Government Financial Statements

4 June 2013

The Financial Statements of the Government of New Zealand for the ten months ended 30 April 2013 were released by the Treasury today.

These financial statements are compared against forecasts based on the Budget Economic and Fiscal Update (BEFU), released on 16 May 2013.

The Operating Balance before Gains and Losses (OBEGAL) was in deficit by $4.0 billion, which was $664 million lower than forecast primarily reflecting higher than expected tax revenue.

Core Crown tax revenue was $486 million higher than forecast, with corporate tax $532 million above forecast. Just over half this variance is thought to be the result of higher corporate profitability, partly resulting from continued strength in equity markets. The remainder is a timing difference with some large taxpayers filing returns in April, earlier than expected.

Core Crown expenses were close to forecast at $57.8 billion.

The operating balance surplus was $2.8 billion, $142 million below forecast. In addition to the $664 million lower OBEGAL deficit was a $759 million positive variance from the Crown’s investment portfolios, with the NZS Fund recording net gains of $737 million above forecast. Offsetting this result was an unfavourable variance in relation to ACC’s outstanding claims liability that was $1.5 billion above forecast, mainly due to a lower discount rate at the end of April compared to that used in the forecast.

The residual cash deficit was $529 million lower than expected. This reflected: • Higher tax receipts than forecast ($258 million or 0.6%), with GST and other direct taxes $112 million and $111 million higher than forecast respectively; and • Lower than expected operating payments ($287 million) due to a number of cash underspends, the largest by the Ministry of Education ($155 million).

Net debt was $441 million lower than forecast largely reflecting the residual cash result. Gross debt was $859 million above forecast at $79.7 billion (38.1% of GDP). This higher debt was mostly due to the Reserve Bank’s financial liabilities being higher than forecast ($763 million), as part of its normal liquidity management activities. This variance is net debt neutral because the higher holdings of liabilities were offset by (correspondingly) higher holdings of financial assets.

Full Year

April April June

2013 2013 Variance Variance 2013

BEFU to BEFU to BEFU BEFU

$ million Actual1 Forecast1 $m % Forecast2

Core Crown

Core Crown tax revenue 48,204 47,718 486 1.0 58,286 Core Crown revenue 52,667 52,243 424 0.8 63,809 Core Crown expenses 57,831 57,934 103 0.2 71,649 Core Crown residual cash (9,644) (10,173) 529 5.2 (7,750) Gross debt3 79,682 78,823 (859) (1.1) 78,636 as a percentage of GDP 38.1% 37.7% 36.8% Net debt4 60,055 60,496 441 0.7 57,945 as a percentage of GDP 28.7% 28.9% 27.1%

Total Crown

Operating balance before gains and losses (3,990) (4,653) 663 14.2 (6,285) Operating balance 2,810 2,953 (143) (4.8) 1,918 Net worth attributable to the Crown 62,187 62,446 (259) (0.4) 61,476

Year to date

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 $213,844 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 For enquiries: Kamlesh Patel Office of the Chief Financial Officer and Chief Accountant Telephone: +64 4 917 6094 E-mail: kamlesh.patel@treasury.govt.nz Financial Statements of the Government of New Zealand For the Ten Months Ended 30 April 2013 978-0-478-40348-0 (Print) 978-0-478-40349-7 (Online) Prepared by the Treasury 4 June 2013 This document is available on the New Zealand Treasury’s internet site. The URL for this site is http://www.treasury.govt.nz

C O N T E N T S

Commentary

Summary 2

Analysis 4

Year-on-Year Perspective 8

Financial Statements

Statement of Financial Performance 12

The statement outlines the operating results of the total Government (ie, the revenues and expenses of all departments + Reserve Bank + NZS Fund (core Crown), SOEs (including Air New Zealand), and Crown entities). Expense by functional class is also shown for total Crown and core Crown. Statement of Comprehensive Income 13 The statement reports changes in net worth due to the operating balance, items of income or expense that are recognised directly in net worth, the effect of certain accounting changes, and corrections of errors. Analysis of Expenses by Functional Classification 14 Breakdown of expenses by function for total Crown and core Crown. Statement of Cash Flows 15 The statement sets out the cash flows that result from the operating, investing and financing activities of the Government. The net cash flows from operations are reconciled to the operating balance reported in the statement of financial performance. Statement of Changes in Net Worth 17 The statement provides a reconciliation of opening and closing net worth for the period. Statement of Financial Position 18 The statement outlines the balance sheet of the total Government (ie, the assets and liabilities of the core Crown, SOEs, and Crown entities). Statement of Borrowings 19 The statement outlines total borrowings (split by sovereign-guaranteed debt and non sovereign-guaranteed debt), including the calculation of the core Crown debt indicators. Statement of Commitments 20 The statement outlines the commitments of the total Government by type and segment. Statement of Contingent Liabilities and Assets 20 The statement outlines the contingent liabilities and assets of the total Government by type and segment. Notes to the Financial Statements 21 The notes are an integral part of the financial statements, providing further explanatory material to that provided in the main statements.

