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Media statement

Financial Statements of the Government of New Zealand for the Four Months Ended 31 October 2011

Issue date: 
Monday, 5 December 2011
Corporate author: 
View point: 

Fergus Welsh
Chief Financial Officer

The Financial Statements of the Government of New Zealand for the Four Months Ended 31 October 2011 were released by the Treasury today.

The monthly financial statements are compared against monthly forecast tracks based on the 2011 Pre-election Economic and Fiscal Update (PREFU) published on 25 October 2011.

The operating balance before gains and losses (OBEGAL) for the first four months to 31 October was close to forecast at a deficit of $3.36 billion.

Core Crown tax revenue was $503m (2.8%) lower than forecast. The main tax variances were as follows:

  • source deductions were $421m (5.8%) below forecast,
  • GST revenue was $232m (4.7%) below forecast, and
  • corporate tax was $229m (8.6%) above forecast.

The source deductions and GST revenue variances were mainly timing-related and are expected to narrow in coming months. Corporate tax revenue was above forecast with recent public profit announcements indicating that taxable corporate income for the 2011/12 year may provide an upside risk to the annual tax forecasts. Overall tax forecasts were within normal variability and are still on track for the full year forecast, based on experience to date. However, heightened economic risks remain arising out of the current European sovereign debt environment as highlighted in PREFU, which would affect tax revenue should these risks be realised.

While the OBEGAL was on target, the October results included an actuarial loss on the Government Superannuation Fund (GSF) liability that was $1.05 billion higher than forecast. This loss arose from an increase in the assumption regarding future mortality improvements in the most recent valuation of the GSF completed after PREFU. As a result, the operating balance deficit at $7.45 billion was $1.23 billion or 19.7% higher than forecast.

Net debt at $45.81 billion (22.9% of GDP) was close to forecast and gross debt at $74.97 billion was 3.5% lower than forecast. While the total government stock on issue was as anticipated, a larger portion of this debt was held by government entities.



Year to date Full Year
$ million October
June 2012
Core Crown          
Core Crown tax revenue 17,357 17,860 (503) (2.8) 55,451
Core Crown expenses 25,032 23,299 267 1.1 74,460
Core Crown residual cash (5,536) (5,811) 275 4.7 (13,426)
Gross debt3 74,969 77,692 2,723 3.5 79,779
as a percentage of GDP 37.4% 38.8%     37.7%
Net debt4 45,810 46,311 501 1.1 53,823
as a percentage of GDP 22.9% 23.1%     25.4%
Total Crown          
Operating balance before gains and losses (3,360) (3,229) (131) (4.1) (10,809)
Operating balance (7,453) (6,227) (1,226) (19.7) (12,601)
Net worth 73,541 74,633 (1,092) (1.5) 68,282

1 Using GDP for the year ended 30 June 2011 of $200,291 million (Source: Statistics New Zealand)

2 Using forecast GDP for the year ended 30 June 2012 of $211,773 million (Source: Treasury)

3 Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills

4 Net core Crown debt excluding student loans and other advances


Officer for Enquiries

Nicola Haslam | Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6943
Fax: +64 4 471 5956
Last updated: 
Monday, 5 December 2011