30 June 1999 Crown Financial Statements Released
Hon Bill English
Treasurer
Rt Hon Sir William
Birch
Minister of Finance
15 September
1999
Embargoed Until 2 p.m.
30 June 1999 Crown Financial Statements Released
The Financial Statements of the Government of New Zealand for the year ended 30 June 1999 were released by the Treasury today.
The changes against forecast for the key fiscal indicators are:
FIGURES
::::::::::::::::::::::::::::Actual
Forecast Variance
:::::::::::::::::::::::::::$million
$million $million
Operating balance (surplus)::
1,777::::: 2,164 ::::: (387)
Crown balance (net
worth):::: 6,022::::: 5,456 :::::: 566
Net Crown debt
:::::::::::::: 21,701:::: 22,369 ::::: 668
The operating
balance was around $1.8 billion, $400 million lower than
forecast.
Net worth and net debt are around $550 million
and $650 million better than forecast respectively.
The
operating balance came in $400 million lower than forecast
largely due to:
* The Government Superannuation Fund
unfunded pension liability revaluation ($646 million). This
is non-cash in nature, reflecting both lower discount rates
($283 million), and changes in the actual net
liability¾primarily employee wage growth and retirement
assumptions ($226 million)
* Lower-than-forecast tax
revenue $200m
These items were partly offset by
higher-than-forecast SOE and Crown entity surpluses ($287
million).
Expenses, excluding the movement in GSF
unfunded liability and foreign exchange movements, are
slightly lower than forecast ($81 million).
The 1998/99
operating balance has been influenced by a number of
"one-off" items such as the gain on sale of Contact Energy
and the Airport companies, and the GSF revaluation.
While these items create volatility, both upside and
downside, they do not impact the underlying operating
balance trend. If GSF and other "one-off" items were
removed, a surplus of around $150 million would
remain.
Despite the $400 million lower-than-forecast
operating balance, net worth was around $550 million higher
than forecast. This was due to other positive movements
(which do not impact on the operating balance):
* The
Crown has recognised the ACC unfunded liability on the books
for the first time. The adjustment required to bring this
liability on was around $750 million below the estimate in
the 1999 Budget, largely due to a shift in discount
rates.
* Year-end net asset revaluations, such as State
highways, were around $200 million. These revaluations are
not forecast.
Net debt was 22.0% of GDP (22.5% forecast),
around $650 million ahead of forecast. This increase was
mainly due to timing differences that are expected to
reverse in
1999/2000.
Ends