Paul Helm, Chief Government Accountant
The Financial Statements of the Government of New Zealand for the seven months ended 31 January 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 $44.8 billion for the seven months to 31 January 2018. Overall core Crown tax was higher than expected by $0.9 billion, with source dedications and GST above forecast by $0.3 billion each, as the levels of employment and residential investment were above forecast. Customs and excise duties were also above forecast by $0.2 billion, as the tobacco duties seasonal peak was larger than expected. Much of this variance can be expected to remain until year end.
Core Crown expenses of $46.0 billion were higher than the $45.8 billion forecast with some expenditure recognised earlier than expected.
The operating balance before gains and losses (OBEGAL) was a surplus of $2.4 billion. Although the core Crown results were slightly offset by State-owned Enterprise results, the OBEGAL surplus was $0.7 billion more than forecast.
Net investment gains of $5.5 billion were recorded to 31 January 2018, $2.7 billion higher than forecast. Partially offsetting these investment gains were net losses on non-financial instruments of $1.5 billion primarily driven by changes to discount rates used to calculate the ACC claims liability. The Emissions Trading Scheme also recognised a loss of $0.5 billion due to an increase in carbon prices.
When gains and losses are added to the OBEGAL result, the operating balance was a $6.5 billion surplus, $2.1 billion larger than forecast. This result flows directly into net worth attributable to the Crown which was $2.1 billion higher than forecast at $117.0 billion.
Core Crown residual cash was a deficit of $0.9 billion and was an improvement from forecast by $0.7 billion. This was largely driven by core Crown tax receipts that were $1.4 billion higher than forecast, in line with the increase in core Crown tax revenue.
Net debt was $60.1 billion at 31 January 2018, $1.2 billion lower than forecast. On top of the residual cash result, circulating currency was higher than forecast and there was higher than forecast valuation gains.
Gross debt, however, was $2.1 billion higher than forecast primarily due to an increase in short term borrowings and unsettled trades at month end, most of which is expected to reverse out.
| $ million | Year to date | Full Year | |||
|---|---|---|---|---|---|
| January 2018 Actual1 |
January 2018 HYEFU 17 Forecast1 |
Variance to HYEFU 17 $m |
Variance to HYEFU 17 % |
June 2018 HYEFU 17 Forecast2 |
|
| Core Crown | |||||
| Core Crown tax revenue | 44,837 | 43,900 | 937 | 2.1 | 78,172 |
| Core Crown revenue | 48,507 | 47,540 | 967 | 2.0 | 84,670 |
| Core Crown expenses | 45,992 | 45,837 | (155) | (0.3) | 81,653 |
| Core Crown residual cash | (889) | (1,628) | 739 | 45.4 | (2,647) |
| Gross debt3 | 85,960 | 83,891 | (2,069) | (2.5) | 84,524 |
| as a percentage of GDP | 30.9% | 30.1% | 29.5% | ||
| Net debt4 | 60,131 | 61,358 | 1,227 | 2.0 | 62,114 |
| as a percentage of GDP | 21.6% | 22.0% | 21.7% | ||
| Total Crown | |||||
| Operating balance before gains and losses | 2,441 | 1,764 | 677 | 38.4 | 2,541 |
| Operating balance | 6,462 | 4,340 | 2,122 | 48.9 | 5,916 |
| Net worth attributable to the Crown | 117,000 | 114,939 | 2,061 | 1.8 | 116,568 |
- Using the most recently published GDP (for the year ended 30 September 2017) of $278,312 million (Source: Statistics New Zealand).
- 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
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