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Media statement

Financial Statements of the Government of New Zealand for the Eleven Months Ended 31 May 2017

Issue date: 
Thursday, 6 July 2017
Corporate author: 
View point: 

Paul Helm, Chief Government Accountant

The Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2017 were released by the Treasury today.  The statements are compared against forecasts based on the 2017 Budget Economic and Fiscal Update (BEFU) published on 25 May 2017.

Core Crown tax revenue was $1.1 billion higher (1.6%) than forecast for the eleven months ended 31 May 2017 and $4.8 billion higher (7.4%) compared to the same period last year.  The most significant variances from forecast were corporate tax ($688 million above forecast) and GST ($245 million above forecast).

Of the corporate tax variance, around $250 million relates to revenue forecast in June, but recognised in the May year-to-date results, and is therefore expected to reverse next month.   The remaining corporate tax variance of around $450 million is anticipated to be permanent in nature and relates to higher-than-expected tax assessments and additional portfolio investment entity (PIE) tax revenue.

Core Crown expenses at $69.3 billion were $345 million lower than forecast.  Just over $200 million of this variance relates to the impairment of tax receivables that were less than forecast.

The OBEGAL was a surplus of $4,490 million for the eleven months to 31 May 2017, compared to a forecast surplus of $2,943 million.  This favourable variance of $1,547 million was largely due to the core Crown tax revenue and core Crown expense results discussed above.

Net gains at $8.4 billion, were $257 million less than forecast.  This result primarily related to lower than expected actuarial gains (mostly reflecting a lower discount rate used to convert future cash into present day dollars), partially off-set by higher than forecast investment returns on the Crown’s investment portfolios.  Net gains, combined with the OBEGAL surplus, resulted in an operating balance surplus of $13.1 billion ($1.3 billion higher than forecast). 

Net worth attributable to the Crown was $103.8 billion, $1.3 billion ahead of forecast for the eleven months ended 31 May 2017.  This is primarily attributable to the operating balance result.

Core Crown residual cash was $802 million higher than forecast largely the result of core Crown tax receipts being ahead of forecast. 

Directly impacted by the residual cash results, and an increase in circulated currency issued, core Crown net debt at $59.3 billion (22.4% of GDP) was $1.2 billion lower than forecast. 

$ million Year to date Full Year
May 2017
May 2017
to BEFU 17
to BEFU 17
June 2017
Core Crown          
Core Crown tax revenue 69,527 68,438 1,089 1.6 74,598
Core Crown revenue 75,269 74,145 1,124 1.5 80,771
Core Crown expenses 69,258 69,603 345 0.5 77,464
Core Crown residual cash 2,618 1,816 802 44.2 71
Gross debt3 87,463 87,847 384 0.4 88,645
as a percentage of GDP 33.0% 33.2%     33.0%
Net debt4 59,334 60,522 1,188 2.0 62,277
as a percentage of GDP 22.4% 22.9%     23.2%
Total Crown          
Operating balance before gains and losses 4,490 2,943 1,547 52.6 1,621
Operating balance 13,134 11,855 1,279 10.8 9,438
Net worth attributable to the Crown 103,760 102,459 1,301 1.3 100,044
  1. Using the most recently published GDP (for the year ended 31 March 2017) of $264,748 million (Source: Statistics New Zealand).
  2. Using forecast GDP for the year ending 30 June 2017 of $268,877 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. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.


Officer for Enquiries

Nicola Haslam | Office of the Government Accountant
Tel: +64 4 917 6943
Last updated: 
Thursday, 6 July 2017