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Media statement

Financial Statements of the Government of New Zealand for the Eight Months Ended 28 February 2008

Issue date: 
Friday, 4 April 2008
Corporate author: 
View point: 

Dr Peter Bushnell
Deputy Secretary to the Treasury


The Financial Statements of the Government of New Zealand for the eight months ended 29 February 2008 were released by the Treasury today.

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

Results for the eight months ended 29 February 2008

  • The operating balance was $3.3 billion lower than forecast at $1.4 billion.  The three main contributors to this lower than expected result were: 
    • Investment losses of $1.1 billion were recorded against forecast gains of $1.4 billion (a variance of $2.5 billion). These variances were recorded primarily by the NZS Fund ($1.5 billion), ACC ($0.8 billion) and EQC ($0.3 billion)
    • The ACC actuarial loss on their claims liability was $0.4 billion higher than forecast, and
    • Core Crown tax revenue to February was below forecast by $0.7 billion (1.9%). Core Crown tax receipts were, however, just $40 million (0.1%) below forecast.

The largest tax revenue variance was in GST ($0.4 billion lower than forecast).

GST revenue always includes an element of estimation each month, since the current month’s GST assessments are rarely submitted in time for monthly reporting. The estimation process is automated and is not subject to manual intervention.

IRD has analysed the GST revenue calculation for February and is satisfied that no error has been made along the lines of the provisional tax estimation error that affected the January accounts.

IRD’s view is that the estimated February numbers have been influenced by bringing forward the GST due date each month. This has the effect of increasing the weight given to January assessments in the estimation of the February accrual compared to previous years. January expenditure generally generates low GST. The negative variance is expected to reverse.

Unlike GST revenue, GST receipts do not involve estimation and can be regarded as an indicator of underlying economic conditions.  The February GST revenue variance should not be interpreted as indicating a weakening in GST collections beyond that reflected in GST receipts.

  • Adjusting for the non-cash valuation changes, the OBEGAL was $0.4 billion lower than forecast at $4.1 billion, with the lower than forecast tax revenue being the main contributor.
  • Core Crown revenue (excl. NZS Fund) was $1.2 billion lower than forecast.  This was due to core Crown tax revenue and interest and dividend revenue being lower than forecast ($0.7 billion and $0.5 billion respectively).  The interest revenue variance was due in the main to lower than forecast levels of marketable securities and was largely offset by the interest expense variance (which was lower than forecast by $0.3 billion).
  • Residual cash and consequently the debt indicators were largely on target.




  Year to date Full Year
June 2008
$ million          
Core Crown          
Core Crown revenue (excl. NZS Fund) [1] 39,218 40,410 (1,192) (2.9) 62,130
Core Crown expenses 36,708 37,059 351 0.9 57,137
NZS Fund operating balance (911) 611 (1,522) (249.1) 917
Core Crown residual cash 1,297 1,389 (92) (6.6) 759
GSID (excl. settlement cash) 31,997 31,600 (397) (1.3) 33,303
   as a percentage of GDP [2] 18.3% 18.1%     18.7%
Net Core Crown debt 1,857 1,781 (76) (4.3) 1,983
   as a percentage of GDP [2] 1.1% 1.0%     1.1%
Net Core Crown debt (incl. NZS Fund) (10,151) (11,151) (1,535) 13.1 (13,102)
   as a percentage of GDP [2] (5.8)% (6.7)%     (7.4)%
Total Crown          
OBEGAL 4,147 4,552 (405) (8.9) 6,574
Net gains / (losses) (2,716) 221 (2,937)   814
Operating Balance (1,431) 4,773 (3,342) (70.0) 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 (Source: Statistics New Zealand).

More background information about the GST variance is available on Treasury's website at the following link:



Officer for Enquiries

Warwick White | Macroeconomic Group
Tel: +64 4 917 6003
Fax: +64 4 471 5956
Last updated: 
Tuesday, 3 June 2008