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6 May 2013
MEDIA STATEMENT
Embargoed until 10.00am, Monday 6 May 2013
Fergus Welsh
Chief Financial Officer
The Treasury
Financial Statements of the Government of New Zealand for the Nine Months Ended 31 March 2013
The Financial Statements of the Government of New Zealand for the nine months ended 31 March 2013 were released by the Treasury today.
These financial statements are the last to be compared against forecasts based on the Half Year Economic and Fiscal Update (HYEFU), released on 18 December 2012.
The Operating Balance before Gains and Losses (OBEGAL) was in deficit by $5.0 billion, which was $273 million lower than forecast largely owing to core Crown tax revenue being $535 million higher than expected. Continuing the pattern of recent months:
• Other individuals tax revenue was $406 million (14.8%) above forecast, likely the result of solid investment
incomes, driven by recent strength in equity markets; and
• Source deductions was $187 million (1.1%) above forecast due to a higher effective tax rate. Recent economic
data suggests that aggregate labour incomes have been consistent with forecast, but that the composition of the labour
force has changed (a decrease in the proportion of low income workers). This change increased the revenue collected
because of the progressive nature of the income tax scale.
Core Crown expenses were close to forecast at $52.2 billion. While underspends relating to delays in treaty settlements and New Zealand’s
aid programmes were recorded, these were largely offset by higher than expected costs associated with an
earthquake-related provision for horizontal infrastructure (wastewater, storm water and freshwater) in Canterbury.
Including net gains, the operating balance was in surplus by $2.5 billion, some $4.5 billion above the forecast deficit, largely owing to significant net
investment gains made by the New Zealand Superannuation Fund and ACC ($1.7 billion and $0.7 billion above forecast
respectively). In addition, favourable actuarial valuations were recorded on the Government Superannuation Fund’s
retirement liability and ACC’s outstanding claims liability of $0.7 billion and $0.6 billion above forecast
respectively, driven by discount rate movements and favourable payments/claims experience.
The residual cash deficit was $1.3 billion smaller than expected, mainly reflecting higher than expected tax receipts and underspending on
capital programmes.
Gross debt was $1.8 billion below forecast at $84.2 billion (40.2% of GDP), mostly due to the Reserve Bank purchasing $2.7 billion
more Government bonds than forecast, reducing the amount of debt owed by the Crown to third parties.
Net debt was $1.5 billion lower than forecast largely reflecting the residual cash result.
Year to dateFull Year$ millionMarch
2013
Actual1March
2013
HYEFU
Forecast1Variance
to HYEFU
$mVariance
to HYEFU
%June
2013
HYEFU
Forecast2Core CrownCore Crown tax revenue41,864 41,3295351.357,376Core Crown revenue45,832 45,2975351.262,939Core Crown expenses52,168 52,223550.171,998Core Crown residual cash(7,632)(8,948)1,31614.7(9,782)Gross debt384,243 86,0141,7712.180,176as a percentage of GDP40.2%41.1% 37.1%Net debt458,483 59,9361,4532.459,998as a percentage of GDP27.9%28.6% 27.8%Total Crown Operating balance before gains and losses(4,950)(5,223)2735.2(7,340)Operating balance2,518 (1,979)4,497227.2(3,275)Net worth attributable to the Crown61,900 57,3774,5237.956,285
1 Using GDP for the year ended 31 December 2012 of $209,324 million (Source: Statistics New Zealand)
2 Using forecast GDP for the year ended 30 June 2013 of $216,048 million (Source: Treasury)
3 Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills
4 Net core Crown debt excluding student loans and other advances
ENDS
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