Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the nine months ended 31 March 2018 were released by the Treasury today. The statements are compared against forecasts based on the 2017 Half Year Economic and Fiscal Update (HYEFU 17) published on 14 December 2017.
Core Crown tax revenue was $57.5 billion for the nine months to 31 March 2018, higher than forecast by $1.1 billion. Corporate tax was above forecast by $0.3 billion mainly owing to provisional tax assessments being stronger than expected. GST and source deductions were both above forecast by $0.2 billion and $0.1 billion, primarily as the levels of employment and residential investment were above forecast. Customs and excise duties were also above forecast by $0.2 billion. Much of this variance can be expected to remain until year end.
Core Crown expenses of $59.1 billion were $0.1 billion lower than forecast.
The operating balance before gains and losses (OBEGAL) was a surplus of $3.3 billion. This was higher than forecast by $0.9 billion, largely driven by the core Crown results.
Total gains and losses were a gain of $2.1 billion, $0.8 billion lower than forecast. Of this variance, net investments gains were $0.6 billion higher than forecast primarily due to forecast long-term benchmark returns being lower than the actual returns received in large Government investment portfolios. While net losses on non-financial instruments were $1.4 billion higher than the losses forecast primarily due to changes to discount rates.
When gains and losses are added to the OBEGAL result, the operating balance was a $5.5 billion surplus, $0.1 billion larger than forecast. This result flows directly into net worth attributable to the Crown which was close to forecast at $116.0 billion.
Core Crown residual cash was a deficit of $1.6 billion, $1.4 billion lower than the forecast deficit of $3.0 billion. This was largely driven by core Crown tax receipts as corporate tax and GST receipts were $0.6 billion and $0.5 billion higher than forecast respectively.
Net debt was $60.8 billion at 31 March 2018, $2.2 billion lower than forecast. On top of the residual cash result, circulating currency was higher than forecast.
Gross debt, however, was $2.4 billion higher than forecast primarily due to higher than forecast Government bonds of $1.7 billion.
| $ million | Year to date | Full Year | |||
|---|---|---|---|---|---|
| March 2018 Actual1 |
March 2018 HYEFU 17 Forecast1 |
Variance2 to HYEFU 17 $m |
Variance to HYEFU 17 % |
June 2018 HYEFU 17 Forecast3 |
|
| Core Crown | |||||
| Core Crown tax revenue | 57,469 | 56,371 | 1,098 | 1.9 | 78,172 |
| Core Crown revenue | 62,200 | 61,044 | 1,156 | 1.9 | 84,670 |
| Core Crown expenses | 59,058 | 59,130 | 72 | 0.1 | 81,653 |
| Core Crown residual cash | (1,551) | (2,988) | 1,437 | 48.1 | (2,647) |
| Gross debt4 | 87,704 | 85,263 | (2,441) | (2.9) | 84,524 |
| as a percentage of GDP | 30.9% | 30.1% | 29.5% | ||
| Net debt5 | 60,784 | 62,949 | 2,165 | 3.4 | 62,114 |
| as a percentage of GDP | 21.4% | 22.2% | 21.7% | ||
| Total Crown | |||||
| Operating balance before gains and losses | 3,290 | 2,380 | 910 | 38.2 | 2,541 |
| Operating balance | 5,467 | 5,387 | 80 | 1.5 | 5,916 |
| Net worth attributable to the Crown | 116,023 | 115,989 | 34 | - | 116,568 |
- Using the most recently published GDP (for the year ended 31 December 2017) of $283,465 million (Source: Statistics New Zealand).
- Favourable variances against forecast have a positive sign and unfavourable variances against forcase have a negative sign.
- Using HYEFU 17 forecast GDP for the year ending 30 June 2018 of $286,391 million (Source: the 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.
ENDS
Enquiries
Jayne Winfield | Office of the Government AccountantTel: +64 4 890 7205
Email: [email protected]