Media statement

Interim Financial Statements of the Government of New Zealand for the eight months ended 28 February 2023

The interim Financial Statements of the Government of New Zealand for the eight months ended 28 February 2023 were released by the Treasury today.

The February results are reported against forecasts based on the Half Year Economic and Fiscal Update 2022 (HYEFU 2022), published on 14 December 2022 and the results for the same period for the previous year.

  Year to date Full Year
HYEFU 2022
HYEFU 2022
HYEFU 2022
HYEFU 2022
Core Crown tax revenue 73,255 74,288 (1,033) (1.4) 118,061
Core Crown revenue 80,553 81,953 (1,400) (1.7) 130,193
Core Crown expenses 81,663 82,473 810 1.0 129,331
Core Crown residual cash (20,334) (20,033) (301) (1.5) (25,364)
Net debt4 71,868 76,217 4,349 5.7 78,655
          as a percentage of GDP 18.9% 20.0%     19.9%
Gross debt 138,090 134,767 (3,323) (2.5) 138,989
          as a percentage of GDP 36.3% 35.4%     35.2%
Operating balance before gains and losses (3,212) (2,618) (594) (22.7) (3,631)
Operating balance (excluding minority interests) 3,955 (1,460) 5,415 370.9 (725)
Total borrowings 227,734 227,241 (493) (0.2) 229,918
Net worth attributable to the Crown 172,134 165,790 6,344 3.8 166,246
          as a percentage of GDP 45.3% 43.6%     42.1%
  1. Using the most recently published GDP (for the year ended 31 December 2022) of $380,326 million (Source: Stats NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using HYEFU 2022 forecast GDP for the year ending 30 June 2023 of $394,778 million (Source: The Treasury).
  4. The net debt indicator includes core Crown advances, Crown entity borrowings (excluding Kiwi Group Capital) and the financial assets and borrowings of the New Zealand Super Fund (NZS Fund). Net core Crown advances (the previous headline indicator) was $150.1 billion (39.5% of GDP) at 28 February 2023, the forecast at 28 February 2023 was $150.0 billion (39.4% of GDP) and the forecast for 30 June 2023 is $154.6 billion (39.2% of GDP).

Core Crown tax revenue at $73.3 billion, was $1.0 billion below forecast. This is due to lower GST revenue ($0.5 billion), other individuals’ tax ($0.3 billion), source deductions ($0.2 billion) and customs and excise duties, primarily attributable to weaker than forecast consumption, labour market and business profits. These variances were partially offset by other direct taxes which were $0.2 billion higher than forecast.

Core Crown revenue was at $80.6 billion, $1.4 billion lower than forecast, largely due to core Crown tax revenue and the lower than forecast Emissions Trading Scheme (ETS) revenue ($0.7 billion) as the price of NZUs remains below forecast. These were partially offset by higher interest revenue of $0.3 billion.

Core Crown expenses at $81.7 billion, were $0.8 billion lower than forecast. This is largely attributable to lower than forecast expenses on health ($0.6 billion), primarily due to lower COVID-19 spending, and a range of other lower expenses including core government services ($0.4 billion), social security services ($0.3 billion), environmental protection ($0.3 billion), housing and community development ($0.3 billion) and economic and industrial services ($0.3 billion). These were partly offset by core Crown finance costs ($0.5 billion) which have increased as a result of higher than anticipated interest rates.

The operating balance before gains and losses (OBEGAL) deficit of $3.2 billion was $0.6 billion higher than the forecast of $2.6 billion, largely as a result of the core Crown variances.

The operating balance was $4.0 billion in surplus, $5.4 billion better than the forecasted deficit. The improvement in the operating balance was largely driven by gains on the valuation of financial and non-financial assets and liabilities.

The core Crown residual cash deficit of $20.3 billion was $0.3 billion higher than forecast, primarily driven by higher than forecast net operating cash outflows due to tax receipts being lower than forecast and differences in the timing of operating payments being made.

Net debt at $71.9 billion (18.9% of GDP), was lower than forecast by $4.3 billion. $4.0 billion is attributable to favourable movements in the fair value of financial assets and liabilities (which includes the NZS Fund) and $0.6 billion was due to lower than forecast borrowings by Crown entities. Partially offsetting these were the core Crown residual cash deficit, which is $0.3 billion more than forecast.

Gross debt at $138.1 billion (36.3% of GDP), was $3.3 billion higher than forecast due to several offsetting factors including Government bonds, foreign currency borrowing, higher RBNZ operating balances and unsettled trades being above forecast. This was partially offset by lower than forecast core Crown derivative liabilities and lower International Monetary Fund liabilities.

Net worth attributable to the Crown was $172.1 billion which was $6.3 billion higher than forecast. $5.4 billion of this variance relates to the favourable operating balance and $1.2 billion relates to the revaluation of electricity generation assets.



Treasury Communications Team
Email: [email protected]