
- Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
- Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.
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