Nicola Haslam, Acting Chief Government Accountant
The Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2016 were released by the Treasury today. The statements are compared against forecasts based on the 2016 Budget Year Economic and Fiscal Update (BEFU) published on 26 May 2016.
The results for the eleven months to the end of May show an operating balance before gains and losses (OBEGAL) surplus of $2,304 million. The OBEGAL surplus is expected to decline in June as growth in expenses is expected to outpace revenue. Most key indicators were consistent with BEFU forecasts, with the large timing variance in tax revenue from April of $1.1 billion largely reversing as expected.
Core Crown tax revenue at $64.7 billion, was 0.6% or $364 million higher than forecast largely due to customs and excise duties ($188 million), source deductions ($182 million) and GST ($98 million). These variances are a mix of timing and permanent in nature.
Core Crown expenses at $67.2 billion, were close to forecast.
When gains and losses are combined with the OBEGAL result, the operating balance was a deficit of $1.5 billion ($82 million larger than forecast).
The core Crown residual cash position, at a deficit of $927 million, was $871 million smaller than expected, primarily reflecting higher than expected tax receipts and lower cash payments.
Net debt at $61.5 billion (24.7% of GDP) was $469 million lower than forecast, largely reflecting the residual cash result, partly offset by lower amounts of circulating currency and the impact of changes in foreign exchange rates on financial instruments.
At 31 May 2016, total Crown assets were valued at $285.6 billion and liabilities were $195.3 billion while the Crown’s share of net worth stood at $84.6 billion.
The current OBEGAL surplus of $2,304 million compares to a surplus of $1,176 million at the same time last year. Core Crown tax revenue has increased by 5.7%, while core Crown expenses have grown by 2.3% over that time.
|$ million||Year to date||Full Year|
|Core Crown tax revenue||64,720||64,356||364||0.6||69,682|
|Core Crown revenue||69,829||69,433||396||0.6||75,329|
|Core Crown expenses||67,244||67,333||89||0.1||74,382|
|Core Crown residual cash||(927)||(1,798)||871||48.4||(2,115)|
|as a percentage of GDP||35.3%||34.8%||34.7%|
|as a percentage of GDP||24.7%||24.9%||24.9%|
|Operating balance before gains and losses||2,304||1,983||321||16.2||668|
|Net worth attributable to the Crown||84,574||84,771||(197)||(0.2)||83,547|
- Using the most recently published GDP (for the year ended 31 Mar 2016) of $248,647 million (Source: Statistics New Zealand).
- Using forecast GDP for the year ending 30 June 2016 of $250,126 million (Source: Treasury).
- Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.
- Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
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