Fergus Welsh, Chief Financial Officer
The Financial Statements of the Government of New Zealand for the five months ended 30 November 2013 were released by the Treasury today. These statements are compared against forecasts based on the Half Year Economic and Fiscal Update (HYEFU), released on 17 December 2013.
The operating balance before gains and losses (OBEGAL) was in deficit by $2.3 billion, which was around $400 million more than expected, mainly due to lower core Crown tax revenue. At this stage, our assessment is that the majority of this variance is timing in nature and will reverse out in coming months.
Following on the trend in recent months, continued strength in equity markets saw gains recorded on financial instruments of $2.8 billion, which was $2.0 billion ahead of forecast. As a result, the operating balance surplus was $1.6 billion higher than forecasts at $2.3 billion.
Both residual cash and net debt were close to forecast.
The November financial statements include the partial share sale of Air New Zealand. The sale raised $365 million in gross proceeds for the Crown and resulted in a gain on disposal on its investment of approximately $52 million. When ACC and NZS Fund’s investments are removed, the estimated gain on disposal reduces to $46 million.
|Year to date||Full Year|
|Core Crown tax revenue||23,879||24,393||(514)||(2.1)||62,491|
|Core Crown revenue||26,374||26,897||(523)||(1.9)||68,493|
|Core Crown expenses||29,160||29,146||(14)||(0.0)||72,181|
|Core Crown residual cash||(4,013)||(3,972)||(42)||(1.1)||(4,076)|
|as a percentage of GDP||38.5%||38.5%||35.8%|
|as a percentage of GDP||27.6%||27.7%||26.3%|
|Operating balance before gains and losses||(2,335)||(1,933)||(402)||(20.8)||(2,320)|
|Net worth attributable to the Crown||69,818||68,139||1,679||2.5||69,165|
1 Using GDP for the year ended 30 September 2013 of $216,134 million (Source: Statistics New Zealand).
2 Using forecast GDP for the year ended 30 June 2014 of $227,793 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.
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