COMMENTARY

2 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013

S U M M A R Y

The Financial Statements of the Government provide a record of the Government’s financial performance for the ten months ended 30 April 2013 and its financial position as at that date. The April results are reported against forecasts based on the 2013 Budget Economic and Fiscal Update (BEFU), published on 16 May 2013.

At a Glance

Table 1 – Key indicators for the ten months ended 30 April 2013 compared to BEFU Full Year

April April June

2013 2013 Variance Variance 2013

BEFU to BEFU to BEFU BEFU

$ million Actual1 Forecast1 $m % Forecast2

Core Crown

Total Crown

Operating balance before gains and losses (3,990) (4,653) 663 14.2 (6,285) Operating balance 2,810 2,953 (143) (4.8) 1,918 Net worth attributable to the Crown 62,187 62,446 (259) (0.4) 61,476 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 $213,844 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

Year to date

Core Crown includes Ministers, Departments, Offices of Parliament, the NZS Fund and the Reserve Bank of New Zealand but excludes State-owned enterprises and Crown entities.

Results for the ten months ended 30 April 2013 The Operating Balance Before Gains and Losses (OBEGAL) deficit was $664 million lower than forecast at $4.0 billion, primarily reflecting higher than expected tax revenue.

Core Crown expenses were close to forecast at $57.8 billion.

Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 3 The residual cash deficit was $529 million lower than expected. This reflected: • Higher tax receipts than forecast ($258 million or 0.6%), with GST and other direct taxes $112 million and $111 million higher than forecast respectively; and • Lower than expected operating payments ($287 million) due to a number of cash underspends, the largest by the Ministry of Education ($155 million).

Net debt was $441 million lower than forecast largely reflecting the residual cash result.

Gross debt was $859 million above forecast at $79.7 billion (38.1% of GDP). This higher debt was mostly due to the Reserve Bank’s financial liabilities being higher than forecast ($763 million), as part of its normal liquidity management activities. This variance is net debt neutral because the higher holdings of liabilities were offset by (correspondingly) higher holdings of financial assets. Further analysis of the April results follows.

Financial Statements of the Government of New Zealand – ten months ended 30 April 2013

A N A L Y S I S

Table 2 – Key indicator variances for the ten months ended 30 April 2013 compared to BEFU: Item/indicator Variance1 Key drivers

Core Crown

revenue

$424 million

(higher than forecast)

Core Crown tax revenue was the key driver of this result at $486m (1.0%) higher than forecast. The main component of this difference was:

Corporate tax: $532m (7.7%) above forecast. Just over half of this variance is thought to be the result of higher corporate profitability, partly resulting from continued strength in equity markets. The June quarter is the peak time for the filing of annual tax returns. If the May and June filers follow the lead of the April filers, then this portion of the variance could widen by year end. The remainder is a timing difference with some large taxpayers filing returns in April, earlier than expected.

Other tax types and other core Crown revenue were close to forecast. Core Crown expenses $103 million (lower than forecast) Core Crown expenses at $57.8b were 0.2% below forecast, with the main underspends being:

• Ministry of Education expenses were $56m below forecast, of which $24m relates to lower than forecast student numbers and lower uptake of demand driven programmes.

• NZDF expenses were $40m below forecast, of which $26m related to the deferral of various projects due to resourcing and contract issues, the unavailability of resources, cancellation of activities and the withdrawal of deployed forces from Afghanistan and East Timor. The majority of this underspend will persist to year end.

Core Crown

residual cash

deficit

$529 million

(lower than forecast)

Core Crown tax receipts were $258m higher than expected with:

• Other direct taxes $111m (6.5%) higher than expected. The level of dividend payments in March, was even bigger than the increase built in to the forecast. This has pushed resident withholding tax (RWT) in April well above forecast, but poses a downside risk to next year’s RWT receipts.

• While GST was $112m (1.1%) higher than expected, other tax types were close to forecast.

Operating payments were $287m lower than forecast, also driving down the forecast residual cash deficit, with the main cash underspends being:

• Ministry of Education cash payments were $155m below forecast mainly due to similar reasons as the expense variance.

• The balance was made up of reasonably small underspends across a number of departments.

