Media statement

Interim Financial Statements of the Government of New Zealand for the seven months ended 31 January 2022

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

The January results are reported against forecasts based on the Half Year Economic and Fiscal Update 2021 (HYEFU 2021),published on 15 December 2021.

The January 2022 Interim Financial Statements of the Government show most of the key fiscal indicators are better than forecast at HYEFU 2021, with OBEGAL and the operating balance showing lower deficits than expected (by $3.7 billion and $1.0 billion respectively). Net core Crown debt was $121.1 billion, which was $1.6 billion or (1.3%) lower than forecast. 

  Year to date Full Year
HYEFU 2021
HYEFU 2021
HYEFU 2021
HYEFU 2021
Core Crown          
Core Crown tax revenue 59,706 58,350 1,356 2.3 102,561
Core Crown revenue 64,589 63,037 1,552 2.5 110,733
Core Crown expenses 72,058 73,337 1,279 1.7 128,028
Core Crown residual cash (19,505) (20,676) 1,171 5.7 (34,100)
Net core Crown debt4 121,126 122,773 1,647 1.3 136,305
as a percentage of GDP 35.3% 35.7%     37.6%
Gross debt5 118,133 115,206 (2,927) (2.5) 113,973
as a percentage of GDP 34.4% 33.5%     31.4%
Total Crown          
Operating balance before gains and losses (7,999) (11,659) 3,660 31.4 (20,844)
Operating balance (excluding minority interests) (15,360) (16,341) 981 6.0 (23,826)
Total borrowings 194,122 185,404 (8,718) (4.7) 200,357
Net worth attributable to the Crown 136,206 134,948 1,258 0.9 127,282
as a percentage of GDP 39.7% 39.3%     35.1%
  1. Using the most recently published GDP (for the year ended 30 September 2021) of $343,519 million (Source: Stats NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using HYEFU 2021 forecast GDP for the year ending 30 June 2022 of $362,788 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.

Core Crown tax revenue for the seven months to 31 January 2022 was $1.4 billion (2.3%) above forecast, at $59.7 billion. The key drivers were favourable variances in corporate tax ($1.0 billion), other individuals’ tax ($0.5 billion) source deductions ($0.4 billion), and offsetting these was GST revenue which was below forecast ($0.4 billion).

Core Crown expenses at $72.1 billion, were $1.3 billion (1.7%) below forecast, mainly attributable to lower than forecast health expenditure ($0.4 billion), COVID-19 resurgence support payments ($0.4 billion) and core government services expenditure ($0.4 billion).

The operating balance before gains and losses (OBEGAL) deficit of $8.0 billion was $3.7 billion better than the forecast, mainly reflecting the core Crown results discussed above. In addition, the results of Crown entities and State-owned enterprises were stronger than forecast by $0.5 billion and $0.3 billion respectively.

When total gains and losses are added to the OBEGAL result, the operating balance was a $15.4 billion deficit, which was $1.0 billion lower than the deficit forecast. The key drivers of the net gains and losses variance were:

  • Net losses on financial instruments were $1.9 billion higher than forecast largely due to returns on the Crown’s investment portfolios (New Zealand Superannuation Fund and ACC), as investment returns were lower than forecast.
  • Net losses on non-financial instruments were $0.5 billion higher than forecast primarily due to the losses on the Emissions Trading Scheme liability which was $1.5 billion higher than forecast owing to increased carbon prices. These losses were partially offset by the ACC outstanding claims liability valuation loss which was $0.7 billion less than forecast due to changes in the actuarial assumptions used to calculate the claims liability.

The core Crown residual cash deficit of $19.5 billion was lower than forecast by $1.2 billion. Net operating cash outflows were $0.3 billion lower than forecast, largely owing to lower operating payments. Core Crown capital payments were lower than expected by $0.8 billion, driven by lower than forecast uptake of the Reserve Bank’s Funding for Lending Programme (FLP).

Net core Crown debt was $121.1 billion (35.3% of GDP) at 31 January 2022, below forecast by $1.6 billion due to the core Crown residual cash variance described above and issuance of circulating currency being $0.4 billion more than forecast. When FLP advances are included, net core Crown debt was $113.5 billion (33.0% of GDP), $0.8 billion below forecast.

Gross debt at $118.1 billion (34.4% of GDP) was $2.9 billion higher than forecast. This is owing to issuances of $2.2 billion in euro-commercial paper which was not forecast and financial instrument valuations.

Net worth attributable to the Crown was $136.2 billion at 31 January 2022, $1.3 billion higher than forecast. Most of this variance relates to the operating balance discussed above.



Treasury Communications Team
Email: [email protected]