The interim Financial Statements of the Government of New Zealand for the four months ended 31 October 2023 were released by the Treasury today.
The October results are reported against forecasts based on the Pre-election Economic and Fiscal Update 2023 (PREFU 2023), published on 12 September 2023 and the results for the same period for the previous year. The Half Year Economic and Fiscal Update 2023 (HYEFU 2023) will be the next fiscal forecast released by the Treasury, on 20 December 2023.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| October 2023 Actual1 $m |
October 2023 PREFU 2023 Forecast1 $m |
Variance2 PREFU 2023 $m |
Variance PREFU 2023 % |
June 2024 PREFU 2023 Forecast3 $m |
|
| Core Crown tax revenue | 38,600 | 38,349 | 251 | 0.7 | 121,602 |
| Core Crown revenue | 43,220 | 42,511 | 709 | 1.7 | 133,948 |
| Core Crown expenses | 44,729 | 45,105 | 376 | 0.8 | 139,438 |
| Core Crown residual cash | (10,389) | (8,612) | (1,777) | (20.6) | (25,442) |
| Net debt4 | 84,942 | 76,953 | (7,989) | (10.4) | 92,925 |
| as a percentage of GDP | 21.5% | 19.4% | 22.3% | ||
| Gross debt | 153,406 | 148,735 | (4,672) | (3.1) | 165,770 |
| as a percentage of GDP | 38.7% | 37.6% | 39.8% | ||
| Operating balance before gains and losses | (3,853) | (3,762) | (91) | (2.4) | (11,380) |
| Operating balance (excluding minority interests) | (6,744) | (4,072) | (2,672) | (65.6) | (7,625) |
| Net worth attributable to the Crown | 177,485 | 179,407 | (1,922) | (1.1) | 175,709 |
| as a percentage of GDP | 44.8% | 45.3% | 42.2% | ||
- Using the most recently published GDP (for the year ended 30 June 2023) of $395,896 million (Source: Stats NZ).
- Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
- Using PREFU 2023 forecast GDP for the year ending 30 June 2024 of $416,553 million (Source: The Treasury).
- 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).
Core Crown tax revenue at $38.6 billion was $0.3 billion (0.7%) above forecast. This was largely due to other direct taxes and source deduction revenue being higher than forecast by $0.4 billion and $0.1 billion, respectively. This was partly offset by customs and excise duties being $0.2 billion below forecast.
Core Crown revenue at $43.2 billion was $0.7 billion above forecast mainly due to higher-than-expected interest-bearing deposit balances held by the Reserve Bank of New Zealand.
Core Crown expenses at $44.7 billion were $0.4 billion below the forecast, with a number of under and overspends across functional spending areas (eg, health, education, core government services). At this stage most of this variance is timing in nature and is expected to unwind in the future months.
The operating balance before gains and losses (OBEGAL) was a deficit of $3.9 billion, $0.1 billion higher than the deficit forecast largely owing to the core Crown variances, partially offset by weaker-than-expected Crown entity results.
The operating balance was a deficit of $6.7 billion, $2.7 billion higher than the deficit forecast. This is mainly because of net losses on financial instruments, driven by movements in the global financial markets. This was partially offset by net gains on non-financial instruments due to a gain on the ACC outstanding claims liability reflecting increased discount rates used to value the liability.
The core Crown residual cash deficit of $10.4 billion was $1.8 billion higher than the deficit forecast. This cash deficit was primarily due to net operating cash outflows, which were higher than forecast and partially offset by net capital cash outflows, which were lower than forecast. At this stage most of this variance is timing in nature and is expected to unwind in the future months.
Net debt at $84.9 billion (21.5% of GDP), was higher than forecast by $8.0 billion. This was driven by the higher than forecast residual cash deficit components that impact net debt and losses on financial assets due to market volatility affecting the NZS Fund’s portfolio. In addition, there was higher than expected Crown entity borrowings due to ACC’s financial instruments being impacted by market volatility.
Gross debt at $153.4 billion (38.7% of GDP), was $4.7 billion higher than forecast largely due to Treasury Bills, higher currency borrowings via the issuance of Euro Commercial Paper and core Crown financial instruments which were impacted by market movements.
Net worth attributable to the Crown was $177.5 billion which was $1.9 billion lower than forecast. This variance was mostly driven by the operating balance result, and revisions to property, plant and equipment reserves for 2022/23 after the finalisation of the PREFU forecast. This was partially offset by a valuation change in the Government Superannuation Fund.