The interim Financial Statements of the Government of New Zealand for the three months ended 30 September 2023 were released by the Treasury today.
The September 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 released before Christmas 2023.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| September 2023 Actual1 $m |
September 2023 PREFU 2023 Forecast1 $m |
Variance2 PREFU 2023 $m |
Variance PREFU 2023 % |
June 2024 PREFU 2023 Forecast3 $m |
|
| Core Crown tax revenue | 28,508 | 28,199 | 309 | 1.1 | 121,602 |
| Core Crown revenue | 31,994 | 31,304 | 690 | 2.2 | 133,948 |
| Core Crown expenses | 33,364 | 33,471 | 107 | 0.3 | 139,438 |
| Core Crown residual cash | (7,922) | (6,688) | (1,234) | (18.5) | (25,442) |
| Net debt | 81,382 | 75,736 | (5,646) | (7.5) | 92,925 |
| as a percentage of GDP | 20.6% | 19.1% | 22.3% | ||
| Gross debt | 149,745 | 147,332 | (2,413) | (1.6) | 165,770 |
| as a percentage of GDP | 37.8% | 37.2% | 39.8% | ||
| Operating balance before gains and losses | (2,502) | (2,725) | 223 | 8.2 | (11,380) |
| Operating balance (excluding minority interests) | (3,918) | (3,492) | (426) | (12.2) | (7,625) |
| Net worth attributable to the Crown | 179,499 | 179,990 | (491) | (0.3) | 175,709 |
| as a percentage of GDP | 45.3% | 45.5% | 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).
Core Crown tax revenue at $28.5 billion was $0.3 billion (1.1%) above forecast. This was largely due corporate tax revenue and resident withholding tax being higher than forecast by $0.3 billion and $0.2 billion, respectively.
Core Crown revenue at $32.0 billion was $0.7 billion (2.4%) above forecast mainly due to higher tax and interest revenue.
Core Crown expenses at $33.4 billion were close to forecast. While there are a number of under and overspends across spending areas, it is anticipated that most of these variances are timing in nature at this stage.
The operating balance before gains and losses (OBEGAL) was a deficit of $2.5 billion, $0.2 billion less than the deficit forecast. This is largely owing to the core Crown variances, partially offset by lower-than-expected Crown entity results.
The operating balance was a deficit of $3.9 billion, $0.4 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 as a result of increased discount rates which are used to value the liability.
The core Crown residual cash deficit of $7.9 billion was $1.2 billion higher than the deficit forecast. This cash deficit was primarily due to net operating cash outflows, which were higher than forecast, 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 $81.4 billion (20.6% of GDP) was higher than forecast by $5.7 billion. This was driven by the higher than forecast residual cash deficit and losses on financial assets due to market volatility affecting the NZS fund’s portfolio. In addition, higher than expected Crown entity borrowings largely due to ACC’s derivative financial instruments were impacted by market volatility.
Gross debt at $149.8 billion (37.8% of GDP) was $2.4 billion higher than forecast. This was mainly due to higher-than-expected Treasury Bills which were higher than forecast by $1.7 billion and is timing in nature, and core Crown derivatives which were $1.2 billion higher than forecast and were impacted by market movements.
Net worth attributable to the Crown was $179.5 billion which was $0.5 billion lower than forecast. This variance was mostly driven by revisions to property, plant and equipment reserves for 2022/23 after the finalisation of the PREFU forecast and the variance in the operating balance results.
ENDS