Gross debt ($859 million)

(higher than forecast)

Gross debt at $79.7b was 1.1% higher than forecast largely owing to the Reserve Bank’s financial liabilities being higher than forecast ($763m). This balance tends to fluctuate during the year depending on liquidity requirements. This variance is net debt neutral because the higher holdings of liabilities were offset by (corresponding) higher holdings of financial assets.

1 Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.

Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 5 Item/indicator Variance1 Key drivers Net debt $441 million (lower than forecast) At $60.1b, or 28.7% of GDP, net debt was $441m below forecast. The result was largely owing to the better-than-expected residual cash result explained earlier.

Total Crown

Operating

balance before

gains and losses

deficit

$664 million

(lower than forecast)

The OBEGAL deficit at $4.0b was $664m lower than forecast.

The key drivers of the OBEGAL deficit were the impact of higher-than-expected tax revenue ($486m) and lower-than-expected core Crown expenditure ($103m) as discussed earlier.

Operating

balance

($142 million)

(lower than forecast)

In addition to the $664m lower OBEGAL deficit mentioned above was a $759m positive variance from the Crown’s investment portfolios, with the NZS Fund recording net gains of $737m above forecast.

Offsetting this result was an unfavourable variance in relation to ACC’s outstanding claims liability that was $1.5b above forecast. This was mainly due to a lower discount rate at the end of April compared to that used in the forecast.

Net worth

attributable to

the Crown

($259 million)

(lower than forecast)

Net worth was lower than forecast, at $62.2b, largely reflecting the operating balance result. 6 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 Table 3 – Fiscal Strategy and financial results 30 April 30 April 2013 2013 Annual Actual Forecast Variance Variance 2 Forecast $m $m $m % $m 1 27.6% 27.4% 27.3% 48,204 47,718 486 1.0 58,286 4,463 4,525 (62) (1.4) 5,523 (57,831) (57,934) 103 0.2 (71,649) 7,974 8,643 (669) (7.7) 9,758 2,810 2,952 (142) (4.8) 1,918 (7,381) (8,261) 880 10.7 (9,406) (2,650) (2,448) (202) (8.3) 1,562 (7,221) (7,757) 536 6.9 (5,926) (954) (927) (27) (2.9) (1,504) (1,469) (1,489) 20 1.3 (320) (9,644) (10,173) 529 5.2 (7,750) 50,671 50,671 - - 50,671 (260) (348) (88) (25.3) (476) 60,055 60,496 441 0.7 57,945 28.7% 28.9% 27.1% Ref Operating revenue Ensure sufficient operating revenue to meet the operating balance objective Operating expenses To control the growth in spending so that over time, core Crown expenses are reduced to below 30% of GDP Operating balance Return to an operating surplus sufficient to meet the Government's net capital requirements, including contributions to the New Zealand Superannuation Fund, and ensure consistency with the debt objective Debt Manage total debt at prudent levels ensuring net debt remains consistently below 35% of GDP and then brought back to a level no higher than 20% of GDP by 2020 Fiscal Strategy Financial Results Taxation as a % of GDP Core Crown taxation revenue ... ... combined with other core Crown revenue ... ... fund core Crown expenses... ... and some items do not impact cash ... ... leaving operating cash flows to ... ... meet the capital expenditure budget ... ... and make advances (e.g. to students and DHBs) With the residual cash ... ... when combined with opening net debt ... ... and fair value movements and other changes in financial assets and financial liabilities ... ... results in a closing net debt ... ... and as a % of GDP ... and with SOE and Crown entity results and core Crown gains and losses... ... result in an operating surplus or deficit... ...with income in SOEs, CEs and the NZS Fund retained...

1 GDP for the ten months ended 30 April 2013 (actual and forecast) is the actual data for the year ended 31 December 2012 (Source: Statistics New Zealand) pro-rated for ten months.

2 Percentage variances between the actual and comparative balances exceeding 500% are not shown. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 7 Figure 1 – Application of core Crown cash flows ($billions) This diagram shows how the Operating Balance translates into cash available to the core Crown and how this cash was spent.

Operating Back out Non-cash Core Core Crown cash Residual balance SOE/CE items Crown distributions cash surplus NZSF working operating (these items deficit retained capital cash increase the (funding surpluses movements deficit cash deficit) required) + + = = Advances and capital injections (eg student loans, DHBs) Purchase of physical assets (eg schools) 2.8 (7.4) (2.6) (7.2) (1.5) (0.9) (9.6)

8 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 Y E A R - O N - Y E A R P E R S P E C T I V E

