Financial Statements of the Government of New Zealand for the Nine Months Ended 31 March 2008

Dr Peter Bushnell
Deputy Secretary to the Treasury

The monthly financial statements are compared against monthly forecast tracks based on the 2007 Half Year Budget Economic and Fiscal Update.

The OBEGAL at $4.6 billion was $200 million lower than forecast.
Core Crown tax revenue, receipts, expenditure and residual cash were also largely on track.
The operating balance including gains and losses was $4.0 billion lower than forecast, primarily driven by losses from the Crown Financial Institutions’ (CFIs) investment portfolios and revaluation of long-term liabilities (ACC claims liabilities, pension commitments and provisions like Kyoto), offset by gains on other financial instruments.
Losses on the CFIs investment portfolios were due to continuing declines in equity markets. Equity markets can be volatile in the short term.

Net gains / (losses)	March 2008 Actual	March 2008 Forecast	Variance $m
	Year to date
$ million
CFIs Investment Portfolios
NZS Fund	(1,096)	614	(1,710)
ACC	(603)	407	(1,010)
EQC	(178)	156	(334)
	(1,877)	1,177	(3,054)
Long-term liabilities [1]	(2,315)	(1,176)	(1,139)
Other financial instruments [2]	692	328	364
Total net gains / (losses)	(3,500)	329	(3,829)

1 These losses mainly relate to revaluation of the ACC claims liability, the GSF pension liability and the Kyoto provision.

2 These net gains relate to RBNZ, the Debt Management Office and other entities.

	Year to date				Full Year
	March 2008 Actual	March 2008 Forecast	Variance $m	Variance %	HYEFU June 2008 Forecast
$ million
Core Crown
Core Crown revenue (excl. NZS Fund) [1]	44,886	45,409	(523)	(1.2)	62,130
Core Crown expenses	41,692	41,974	282	0.7	57,137
NZS Fund operating balance	(1,106)	692	(1,798)	(259.8)	917
Core Crown residual cash	2,096	1,677	419	25.0	759
GSID (excl. settlement cash)	32,006	32,181	175	0.5	33,303
as a percentage of GDP [2]	18.3%	18.4%			18.7%
Net Core Crown debt	594	1,439	845	58.7	1,983
as a percentage of GDP [2]	0.3%	0.8%			1.1%
Net Core Crown debt (incl. NZS Fund)	(11,644)	(12,257)	(613)	5.0	(13,102)
as a percentage of GDP [2]	(6.7)%	(7.0)%			(7.4)%
Total Crown
OBEGAL	4,631	4,802	(171)	(3.6)	6,574
Net gains / (losses)	(3,500)	329	(3,829)		814
Operating Balance	(1,131)	5,131	(4,000)	(78.0)	7,388

1 For the purposes of this indicator the NZS Fund is treated as a third party (i.e. its revenue is not included but the tax it pays is)

2 GDP for the year ended 31 December 2007 of $174,647 million (Source: Statistics New Zealand).

ENDS

Warwick White | Macroeconomic Group
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Fax: +64 4 471 5956
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