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Media statement

Financial Statements of the Government of New Zealand for the three months ended 30 September 2017

Issue date: 
Tuesday, 7 November 2017
Corporate author: 
View point: 

Paul Helm, Chief Government Accountant

The Financial Statements of the Government of New Zealand for the three months ended 30 September 2017 were released by the Treasury today.  The statements are compared against forecasts based on the 2017 Budget Economic and Fiscal Update (BEFU) published on 25 May 2017.

The operating balance before gains and losses (OBEGAL) was close to forecast at a deficit of $90 million. OBEGAL can fluctuate from month to month as the recognition of tax revenue does not happen uniformly throughout the year (peak months tend to be April/ May), 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 close to forecast and $0.7 billion (3.9%) higher than the same period last year.  While overall tax was as expected, source deductions were $120 million (1.6%) higher with a slightly larger than forecast seasonal peak in revenue.  This variance is likely to reverse in later months. This result was largely offset by Customs and Excise duties which were $80 million less than forecast.

Core Crown expenses was slightly ahead of forecast. In some cases expenditure that was expected in 2016/17 moved into 2017/18, while other spending was recognised earlier than expected.

In addition to the OBEGAL deficit, net investment gains of $1.9 billion were recorded. Offsetting the net investment gains, discount rates at the end of September were slightly lower than in June.  As a result, ACC recognised a valuation loss of $0.2 billion on its outstanding claims liability.

When gains and losses are added to the OBEGAL result, the operating balance was $1.6 billion, $1.0 billion larger than forecast.

The residual cash deficit was $1.2 billion, $0.4 billion smaller than forecast.  This better than expected result was largely due to higher than forecast provisional tax receipts ($0.4 billion).

The residual cash deficit has resulted in core Crown net debt increasing in nominal terms to $61.1 billion at the end of September.  However, the result was $3.1 billion less than forecast.  The lower than expected net debt is largely due to a lower net debt position at 30 June 2017 (which was $2.8 billion less than forecast).

Net worth attributable to the Crown was $11.5 billion higher than forecast at $112.1 billion.  The majority of this variance relates to the 30 June 2017 position, which was $10.5 billion higher than forecast at BEFU 17.

The September results are close to forecast.  It is, however, too early in the financial year to extrapolate the results to form conclusions on the expected full year results.

$ million Year to date Full Year
September 2017
September 2017
to BEFU 17
to BEFU 17
June 2018
Core Crown          
Core Crown tax revenue 18,016 18,011 5 - 77,536
Core Crown revenue 19,701 19,628 73 0.4 83,760
Core Crown expenses 19,998 19,860 (138) (0.7) 80,486
Core Crown residual cash (1,202) (1,580) 378 23.9 (1,789)
Gross debt3 87,539 90,163 2,624 2.9 84,078
as a percentage of GDP 32.7% 33.6%     29.8%
Net debt4 61,144 64,217 3,073 4.8 64,111
as a percentage of GDP 22.8% 24.0%     22.8%
Total Crown          
Operating balance before gains and losses (90) (93) 3 3.2 2,858
Operating balance 1,566 597 969 162.3 5,496
Net worth attributable to the Crown 112,116 100,663 11,453 11.4 105,566
  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.


Officer for Enquiries

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