Table 4 – Comparison with previous year

April April

2013 2012

Actual Actual Change1 Change

$m $m $m %

Statement of Financial Performance

Core Crown revenue

Taxation revenue 48,204 45,092 3,112 6.9 Other revenue 4,463 4,228 235 5.6 Total Core Crown Revenue 52,667 49,320 3,347 6.8 Core Crown expenses Social security and welfare 18,644 18,239 405 2.2 GSF pension expenses 231 158 73 46.2 Health 12,002 11,784 218 1.8 Education 9,837 9,735 102 1.0 Core government services 4,275 3,335 940 28.2 Law and order 2,840 2,793 47 1.7 Defence 1,461 1,424 37 2.6 Transport and communications 1,759 1,791 (32) (1.8) Economic and industrial services 1,637 1,674 (37) (2.2) Primary services 513 507 6 1.2 Heritage, culture and recreation 673 757 (84) (11.1) Environmental protection 390 629 (239) (38.0) Housing and community development 165 33 132 400.0 Other 357 328 29 8.8 Finance costs 3,047 2,945 102 3.5 Total Core Crown Expenses 57,831 56,132 1,699 3.0 Net surplus of SOE/CE's (and inter-segment eliminations) 1,174 870 304 34.9 OBEGAL (3,990) (5,942) 1,952 32.9 Total gains/(losses) 6,505 (3,262) 9,767 299.4 Other operating items 295 205 90 43.9 Operating Balance 2,810 (8,999) 11,809 131.2 Core Crown residual cash (9,644) (12,124) 2,481 20.5 Debt indicators Gross debt2 79,682 78,054 1,628 2.1 Net debt3 60,055 52,031 8,024 15.4 1 Due to the seasonal nature of some expenditure it is not appropriate to annualise these changes. 2 Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills. 3 Net core Crown debt excluding NZS Fund, student loans and other advances. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 9 Revenue and Expenses Core Crown taxation revenue for the ten months ended 30 April 2013 increased by $3,112 million (6.9%) on the same period last year. Other individuals’ tax continued to show strong growth (up 31.0% on last year driven by a higher effective tax rate) and both source deductions and corporate tax showing 5.0% and 7.3% growth respectively. Total core Crown expenses increased by $1,699 million (3.0%) on the same period last year: Functional expense Movement from previous year Main drivers of the change Increases: Core government services + $940 million Costs associated with earthquake-damaged horizontal water infrastructure in Canterbury were revised in March 2013. Social security and welfare + $405 million Indexation of welfare benefits and increase in recipient numbers, particularly NZ Superannuitants. Health + $218 million Funding provided in the 2012 Budget to maintain and improve existing service levels. Decreases: Environmental protection - $239 million Costs associated with the Emissions Trading Scheme (ETS) were lower than last year as fewer NZ units have been issued at lower prices. The lower issuance was related to the forestry industry, as they received a one-off allocation of units (if they opted into the scheme) in previous years. Also, lower worldwide demand for carbon credits and the global financial crisis has also seen the price per unit decrease. Other functional classes + $375 million Total $1,699 million Gains Total net gains were $6,505 million in the ten months to April 2013 due to strong returns on the Crown’s investment portfolio and actuarial gains for the Government Superannuation Fund (GSF) and ACC. In contrast, weak global equity markets in the first ten months of the 2011/12 financial year, plus increases in the valuation of the Crown’s long-term liabilities (primarily ACC and GSF), resulted in total net losses of $3,262 million to 30 April 2012. Debt Both net and gross debt have increased through the issuance of debt (primarily government stock) and the reduction in financial assets in order to meet cash deficits.

