Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the four months ended 31 October 2016 were released by the Treasury today. The statements are compared against forecasts based on the 2016 Budget Economic and Fiscal Update (BEFU) published on 26 May 2016. As the Kaikōura earthquakes occurred after 31 October, none of the effects of these earthquakes are included in these financial statements.
The results for the four months to the end of October show an operating balance before gains and losses (OBEGAL) deficit of $131 million which was $934 million better than forecast, largely due to higher than forecast core Crown revenue.
Core Crown tax revenue at $23.2 billion, was $671 million or 3.0% higher than forecast and $1.1 billion higher than for the same period last year. Higher than forecast provisional tax and portfolio investment entity tax led to higher than expected forecast corporate tax ($300 million). While private consumption was close to forecast, residential investment and inbound tourist spending were both above forecast contributing to higher than forecast GST ($275 million).
Core Crown expenses were close to forecast at $25.3 billion.
When combined with the OBEGAL result, higher than forecast net gains of $2,305 million, largely from NZS Fund investment returns ($870 million) and ACC actuarial gains ($1,711 million) resulted in an operating balance surplus of $2,997 million, $3,224 million higher than forecast.
Core Crown residual cash was a deficit of $490 million, $1,573 million lower than forecast, primarily reflecting higher than expected core Crown tax receipts of $1,529 million. As a consequence, net debt was $1,752 million lower than expected at 24.8% of GDP.
At 31 October 2016, total Crown assets were valued at $291.0 billion and liabilities were $192.9 billion while the Crown’s share of net worth stood at $92.3 billion.
|$ million||Year to date||Full Year|
|Core Crown tax revenue||23,157||22,486||671||3.0||71,971|
|Core Crown revenue||25,423||24,616||807||3.3||78,544|
|Core Crown expenses||25,299||25,497||198||0.8||77,388|
|Core Crown residual cash||(490)||(2,063)||1,573||76.2||(4,162)|
|as a percentage of GDP||34.9%||35.3%||36.2%|
|as a percentage of GDP||24.8%||25.5%||25.6%|
|Operating balance before gains and losses||(131)||(1,065)||934||87.7||719|
|Net worth attributable to the Crown||92,318||83,216||9,102||10.9||86,641|
- Using the most recently published GDP (for the year ended 30 June 2016) of $251,760 million (Source: Statistics New Zealand).
- Using forecast GDP for the year ending 30 June 2016 of $259,208 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.
Officer for EnquiriesJayne Winfield | Office of the Government Accountant
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