Contents

A Snapshot of the 2013 Financial Statements of the Government (Part 1)

The economy continued to grow

The size of the nominal economy increased 2.1% over the year, driven by an increase in consumer spending and a large increase in investment, particularly residential building.

Annual average % change in GDP

Facts and figures – June Year

• $212.7 billion nominal GDP (up 2.1%)
• 1,360,700 average full time employees 22,275 more)
• $27.42 average hourly rate (up 2.4%)
• 6.7% average unemployment 0.1% higher)
• 0.8% inflation (2.2% in 2012)

Where does the Government's money come from?

• 67% of revenue was from collection of tax ($3.5 billion more than last year)
• 84% of sales of goods and services from SOEs (eg, NZ Post, Meridian Energy, KiwiRail)
• 14% was from other sources (eg, ACC, EQC, and fire service levies)

Who pays income tax, and how much?

• Next year 3.4 million New Zealanders are expected to pay tax of $26.4 billion – an average of $7,765 each

Your tax dollar - where was it spent?

• $70.3 billion core Crown expenses
• 55% of all spending on welfare, education and health
• 23% of all spending by SOEs and Crown entities

Crown expenses

Total Crown expenses were $1.7 billion less than last year as insurance expenses and one-off impairments were higher in 2012.

The peak in 2011 was a result of large Canterbury earthquake costs, which are detailed on the next page.

Your dollar provided...

$49.7 billion on welfare, health, education

Social welfare

$10.2 billion to provide 612,000 superannuitants with income support and $4.7 billion to 323,000 people receiving the unemployment, sickness, invalids, and domestic purpose benefits.

Health

$11.7 billion of funding to hospitals, which helped provide over 52,000 nurses, 14,000 doctors and 158,000 elective surgeries.

Education

$12.5 billion helped to fund over 200,000 enrolments in early childhood education and over 750,000 school students.

$11.5 billion so far to rebuild Canterbury

• $11.5 billion total cost so far, $9.1 billion of that was recorded in 2011, $1.9 billion last year and $0.5 billion this year
• 70% are the claims costs of EQC, with 423,273 building claims received and approximately $4.4 million paid out per da
• 7,493 red zone properties with over 85% now settled

A Snapshot of the 2013 Financial Statements of the Government (Part 2)

Government spending exceeded income

Operating balance before gains and losses (OBEGAL)

$4.4 billion deficit

• Second successive year that the deficit halved
• Deficit was $18.4 billion in 2011 and $9.2 billion in 2012
• Recovery of OBEGAL reflects the recovery in the economy
• Next surplus forecast for 2014/15 (one more year in deficit)

Core Crown net debt

$55.8 billion core Crown net debt

• $5.1 billion increase from last year as the Crown continued to run a cash deficit

What does the Government owe?

• $100.1 billion
  of borrowings, the same as last year. While $15.5 billion of government bonds were issued (at a rate of $304 million per week) $15.4 billion of maturing debt was repaid. Overall net cash from borrowing was $0.1 billion
• $37.7 billion
  of insurance liabilities, $3.5 billion less than last year, with all the main insurers having lower amounts outstanding this year

Total Crown liabilities

• $6.1 billion less than last year
  Total Crown liabilities fell from last year, mostly due to falls in the estimated future cost of the long-term obligations for ACC claims and the Government Superannuation Fund (GSF)

What does the Government own?

Total Crown assets

• $109.8 billion
  of property, plant and equipment (PPE) 55%, or $60 billion, was land and buildings
• $106.8 billion
  of financial assets with 47% held in New Zealand and 16% in both the USA and Europe
• $27.8 billion
  of other assets, including inventory and intangible assets