FINANCIAL STATEMENTS

12 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 S T A T E M E N T O F F I N A N C I A L P E R F O R M A N C E for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Note Actual Forecast Variance Forecast $m $m $m $m $m % $m Revenue 54,665 44,750 Taxation revenue 2 47,786 47,314 472 1.0 57,839 5,130 4,208 Other sovereign revenue 2 4,206 4,211 (5) (0.1) 5,126 Total Revenue Levied through the 59,795 48,958 Crown's Sovereign Power 51,992 51,525 467 0.9 62,965 16,785 13,536 Sales of goods and services 13,862 13,762 100 0.7 16,809 2,763 2,329 Interest revenue and dividends 3 2,375 2,473 (98) (4.0) 3,051 4,140 3,302 Other revenue 3,080 2,984 96 3.2 3,638 Total revenue earned through 23,688 19,167 the Crown's operations 19,317 19,219 98 0.5 23,498 83,483 68,125 Total revenue (excluding gains) 71,309 70,744 565 0.8 86,463 Expenses Social assistance and official 22,354 18,419 development assistance 4 18,770 18,801 31 0.2 22,918 19,475 16,023 Personnel expenses 5 16,686 16,723 37 0.2 20,156 6,350 3,695 Depreciation and amortisation 6 3,944 3,934 (10) (0.3) 4,858 35,678 28,697 Other operating expenses 6 29,540 29,728 188 0.6 37,628 4,290 3,411 Interest expenses 7 3,598 3,644 46 1.3 4,301 4,576 3,822 Insurance expenses 8 2,761 2,651 (110) (4.1) 3,165 - - Forecast new operating spending 6 - - - - 42 - - Top-down expense adjustment 6 - (83) (83) (100.0) (330) 92,723 74,067 Total expenses (excluding losses) 75,299 75,398 99 0.1 92,738 - - Forgone profits from partial share sales - - - - (10) (9,240) (5,942) Operating balance before gains/(losses) (3,990) (4,654) 664 14.3 (6,285) Net gains/(losses) on financial 692 767 instruments 9 6,312 5,553 759 13.7 5,859 Net gains/(losses) on non-financial (6,526) (4,029) instruments 10 193 1,741 (1,548) (88.9) 2,088 (5,834) (3,262) Total gains/(losses) 6,505 7,294 (789) (10.8) 7,947 Net surplus/(deficit) from associates 233 206 and joint ventures 219 235 (16) (6.8) 256 Operating balance from continuing (14,841) (8,998) activities 2,734 2,875 (141) (4.9) 1,918 - (1) Gain/(loss) from discontinued operations 76 77 (1) (1.3) - (56) - Attributable to minority interests - - - - - (14,897) (8,999) Operating balance 11 2,810 2,952 (142) (4.8) 1,918 The accompanying notes and accounting policies are an integral part of these statements. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 13 S T A T E M E N T O F C O M P R E H E N S I V E I N C O M E for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m Operating Balance (including minority (14,841) (8,999) interest) 2,810 2,953 (143) (4.8) 1,928 Other comprehensive income (6,461) (92) Revaluation of physical assets (38) (33) (5) (15.2) (29) Effective portion of changes in value of cash 108 62 flow hedges 66 175 (109) (62.3) 74 Net change in fair value of cash flow hedges 54 1 transferred to operating balance 2 2 - - (2) Net change in fair value of cash flow hedges (19) (23) transferred to the hedged item (1) 4 (5) (125.0) 4 Foreign currency translation differences (2) 95 for foreign operations (20) (12) (8) (66.7) 4 Valuation gains/(losses) on investments 13 11 available for sale taken to reserves 18 11 7 63.6 5 1 - Other movements 2 (2) 4 200.0 (21) (6,306) 54 Total other comprehensive income 29 145 (116) (80.0) 35 (21,147) (8,945) Total comprehensive income 2,839 3,098 (259) (8.4) 1,963 Attributable to: 84 - - minority interest - - - - 10 (21,231) (8,945) - the Crown 2,839 3,098 (259) (8.4) 1,953 (21,147) (8,945) Total comprehensive income 2,839 3,098 (259) (8.4) 1,963 The accompanying notes and accounting policies are an integral part of these statements. 14 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 A N A L Y S I S O F E X P E N S E S B Y F U N C T I O N A L C L A S S I F I C A T I O N for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m Total Crown expenses 25,457 21,140 Social security and welfare 21,550 21,528 (22) (0.1) 26,439 197 176 GSF pension expenses 237 239 2 0.8 287 13,650 11,283 Health 11,569 11,597 28 0.2 13,895 12,407 10,624 Education 10,547 10,604 57 0.5 13,119 5,305 3,395 Core government services 4,293 4,348 55 1.3 5,537 3,592 2,950 Law and order 3,014 3,018 4 0.1 3,732 1,693 1,386 Defence 1,434 1,481 47 3.2 1,780 10,259 7,006 Transport and communications 