12 December 2003
For immediate release
Peter Bushnell Deputy Secretary to the Treasury
FINANCIAL STATEMENTS OF THE GOVERNMENT FOR THE FOUR MONTHS ENDED 31 OCTOBER 2003
The Financial Statements of the Government of New Zealand for the four months ended 31 October 2003 were released by the
These financial statements are compared against forecast tracks based on the 2003 Budget Economic and Fiscal Update
(2003 BEFU). Revised forecasts will be released as part of the 2003 December Economic and Fiscal Update (2003 DEFU) at
10.00 am 18 December 2003. The majority of the October results have been incorporated into the revised full year
forecast for the December Update.
Actual Forecast Variance Forecast
$million $million $million $million
Operating balance (surplus) 1,756 596 1,160 3,761
OBERAC 1,626 596 1,030 3,761
Crown balance (net worth) 25,490 24,283 1,207 23,958
Gross sovereign-issued debt 40,374 37,555 2,819 34,160
Net core Crown debt 17,085 17,774 (689) 18,455
The operating balance was $1,756 million, which was higher-than-forecast by $1,160 million. The key drivers of the
forecast variance were:
• tax revenue being higher-than-forecast by $514 million;
• investment income being higher-than-forecast by $191 million, reflecting an appreciation in investment asset values
compared to the 2003 BEFU;
• core Crown expenses being lower-than-forecast by $179 million; and
• SOE and Crown entity segments (excluding investment income) being higher-than-forecast by around $200 million. The
OBERAC was $1,626 million. The difference between the OBERAC and the operating balance is largely due to investment
asset movements ($130 million).
Gross sovereign-issued debt was $2,819 million ahead of forecast because the New Zealand Superannuation Fund purchased $2,541 million of Treasury
Bills at 31 October. This purchase was additional to the DMO's programme and is not expected to disturb the Budget debt
forecast for the year of 25.5% of GDP as the Treasury Bills issued to the NZS Fund mature during the year. Gross
sovereign-issued debt was 31.7% of GDP, compared to forecast of 29.4%.
Net (core) Crown debt was $689 million lower than forecast reflecting higher net cashflows from operations, delays in investment activity and
additional issue of circulating currency.
Net core Crown debt was 13.4% of GDP, compared to forecast of 13.9%.