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Media statement

Financial Statements of the Government of New Zealand for the four months ended 31 October 2017

Issue date: 
Tuesday, 5 December 2017
Corporate author: 
View point: 

Paul Helm, Chief Government Accountant

The Financial Statements of the Government of New Zealand for the four months ended 31 October 2017 were released by the Treasury today.  The statements are compared against forecasts based on the 2017 Budget Economic and Fiscal Update (BEFU 17) published on 25 May 2017.

The operating balance before gains and losses (OBEGAL) was a deficit of $308 million, close to the forecast deficit of $217 million. OBEGAL can fluctuate from month to month as the recognition of tax revenue does not happen uniformly throughout the year, while expenditure is fairly static on a monthly basis before peaking in June.  As a result, it is not unusual for OBEGAL to be a small surplus or deficit in the first part of the financial year. 

Core Crown tax revenue was $24.2 billion for the four months to 31 October 2017.  While overall tax was as expected, corporate tax was $0.2 billion ahead of forecast, and customs and excise duties was behind forecast by $0.1 billion.

Core Crown expenses of $26.6 billion were slightly ahead of the $26.4 billion forecast with some expenditure recognised earlier than expected.

In addition to an OBEGAL deficit, net investment gains of $3.4 billion were recorded. Offsetting the net investment gains, discount rates at the end of October were slightly lower than in June and inflation rates slightly higher.  As a result, ACC recognised an actuarial loss of $0.9 billion on its outstanding claims liability.

When total gains and losses were added to the OBEGAL result, the operating balance was $2.1 billion, $1.4 billion larger than forecast.

The core Crown residual cash deficit was $2.0 billion in line with forecasts. 

The residual cash deficit has resulted in core Crown net debt of $61.4 billion at the end of October. This result was $2.9 billion lower than forecast. The lower than expected net debt was largely due to a lower than expected net debt position at 30 June 2017 ($2.8 billion less than forecast at BEFU 17).  This positive variance has carried forward into the current financial year.

Net worth attributable to the Crown was $112.6 billion, $11.9 billion higher than forecast.  This primarily reflects the 30 June 2017 position, which was $10.5 billion higher than forecast at BEFU 17. In addition, the operating balance was $1.4 billion higher than forecast.

$ million Year to date Full Year
October 2017
October 2017
to BEFU 17
to BEFU 17
June 2018
Core Crown          
Core Crown tax revenue 24,168 24,237 (69) (0.3) 77,536
Core Crown revenue 26,483 26,551 (68) (0.3) 83,760
Core Crown expenses 26,632 26,399 (233) (0.9) 80,486
Core Crown residual cash (2,017) (2,036) 19 0.9 (1,789)
Gross debt3 89,017 91,494 2,477 2.7 84,078
as a percentage of GDP 33.2% 34.1%     29.8%
Net debt4 61,374 64,259 2,885 4.5 64,111
as a percentage of GDP 22.9% 24.0%     22.8%
Total Crown          
Operating balance before gains and losses (308) (217) (91) (41.9) 2,858
Operating balance 2,079 714 1,365 191.2 5,496
Net worth attributable to the Crown 112,649 100,785 11,864 11.8 105,566
  1. Using the most recently published GDP (for the year ended 30 June 2017) of $268,101 million (Source: Statistics New Zealand).
  2. Using BEFU 17 forecast GDP for the year ending 30 June 2018 of $281,801 million (Source: the 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.



Jayne Winfield | Office of the Government Accountant
Tel: +64 4 890 7205