7,315 7,290 (25) (0.3) 8,805 10,018 7,794 Economic and industrial services 7,094 7,042 (52) (0.7) 8,634 1,588 1,318 Primary services 1,045 1,044 (1) (0.1) 1,732 2,446 1,960 Heritage, culture and recreation 2,081 2,102 21 1.0 2,514 627 667 Housing and community development 796 823 27 3.3 1,098 769 629 Environmental protection 369 364 (5) (1.4) 496 425 328 Other 357 357 - - 657 4,290 3,411 Finance costs 3,598 3,644 46 1.3 4,301 - - Forecast new operating spending - - - - 42 - - Top-down expense adjustment - (83) (83) (100.0) (330) 92,723 74,067 Total Crown expenses excluding losses 75,299 75,398 99 0.1 92,738 Below is an analysis of core Crown expenses by functional classification. Core Crown expenses include expenses incurred by the Crown, Departments and the Reserve Bank, but not Crown entities and SOEs. Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m Core Crown expenses 22,028 18,239 Social security and welfare 18,644 18,663 19 0.1 22,893 192 158 GSF pension expenses 231 231 - - 278 14,160 11,784 Health 12,002 12,021 19 0.2 14,526 11,654 9,735 Education 9,837 9,885 48 0.5 12,355 5,428 3,335 Core government services 4,275 4,328 53 1.2 5,572 3,403 2,793 Law and order 2,840 2,838 (2) (0.1) 3,511 1,736 1,424 Defence 1,461 1,515 54 3.6 1,822 2,232 1,791 Transport and communications 1,759 1,756 (3) (0.2) 2,352 2,157 1,674 Economic and industrial services 1,637 1,640 3 0.2 2,052 648 507 Primary services 513 512 (1) (0.2) 684 863 757 Heritage, culture and recreation 673 694 21 3.0 842 (130) 33 Housing and community development 165 190 25 13.2 317 769 629 Environmental protection 390 381 (9) (2.4) 519 425 328 Other 357 357 - - 657 3,511 2,945 Finance costs 3,047 3,006 (41) (1.4) 3,557 - - Forecast new operating spending - - - - 42 - - Top-down expense adjustment - (83) (83) (100.0) (330) 69,076 56,132 Core Crown expenses excluding losses 57,831 57,934 103 0.2 71,649 The accompanying notes and accounting policies are an integral part of these statements. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 15 S T A T E M E N T O F C A S H F L O W S for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m Cash Flows From Operations Cash was provided from 53,582 41,490 Taxation receipts 44,067 43,880 187 0.4 56,738 4,890 4,123 Other sovereign receipts 4,064 4,067 (3) (0.1) 4,758 16,812 13,817 Sales of goods and services 14,153 13,850 303 2.2 16,926 2,603 2,198 Interest and dividends 2,141 2,250 (109) (4.8) 2,821 4,395 3,697 Other operating receipts 4,836 5,086 (250) (4.9) 5,773 82,282 65,325 Total cash provided from operations 69,261 69,133 128 0.2 87,016 Cash was disbursed to Social assistance and official development 22,840 19,090 assistance 19,061 19,095 34 0.2 22,937 59,107 49,900 Personnel and operating payments 49,793 50,092 299 0.6 60,608 3,954 3,281 Interest payments 3,455 3,427 (28) (0.8) 4,366 - - Forecast new operating spending - - - - 42 - - Top-down expense adjustment - (83) (83) (100.0) (330) 85,901 72,271 Total cash disbursed to operations 72,309 72,531 222 0.3 87,623 (3,619) (6,946) Net cash flows from operations (3,048) (3,398) 350 10.3 (607) Cash Flows From Investing Activities Cash was provided from/(disbursed to) (5,766) (4,659) Net purchase of physical assets (4,275) (4,398) 123 2.8 (5,923) 424 4,686 Net purchase of shares and other securities 8,240 12,224 (3,984) (32.6) 8,981 (567) (483) Net purchase of intangible assets (395) (404) 9 2.2 (544) (1,284) (837) Net (issue)/repayment of advances (1,188) (1,182) (6) (0.5) (1,205) (115) 245 Net acquisition of investments in associates 232 225 7 3.1 1,724 - - Forecast new capital spending - - - - (2) - - Top-down capital adjustment - 70 (70) (100.0) 280 (7,308) (1,048) Net cash flows from investing activities 2,614 6,535 (3,921) (60.0) 3,311 Net cash flows from (10,927) (7,994) operating and investing activities (434) 3,137 (3,571) (113.8) 2,704 Cash Flows From Financing Activities Cash was provided from/(disbursed to) 203 250 Issues of circulating currency 260 282 (22) (7.8) 264 7,554 4,576 Net issue/(repayment) of Government bonds 4,523 4,720 (197) (4.2) 5,572 Net issue/(repayment) of foreign currency (6,422) (7,411) borrowing (1,661) (1,966) 305 15.5 (2,327) Net issue/(repayment) of other New Zealand 10,353 12,302 dollar borrowing 201 123 78 63.4 (263) (7) - Dividends paid to minority interests - - - - - 11,681 9,717 Net cash flows from financing activities 3,323 3,159 164 5.2 3,246 754 1,723 Net movement in cash 2,889 6,296 (3,407) (54.1) 5,950 9,801 9,801 Opening Cash Balance 10,686 10,686 - - 10,686 Foreign-exchange gains/(losses) on 131 73 opening cash (266) (152) (114) (75.0) (144) 10,686 11,597 Closing Cash Balance 13,309 16,830 (3,521) (20.9) 16,492 The accompanying notes and accounting policies are an integral part of these statements. 