Media statement

Interim Financial Statements of the Government of New Zealand for the nine months ended 31 March 2020

The interim Financial Statements of the Government of New Zealand for the nine months ended 31 March 2020 (the financial statements) were released by the Treasury today. The financial statements are compared against forecasts based on the 2019 Half Year Economic and Fiscal Update (HYEFU 2019) published on 11 December 2019.

This is the last month that monthly actual results are compared against the HYEFU 2019 forecasts, as the April 2020 actual results will be compared against 2020 Budget Economic and Fiscal Update (BEFU 2020).

The March results only show a small proportion of the expected impacts of COVID-19 and the Government’s response to COVID-19. The wage subsidy scheme had the largest impact increasing expenditure by $3.9 billion.

Core Crown tax revenue was $65.9 billion, $0.4 billion (0.7%) above forecast. This is mainly owing to higher than forecast source deductions, GST and customs and excise duties reflecting the growing economy prior to COVID-19. Core Crown tax receipts were $0.5 billion below forecast as these start to show some of the impacts related to COVID-19.

Core Crown expenses were $72.5 billion, $4.4 billion above forecast. As a response to COVID-19, $3.9 billion of wage subsidies were paid and $0.1 billion was paid as a support for District Health Boards and primary health organisations.

The operating balance before gains and losses (OBEGAL) was a $2.7 billion deficit, $4.0 billion lower than the forecast surplus. The variance mainly relates to core Crown expenses being $4.4 billion unfavourable to forecast which was partly offset by core Crown revenue being $0.5 billion higher than forecast.  

When total gains and losses are added to the OBEGAL result, the operating balance was a $9.8 billion deficit, $11.9 billion lower than forecast. Total net losses were $7.2 billion, $8.0 higher than forecast, mainly due to unfavourable changes in market prices, primarily relating to NZS Fund and ACC.

Core Crown residual cash was a deficit of $9.6 billion, $5.2 billion higher than the deficit forecast. This is owing to core Crown expenses being higher than forecast and tax receipts being lower than forecast as discussed above.

Net core Crown debt of $66.4 billion (21.3% of GDP) was $4.2 billion higher than forecast largely due to the residual cash variance discussed above. This was partly offset by issue of circulating currency and by favourable changes in exchange rates.

Gross debt at $94.0 billion (30.2% of GDP) was $2.1 billion higher than forecast primarily due to core Crown derivatives in loss increasing from forecast by around $1.8 billion. These mostly reflect changes in the market since the monthly forecasts were completed. There are also more Treasury Bills on issue.

Total borrowings at 31 March 2020 were $144.7 billion, $21.6 billion higher than forecast, primarily owing to increased settlement deposits with the Reserve Bank ($13.6 billion). The Reserve Bank is putting more cash into the system mainly using short term foreign exchange swaps to lower interest rates. Derivatives in loss increased from forecast by $5.8 billion due to market conditions changing since the forecast was prepared.

Net worth attributable to the Crown was $129.5 billion, $11.8 billion lower than forecast. The majority of this variance relates to the operating balance for the first nine months of the year as discussed above.

Key indicators for the nine months ended 31 March 2020 compared to HYEFU 2019
  Year to date Full Year
March 2020
March 2020
HYEFU 2019
HYEFU 2019
HYEFU 2019
June 2020
HYEFU 2019
Core Crown          
Core Crown tax revenue 65,854 65,409 445 0.7 88,692
Core Crown revenue 71,237 70,743 494 0.7 95,797
Core Crown expenses 72,504 68,091 (4,413) (6.5) 93,776
Core Crown residual cash (9,567) (4,346) (5,221) (120.1) (5,154)
Net core Crown debt4 66,380 62,215 (4,165) (6.7) 62,526
as a percentage of GDP 21.3% 20.0%     19.6%
Gross debt5 93,950 91,820 (2,130) (2.3) 89,575
as a percentage of GDP 30.2% 29.5%     28.0%
Total Crown          
Operating balance before gains and losses (2,687) 1,347 (4,034) (299.5) (943)
Operating balance (excluding minority interests) (9,830) 2,088 (11,918) 422
Total borrowings 144,719 123,096 (21,623) (17.6) 122,161
Net worth attributable to the Crown 129,497 141,301 (11,804) (8.4) 139,620
as a percentage of GDP 41.6% 45.4%     43.7%
  1. Using the most recently published GDP (for the year ended 31 December 2019) of $311,034 million (Source: Statistics NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using HYEFU 2019 forecast GDP for the year ending 30 June 2020 of $319,804 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
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