Dr Peter Bushnell
Deputy Secretary to the Treasury
The Financial Statements of the Government of New Zealand for the three months ended 30 September 2008 were released by the Treasury today.
The monthly financial statements are compared against the monthly forecast tracks based on the 2008 Pre-Election Economic and Fiscal Update.
Results for the three months ended 30 September 2008
- OBEGAL was $0.5 billion higher than forecast, at $0.9 billion. This variance was due mainly to tax revenue, which was $0.5 billion (3.9%) higher than forecast. While most tax revenue types were broadly in line with forecast, there are two items to note:
- Corporate tax and GST revenue were increased by $0.2 billion and $0.1 billion respectively, as a result of the late reversal of accruals relating to an earlier period. These accrual reversals did not affect cash receipts.
- Putting aside the impact of these accrual reversals, GST revenue was close to forecast, but corporate tax revenue was $0.2 billion lower than forecast. Company income tax assessments were lower than expected in a period usually dominated by provisional tax payments from multi-national and finance sector companies. These companies are likely to be amongst those most affected by the current international financial turmoil.
- The total Crown operating balance was a $0.8 billion deficit ($1.7 billion lower than the forecast $0.9 billion surplus). The two main features of this lower-than-expected result were:
- $1.8 billion related to losses on the investment portfolios of Crown financial institutions. This was mainly due to continuing turmoil in financial markets, and
- $0.4 billion related to a loss arising from a drop in the discount rate used for valuing ACC’s outstanding claims liability.
These losses were partly offset by tax revenue which was $0.5 billion higher than forecast, as noted above.
- The core Crown residual cash deficit was $1.1 billion lower than forecast at $3.2 billion. This was mainly due to delays in transferring $0.7 billion for the NZ Fast Forward Fund pending the resolution of governance issues; and $0.3 billion higher-than-expected petrol royalties received due to high oil prices earlier in the year.
- Gross debt was $1.0 billion higher than forecast at $31.9 billion. This was mainly due to valuation changes on financial instruments (particularly derivatives) and higher-than-expected issues of Government Stock.
- Net core Crown debt was $1.4 billion lower than forecast at $2.6 billion due mainly to the lower-than-expected residual cash deficit (noted above) and valuation changes on financial instruments.
Year to date
|Core Crown revenue (excl. NZS Fund) ||15,450||15,063||387||2.6||61,102|
|Core Crown expenses||15,066||15,333||267||1.7||62,359|
|NZS Fund operating balance||(884)||231||(1,115)||(482.7)||986|
|Core Crown residual cash||(3,214)||(4,309)||1,095||(25.4)||(5,909)|
|GSID (excl. settlement cash)||31,931||30,884||(1,047)||(3.4)||32,087|
|as a percentage of GDP||17.8%||17.2%||17.4%|
|Net Core Crown debt||2,592||3,952||1,360||34.4||5,207|
|as a percentage of GDP||1.4%||2.2%||2.8%|
|Net Core Crown debt (incl. NZS Fund)||(10,207)||(10,139)||68||(0.7)||(10,430)|
|as a percentage of GDP||(5.7)%||(5.7)%||(5.7)%|
|Net gains / (losses) and other items||(1,648)||519||(2,167)||1,973|
1 For the purposes of this indicator the NZS Fund is treated as a third party (ie, its revenue is not included but the tax it pays is).
2 Using GDP for the year ended 30 June 2008 of $179,048 million (Source: Statistics New Zealand).
3 Using forecast GDP for the year ended 30 June 2009 of $184,390 million (Source: Treasury).
Officer for EnquiriesKamlesh Patel | Macroeconomic Group
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