16 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 S T A T E M E N T O F C A S H F L O W S ( C O N T I N U E D ) for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m Reconciliation Between the Net Cash Flows from Operations and the Operating Balance (3,619) (6,946) Net Cash Flows from Operations (3,048) (3,398) 350 10.3 (607) Items included in the operating balance but not in net cash flows from operations Gains/(losses) 692 767 Gains/(losses) on financial instruments 6,312 5,553 759 13.7 5,859 Gains/(losses) on non-financial (6,526) (4,029) instruments 193 1,741 (1,548) (88.9) 2,088 (5,834) (3,262) Total gains/(losses) 6,505 7,294 (789) (10.8) 7,947 Other Non-cash Items in Operating Balance (6,350) (3,695) Depreciation and amortisation (3,944) (3,934) (10) (0.3) (4,858) Write-down on initial recognition of (850) (761) financial assets (612) (598) (14) (2.3) (751) Impairment of financial assets 248 66 (excluding receivables) 11 11 - - 15 Non-cash movement in defined benefit 512 385 retirement plan liabilities 308 308 - - 395 1,070 760 Non-cash movement in insurance liabilities 240 495 (255) (51.5) 1,222 232 204 Other 213 235 (22) (9.4) 258 (5,138) (3,041) Total other non-cash Items (3,784) (3,483) (301) (8.6) (3,719) Movements in Working Capital (242) 2,300 Increase/(decrease) in receivables 1,710 1,764 (54) (3.1) (1,381) (175) 2 Increase/(decrease) in accrued interest 92 6 86 - 295 (74) 5 Increase/(decrease) in inventories (45) 17 (62) (364.7) 14 32 266 Increase/(decrease) in prepayments 258 223 35 15.7 64 (38) 24 Decrease/(increase) in deferred revenue 94 95 (1) (1.1) 132 191 1,653 Decrease/(increase) in payables/provisions 1,028 434 594 136.9 (827) (306) 4,250 Total movements in working capital 3,137 2,539 598 23.6 (1,703) (14,897) (8,999) Operating Balance 2,810 2,952 (142) (4.8) 1,918 The accompanying notes and accounting policies are an integral part of these statements. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 17 S T A T E M E N T O F C H A N G E S I N N E T W O R T H for the ten months ended 30 April 2013 Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m 80,887 80,887 Opening net worth 59,780 59,780 - - 59,780 (14,897) (8,999) Operating balance (excluding minority interest) 2,810 2,953 (143) (4.8) 1,918 (6,461) (92) Net revaluations (38) (33) (5) (15.2) (29) 80 73 Transfers to/(from) reserves 83 186 (103) (55.4) 55 (Gains)/losses transferred to the 83 1 statement of financial performance 3 3 - - (4) (36) 72 Other movements (19) (11) (8) (72.7) 13 (21,231) (8,945) Comprehensive income attributable to the Crown 2,839 3,098 (259) (8.4) 1,953 - - Gain on Government share offers - - - - 175 Increase in minority interest from Government - - share offers - - - - 1,325 124 - Transactions with minority interest - - - - 37 59,780 71,942 Closing net worth 62,619 62,878 (259) (0.4) 63,270 Attributable to: 432 308 - minority interest 432 432 - - 1,794 59,348 71,634 - the Crown 62,187 62,446 (259) (0.4) 61,476 59,780 71,942 Closing net worth 62,619 62,878 (259) (0.4) 63,270 The accompanying notes and accounting policies are an integral part of these Statements. 