Media statement

Interim Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2020

The interim Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2020  (the financial statements) were released by the Treasury today. The financial statements are compared against forecasts based on the 2020 Budget Economic and Fiscal Update (BEFU 2020) published on 14 May 2020. This will be the last monthly financial results of the Government published until the audited FSG for the year ended 30 June 2020 are published in early October 2020.

The May results indicate that the year end results for tax revenue will be stronger and some expenditure will be below what was forecast at BEFU 2020.

Core Crown tax revenue was $79.0 billion, $1.5 billion (1.9%) above forecast. This is mainly owing to higher than forecast GST revenue, which was not as adversely affected by lower economic activity as assumed in the GST forecast. We expect that some of this strength in tax will persist to 30 June 2020.

Core Crown expenses were $97.3 billion, $0.1 billion lower than forecast. The key variances for May were the Wage Subsidy Scheme ($1.3 billion) and Business Finance Guarantee Scheme ($0.5 billion) which were both lower than forecast and both variances are expected to persist until year end. This has been offset by decisions made since the BEFU 2020 forecast was completed, such as the Small Business Cashflow Scheme ($0.7 billion) and tertiary provider funding ($1.2 billion) which were not forecast in May.

The operating balance before gains and losses (OBEGAL) was a $16.0 billion deficit, $1.6 billion less than the deficit forecast mainly reflecting the core Crown results discussed above.

When total net losses are added to the OBEGAL result, the operating balance (excluding minority interests) was a $27.1 billion deficit, $1.1 billion above the forecast deficit. Losses on non-financial instruments were $8.6 billion above forecast mainly owing to losses on the ACC outstanding claims liability as a result of a drop in discount rates. This variance was partly offset by lower than forecast losses on financial instruments of $6.0 billion, mainly driven by the rebound in equity markets in May.

Core Crown residual cash was a deficit of $19.8 billion, $0.2 billion lower than the forecast deficit.

Net core Crown debt of $78.7 billion (25.1% of GDP), was $1.3 billion above forecast mainly due to higher than forecast repurchase losses on the Reserve Bank’s Large Scale Asset Purchases ($1.3 billion), partially offset by the residual cash deficit variance.

Gross debt at $94.5 billion (30.1% of GDP) was $1.7 billion above forecast.

Total borrowings at 31 May 2020 were $149.2 billion, $2.7 billion lower than forecast mainly owing to lower than forecast settlement deposits with Reserve Bank ($3.1 billion). This was due to less cash held by the private sector as a result of the sector purchasing more Government debt (eg, Treasury bills and Government bonds).

Net worth attributable to the Crown was $110.0 billion, $1.1 billion lower than forecast. The majority of this variance relates to the operating balance for the first eleven months of the year as discussed above.

Key indicators for the eleven months ended 31 May 2020 compared to BEFU 2020
  Year to date Full Year
May 2020
May 2020
BEFU 2020
BEFU 2020
BEFU 2020
June 2020
BEFU 2020
Core Crown          
Core Crown tax revenue 78,950 77,467 1,483 1.9 82,330
Core Crown revenue 85,257 83,907 1,350 1.6 89,474
Core Crown expenses 97,341 97,393 52 0.1 113,998
Core Crown residual cash (19,784) (19,998) 214 1.1 (32,031)
Net core Crown debt4 78,666 77,389 (1,277) (1.6) 88,935
as a percentage of GDP 25.1% 24.6%     30.2%
Gross debt5 94,537 92,811 (1,726) (1.9) 99,771
as a percentage of GDP 30.1% 29.6%     33.9%
Total Crown          
Operating balance before gains and losses (15,965) (17,544) 1,579 9.0 (28,293)
Operating balance (excluding minority interests) (27,103) (25,997) (1,106) (4.3) (37,115)
Total borrowings 149,207 151,908 2,701 1.8 164,799
Net worth attributable to the Crown 109,963 111,022 (1,059) (1.0) 100,093
as a percentage of GDP 35.0% 35.4%     34.0%
  1. Using the most recently published GDP (for the year ended 31 March 2020) of $314,026 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 2020 forecast GDP for the year ending 30 June 2020 of $294,207 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]