Back to top anchor
Media statement

Financial Statements of the Government of New Zealand for the Four Months Ended 31 October 2013

Issue date: 
Friday, 6 December 2013
Corporate author: 
View point: 

Fergus Welsh, Chief Financial Officer

The Financial Statements of the Government of New Zealand for the four months ended 31 October 2013 were released by the Treasury today. These financial statements are compared against forecasts based on the Budget Economic and Fiscal Update (BEFU), released on 16 May 2013.

Continuing the trend from last month, the total Crown's operating balance before gains and losses (OBEGAL) was a deficit of $1.7 billion which was $395 million less than expected, largely owing to the stronger than forecast core Crown tax revenue and lower than expected core Crown expenses.

Core Crown tax revenue of $19.3 billion was 1.0% higher than forecast, largely due to stronger than anticipated other individuals' tax and customs and excise duties ($171 million and $78 million above forecast respectively).  Continued strength in gross other persons tax and lower than expected refunds contributed to the other individuals' tax outcome, while greater than expected imports of tobacco products and the domestic production of refined fuels underpinned the customs and excise duties result.  This improved performance was partially offset by $101 million lower than expected corporate tax, which reflected lower than forecast provisional tax.

Core Crown expenses of $23.3 billion were 1.1% lower than forecast, in part reflecting delays in earthquake expenses and treaty settlements ($88 million and $54 million respectively).

Gains in the Crown's investment portfolios were $1.7 billion higher than expected, particularly the New Zealand Superannuation Fund.  In addition, actuarial gains on the Accident Compensation Corporation's outstanding claims liability and the Government Superannuation Fund's retirement liability arising from discount rate changes contributed unforecast gains of $798 million and $539 million respectively.  The better than expected core Crown revenue and expenses result, alongside stronger than expected gains, were the key reason for the total Crown's operating balance inclusive of gains and losses recording a $1.8 billion surplus, compared with an expected  $1.5 billion deficit.

At 31 October, total Crown assets were $245.8 billion and liabilities were $172.4 billion.  The Crown's net worth strengthened to $69.3 billion.

The Core Crown residual cash deficit at $3.3 billion was $154 million below forecast, consistent with the revenue and expense trend.  The partial sale of shares in Meridian Energy occurred during October.  Total cash proceeds from the first instalment were just under $1.3 billion.  The forecasts included a figure of $1.5 billion for 2013/14, which was based on the forecast proceeds for the entire Government Share Offers programme, spread evenly over four years, and so was not an estimate of proceeds from the Meridian share offer.  Further information on the Meridian partial share sale is included in these financial statements. 

As a result of the lower than forecasted residual cash deficit and higher than forecast issues of circulating currency, the core Crown's net debt was $350 million lower than forecast at $59.1 billion, or 27.8% of GDP.  

Gross debt at $82.9 billion (39.0% of GDP) was boosted by higher than expected government bond issuance, including the syndication of the new September 2030 inflation-indexed bonds in October.

  Year to date Full Year
$ million October
Core Crown          
Core Crown tax revenue 19,344 19,146 198 1.0 62,383
Core Crown revenue 21,509 21,494 15 0.1 68,382
Core Crown expenses 23,320 23,575 255 1.1 72,367
Core Crown residual cash (3,264) (3,418) 154 4.5 (6,886)
Gross debt3 82,889 80,826 (2,062) (2.6) 87,686
as a percentage of GDP 39.0% 38.0%     38.5%
Net debt4 59,076 59,426 350 0.6 64,765
as a percentage of GDP 27.8% 27.9%     28.4%
Total Crown          
Operating balance before gains and losses (1,746) (2,141) 395 18.4 (2,033)
Operating balance 1,833 (1,465) 3,298 225.1 358
Net worth attributable to the Crown 69,300 66,768 2,532 3.8 61,997

1    Using GDP for the year ended 30 June 2013 of $212,701 million (Source: Statistics New Zealand)
2    Using forecast GDP for the year ended 30 June 2014 of $227,892 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

Kamlesh Patel | Office of the Chief Financial Officer and Chief Accountant Portfolio
Tel: +64 4 917 6094
Last updated: 
Friday, 6 December 2013