Media statement

Interim Financial Statements of the Government of New Zealand for the four months ended 31 October 2022

The interim Financial Statements of the Government of New Zealand for the four months ended 31 October 2022 (the financial statements) were released by the Treasury today.

The October results are reported against forecasts based on the Budget Economic and Fiscal Update 2022 (BEFU 2022), published on 19 May 2022.

Most key indicators were close to forecast at 31 October 2022, with the most notable variances being driven by changes to market conditions since BEFU 2022. These market changes are the key driver of the operating balance deficit and net debt being higher-than-forecast.

  Year to date Full Year
BEFU 2022
BEFU 2022
BEFU 2022
BEFU 2022
Core Crown tax revenue 36,211 36,273 (62) (0.2) 116,098
Core Crown revenue 39,951 39,632 319 0.8 125,700
Core Crown expenses 41,759 41,244 (515) (1.2) 127,051
Core Crown residual cash (12,795) (11,518) (1,277) (11.1) (29,280)
Net debt4 70,120 66,599 (3,521) (5.3) 74,972
          as a percentage of GDP 19.5% 18.5%     18.7%
Gross debt 129,187 121,004 (8,183) (6.8) 130,219
          as a percentage of GDP 35.9% 33.7%     32.4%
Operating balance before gains and losses (2,789) (3,063) 274 8.9 (6,634)
Operating balance (excluding minority interests) (2,864) (1,647) (1,217) (73.9) (1,632)
Total borrowings 217,542 211,932 (5,610) (2.6) 230,618
Net worth attributable to the Crown 164,861 122,337 42,524 34.8 122,401
          as a percentage of GDP 45.9% 34.0%     30.5%
  1. Using the most recently published GDP (for the year ended 30 June 2022) of $359,476 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 2022 forecast GDP for the year ending 30 June 2023 of $401,466 million (Source: The Treasury).
  4. The net debt indicator includes core Crown advances, Crown entity borrowings and the financial assets and borrowings of the New Zealand Super Fund (NZS Fund). Net core Crown debt (the previous headline indicator) was $141.7 billion (39.4% of GDP) at 31 October 2022, the forecast at 31 October was $145.2 billion (40.4% of GDP) and the forecast for 30 June 2023 is $163.7 billion (40.8% of GDP).

Core Crown tax revenue for the four months ended 31 October 2022 was close to forecast at $36.2 billion. Continued strength in the labour market has resulted in source deductions being higher than forecast by $0.6 billion, however this was offset by lower than forecast revenue from GST, fuel excise duty and road user charges.  

An increase in New Zealand Emissions Trading Scheme revenue owing to an increase in the New Zealand Unit price and a higher-than-expected interest rate track has meant that overall core Crown revenue was above forecast by $0.3 billion.

Core Crown expenses at $41.8 billion were $0.5 billion (1.2%) above forecast. This was largely driven by higher finance costs, health, and transport related expenses, partially offset by lower than forecast expenditure on housing and economic and industrial services.

The operating balance before gains and losses (OBEGAL) deficit of $2.8 billion was largely in line with forecast. When total gains and losses are added to the OBEGAL result, the operating balance deficit was $2.9 billion, $1.2 billion greater than the deficit forecast, largely reflecting changes in market conditions.  

The core Crown residual cash deficit of $12.8 billion was $1.3 billion above forecast. Net operating cash flows were $1.8 billion above forecast, spread across a number of areas. While net capital cash flows were lower than forecast by $0.6 billion, largely timing in nature.

As at 31 October 2022, net debt was $70.1 billion (19.5% of GDP), $3.5 billion higher than forecast. The variance is primarily a result of market movements impacting financial instruments (e.g. New Zealand Super Fund investment portfolio) since the completion of the BEFU 2022 forecasts. The stronger residual cash position reported at 30 June 2022 has partly offset the impact from market movements.

Both gross debt ($129.2 billion or 35.9% of GDP) and total borrowing ($217.5 billion), were higher than forecast due to a range of factors, including derivative liabilities being higher than forecast, repurchase of government bonds that did not occur as expected and higher than expected borrowings.

Net worth attributable to the Crown at $164.9 billion was $42.5 billion higher than forecast, predominately owing to the stronger starting position, reflecting the results reported at 30 June 2022.



Treasury Communications Team
Email: [email protected]