Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the nine months ended 31 March 2017 were released by the Treasury today. The statements are compared against forecasts based on the 2016 Half Year Economic and Fiscal Update (HYEFU) published on 8 December 2016.
The operating balance before gains and losses (OBEGAL) was a surplus of $1.5 billion, compared to a forecast surplus of $147 million. This favourable variance of $1.3 billion was largely due to higher than forecast core Crown tax revenue and lower than forecast core Crown expenses.
Core Crown tax revenue was $527 million (1.0%) higher than forecast for the nine months ended 31 March 2017 and $3.7 billion (7.3%) higher compared to the same period last year. Corporate tax continues to be the largest driver the favourable result, with revenue being $673 million ahead of forecast. This increase was across both provisional and terminal tax indicating that profits in the 2016 tax year were higher than forecast and that this has continued into the 2017 tax year. Offsetting the strong corporate tax result, GST was $145 million below forecast primarily due to lower than expected residential investment.
Core Crown expenses at $56.6 billion were $722 million (1.3%) lower than forecast. The majority of this variance relates to forecast expected costs in relation to the Kaikōura earthquakes and lower than expected impairment of debt and bad debt write-offs for tax receivables.
Net gains at $9.3 billion were $5.7 billion higher than forecast. This primarily related to actuarial gains of $2.6 billion and $1.5 billion on the ACC and GSF liabilities ($2.3 billion and $1.5 billion higher than forecast respectively). Net gains combined with the OBEGAL surplus, resulted in an operating balance surplus of $10.9 billion ($7.0 billion higher than forecast).
Net worth attributable to the Crown was $7.1 billion ahead of forecast, largely owing to the operating balance result.
Core Crown residual cash surplus was $1.1 billion higher than forecast. While net core Crown operating cash flows were in line with forecast, net core Crown capital payments were $1.4 billion less than forecast. Reflecting the residual cash results, core Crown net debt at $62.0 billion (23.8% of GDP) was $1.6 billion lower than forecast.
Gross debt was $3.2 billion lower than forecast, largely as a result of increased repurchasing of government stock which does not impact on the net debt indicator.
|$ million||Year to date||Full Year|
|Core Crown tax revenue||53,899||53,372||527||1.0||74,224|
|Core Crown revenue||58,578||58,032||546||0.9||80,455|
|Core Crown expenses||56,631||57,353||722||1.3||78,276|
|Core Crown residual cash||277||(811)||1,088||134.2||(2,192)|
|as a percentage of GDP||33.6%||34.8%||34.7%|
|as a percentage of GDP||23.8%||24.4%||24.3%|
|Operating balance before gains and losses||1,468||147||1,321||-||473|
|Net worth attributable to the Crown||100,394||93,258||7,136||7.7||93,034|
- Using the most recently published GDP (for the year ended 31 December 2016) of $261,169 million (Source: Statistics New Zealand).
- Using forecast GDP for the year ending 30 June 2017 of $264,760 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
Tel: +64 4 890 7205