Media statement

Interim Financial Statements of the Government of New Zealand for the Eleven Months Ended 31 May 2019

The interim Financial Statements of the Government of New Zealand for the 11 months ended 31 May 2019 (the financial statements) were released by the Treasury today.  The financial statements are compared against forecasts based on the Budget Economic and Fiscal Update 2019 (BEFU 2019) published on 30 May 2019.

There are some large differences across most key fiscal indicators some of which are likely to persist until year-end. These differences are primarily a result of underlying strength in the tax take and changes in assumptions used to value the Government’s long-term liabilities. In the month of June, expenses are normally higher than revenue therefore the year-end results are likely to weaken from the May position.

Core Crown tax revenue of $79.7 billion was $2.2 billion (2.8%) above forecast. Within this, the following tax types were above forecast:

  • Other persons tax revenue ($0.9 billion) is likely to be attributable to stronger-than-expected taxable income for the 2019 tax year and the transition to the new Inland Revenue processes used to calculate tax revenue. A large portion of this variance is likely to persist to year-end.
  • Corporate tax revenue ($0.7 billion) strength is mostly owing to stronger-than-forecast taxable corporate profits and higher-than-expected Portfolio Investment Entities profits. This variance is expected to persist until year-end.
  • GST ($0.3 billion) is likely to be driven by a combination of stronger growth coming from GST revenue estimates and stronger-than-expected residential investment. We therefore expect that some, but not all, of this variance may reverse out by the end of June.

Core Crown expenses of $78.4 billion were $0.2 billion (0.4%) below forecast.

Core Crown residual cash was a deficit of $0.2 billion, that was $0.9 billion less than forecast due mainly to core Crown tax receipts being $0.6 billion higher than forecast.

Net core Crown debt at $57.0 billion, or 19.3% of GDP was $1.4 billion less than forecast as a result of the core Crown residual cash result discussed above and also circulating currency being $0.3 billion higher than forecast.

Gross debt at $84.7 billion was $1.3 billion higher than forecast. $0.9 billion of this related to movement in the value of derivatives and $0.5 billion due to unsettled trades. Both of these also affect financial assets, therefore there is no impact on net core Crown debt.

The operating balance before gains and losses (OBEGAL) was a surplus of $7.0 billion, $2.5 billion higher than forecast.  This was primarily due to the core Crown tax result discussed above.

When total net losses, of $9.7 billion, are added to the OBEGAL result, the operating balance (excluding minority interests) was a $2.5 billion deficit, $2.7 billion lower than forecast. Total net losses were $5.2 billion greater than forecast, largely due to changes in discount rates and inflation assumptions used to value long-term liabilities.

Net worth attributable to the Crown at $127.7 billion (43.1% of GDP) was $2.7 billion lower than the forecast largely due to the operating balance results, with the increases in the long-term liabilities being greater than the increases in assets.

$ million Year to date Full Year
May 2019
May 2019
BEFU 2019
BEFU 2019
BEFU 2019
June 2019
BEFU 2019
Core Crown          
Core Crown tax revenue 79,738 77,569 2,169 2.8 84,650
Core Crown revenue 86,328 83,969 2,359 2.8 91,599
Core Crown expenses 78,400 78,637 237 0.3 87,300
Core Crown residual cash (191) (1,064) 873 82.0 (2,785)
Net core Crown debt4 57,029 58,401 1,372 2.3 60,299
as a percentage of GDP 19.3% 19.7%     20.1%
Gross debt5 84,706 83,407 (1,299) (1.6) 83,287
as a percentage of GDP 28.6% 28.2%     27.8%
Total Crown          
Operating balance before gains and losses 6,961 4,476 2,485 55.5 3,465
Operating balance (excluding minority interests) (2,512) 219 (2,731) - (284)
Total borrowings 111,753 111,876 123 0.1 112,057
Net worth attributable to the Crown 127,694 130,371 (2,677) (2.1) 129,999
as a percentage of GDP 43.1% 44.0%     43.4%
  1. Using the most recently published GDP (for the year ended 31 March 2019) of $296,238 million (Source: Stats NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using BEFU 2019 forecast GDP for the year ending 30 June 2019 of $299,713 million (Source: The Treasury).
  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.
  5. Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.



Treasury Communications Team
Tel: +64 4 917 6268
Email: [email protected]