Media statement

Interim Financial Statements of the Government of New Zealand for the six months ended 31 December 2022

The interim Financial Statements of the Government of New Zealand for the six months ended 31 December 2022 were released by the Treasury today.

The December results are reported against forecasts based on the Half Year Economic and Fiscal Update 2022 (HYEFU 2022), published on 14 December 2022 and the results for the same period for the previous year.

  Year to date Full Year
HYEFU 2022
HYEFU 2022
HYEFU 2022
HYEFU 2022
Core Crown tax revenue 54,510 54,885 (375) (0.7) 118,061
Core Crown revenue 60,459 60,870 (411) (0.7) 130,193
Core Crown expenses 62,014 61,727 (287) (0.5) 129,331
Core Crown residual cash (26,959) (22,933) (4,026) (17.6) (25,364)
Net debt4 80,472 79,409 (1,063) (1.3) 78,655
          as a percentage of GDP 21.6% 21.3%     19.9%
Gross debt 133,155 132,961 (194) (0.1) 138,989
          as a percentage of GDP 35.7% 35.6%     35.2%
Operating balance before gains and losses (2,847) (2,808) (39) (1.4) (3,631)
Operating balance (excluding minority interests) (1,316) (2,599) 1,283 49.4 (725)
Total borrowings 230,003 226,643 (3,360) (1.5) 229,918
Net worth attributable to the Crown 166,108 164,696 1,412 0.9 166,246
          as a percentage of GDP 44.5% 44.1%     42.1%
  1. Using the most recently published GDP (for the year ended 30 September 2022) of $373,329 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 2022 forecast GDP for the year ending 30 June 2023 of $394,778 million (Source: The Treasury).
  4. The net debt indicator includes core Crown advances, Crown entity borrowings (excluding Kiwi Group) and the financial assets and borrowings of the New Zealand Super Fund (NZS Fund).

Core Crown tax revenue for the six months ended 31 December 2022 was $0.4 billion below forecast at $54.5 billion, with this variance spread across a number of tax types.

Core Crown expenses at $62.0 billion were $0.3 billion (0.5%) higher than forecast, with a number of offsetting variances across spending areas. The most notable variance related to finance costs being higher than forecast by $0.4 billion, with the key driver being interest costs on settlement deposits (which are a floating rate debt), reflecting a higher-than-forecast interest rate track.

The operating balance before gains and losses (OBEGAL) deficit of $2.8 billion was close to the forecast deficit. The core Crown tax revenue and expenses (discussed above), which overall were unfavourable to the OBEGAL result were offset by stronger than expected SOE and CE results. When total gains and losses are added to the OBEGAL result, the operating balance deficit was $1.3 billion, which was $1.3 billion lower than expected, largely reflecting valuation changes in assets and liabilities driven by market conditions.

The core Crown residual cash deficit of $27.0 billion was $4.0 billion more than the deficit forecast. This was predominantly due to net operating cash outflows which were $3.7 billion higher than forecast, as payments were made earlier than anticipated due to the holiday period. This variance is largely expected to unwind in January. In addition, interest payments were $0.3 billion higher than forecast which is largely in line with the core Crown finance costs variance.

Net debt was $80.5 billion (21.6% of GDP), higher than forecast by $1.1 billion. The higher net operating cash outflows of $3.7 billion (mentioned above), was partially offset by stronger results by the NZS Fund of around $2.3 billion and the higher issuances of circulating currency of $0.4 billion.

Gross debt at $133.2 billion (35.7% of GDP), was close to forecast.

Total borrowings at $230.0 billion were higher than forecast by $3.4 billion (1.5%). This variance comprises of higher settlement deposits held with the Reserve Bank ($4.0 billion), greater than expected issuances of Reserve Bank bills ($3.2 billion) offset by lower-than-forecast derivative liabilities (reflecting market conditions).

Net worth attributable to the Crown at $166.1 billion was $1.4 billion higher than forecast largely reflecting the operating balance variance mentioned above.



Treasury Communications Team
Email: [email protected]