18 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 S T A T E M E N T O F F I N A N C I A L P O S I T I O N as at 30 April 2013 As at As at 30 Jun 30 April 2012 2012 Annual Actual Actual Note Actual Forecast Variance Forecast $m $m $m $m $m % $m Assets 10,686 11,597 Cash and cash equivalents 12 13,309 16,830 (3,521) (20.9) 16,492 20,956 24,139 Receivables 12 22,459 22,336 123 0.6 19,189 Marketable securities, deposits and 48,385 44,684 derivatives in gain 12 42,411 37,451 4,960 13.2 40,392 14,385 14,402 Share investments 12 16,725 16,441 284 1.7 16,616 21,766 21,545 Advances 12 23,587 23,594 (7) - 23,432 1,234 1,314 Inventory 1,189 1,251 (62) (5.0) 1,248 2,134 2,350 Other assets 2,501 2,387 114 4.8 2,064 108,584 116,472 Property, plant & equipment 13 108,080 108,486 (406) (0.4) 109,334 9,483 9,596 Equity accounted investments 1 9,587 9,612 (25) (0.3) 9,509 2,705 2,406 Intangible assets and goodwill 2,619 2,592 27 1.0 2,687 - - Forecast for new capital spending - - - - 2 - - Top-down capital adjustment - (70) 70 100.0 (280) 240,318 248,505 Total assets 242,467 240,910 1,557 0.6 240,685 Liabilities 4,457 4,504 Issued currency 4,717 4,774 57 1.2 4,756 11,604 12,237 Payables 15 10,123 11,021 898 8.1 11,822 1,712 1,650 Deferred revenue 1,618 1,617 (1) (0.1) 1,579 100,534 99,061 Borrowings 102,133 101,265 (868) (0.9) 100,780 41,186 40,830 Insurance liabilities 16 41,777 40,005 (1,772) (4.4) 38,917 13,539 11,982 Retirement plan liabilities 12,314 12,314 - - 12,227 7,506 6,299 Provisions 17 7,166 7,036 (130) (1.8) 7,334 180,538 176,563 Total liabilities 179,848 178,032 (1,816) (1.0) 177,415 59,780 71,942 Total assets less total liabilities 62,619 62,878 (259) (0.4) 63,270 Net Worth 3,520 9,541 Taxpayer funds 18 6,540 6,479 61 0.9 5,601 56,001 62,246 Revaluation reserve 18 55,756 55,961 (205) (0.4) 55,965 (173) (153) Other reserves 18 (109) 6 (115) - (90) 59,348 71,634 Total net worth attributable to the Crown 62,187 62,446 (259) (0.4) 61,476 Net worth attributable to 432 308 minority interest 432 432 - - 1,794 59,780 71,942 Total net worth 62,619 62,878 (259) (0.4) 63,270 1. Tertiary education institutions constitute most equity accounted investments. The accompanying notes and accounting policies are an integral part of these statements. Current Year Actual vs Forecast Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 19 S T A T E M E N T O F B O R R O W I N G S as at 30 April 2013 As at As at 30 Jun 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m 53,849 51,054 Government bonds1 59,404 58,647 (757) (1.3) 58,713 8,954 8,959 Treasury bills 4,927 4,917 (10) (0.2) 3,576 229 237 Government retail stock 200 204 4 2.0 204 5,917 6,584 Settlement deposits with Reserve Bank 7,128 7,183 55 0.8 7,183 2,807 2,829 Derivatives in loss 2,541 2,132 (409) (19.2) 2,035 1,515 1,092 Finance lease liabilities 1,336 1,344 8 0.6 1,499 27,263 28,306 Other borrowings 26,597 26,838 241 0.9 27,570 100,534 99,061 Total borrowings 102,133 101,265 (868) (0.9) 100,780 75,701 73,880 Sovereign-guaranteed debt 77,212 75,953 (1,259) (1.7) 74,924 24,833 25,181 Non sovereign-guaranteed debt 24,921 25,312 391 1.5 25,856 100,534 99,061 Total borrowings 102,133 101,265 (868) (0.9) 100,780 Net Debt: 84,680 83,609 Core Crown borrowings2 85,901 85,488 (413) (0.5) 85,310 Add back NZS Fund holdings of sovereign- (512) (449) issued debt and NZS Fund borrowings (542) (901) (359) (39.8) (883) 84,168 83,160 Gross sovereign-issued debt3 85,359 84,587 (772) (0.9) 84,427 64,017 61,760 Less core Crown financial assets4 60,118 58,661 1,457 2.5 61,257 20,151 21,400 Net core Crown debt 25,241 25,926 685 2.6 23,170 13,324 12,856 Core crown advances 13,610 13,588 (22) (0.2) 13,445 33,475 34,256 Net core Crown debt (incl NZS Fund)5 38,851 39,514 663 1.7 36,615 Add back NZS Fund holdings of core Crown 17,196 17,775 financial assets and NZS Fund fin assets6 21,204 20,982 (222) (1.1) 21,330 50,671 52,031 Net core Crown debt (excl NZS Fund and advances)7 60,055 60,496 441 0.7 57,945 Gross Debt: 84,168 83,160 Gross sovereign-issued debt3 85,359 84,587 (772) (0.9) 84,427 Less Reserve Bank settlement cash and (6,133) (6,706) Reserve Bank bills (7,277) (7,364) (87) (1.2) (7,391) Add back changes to DMO borrowing due 1,600 1,600 to settlement cash8 1,600 1,600 - - 1,600 79,635 78,054 Gross sovereign-issued debt excluding Reserve Bank settlement cash and Reserve bank bills 79,682 78,823 (859) (1.1) 78,636 Notes on gross and net debt: 1. Government bonds includes $395 million of infrastructure bonds. 2. Core Crown borrowings in this instance includes unsettled purchases of securities (classified as accounts payable in the statement of financial position). 3. Gross Sovereign-Issued Debt (GSID) represents debt issued by the sovereign (the core Crown) and includes Government stock held by the New Zealand Superannuation Fund (NZS Fund), ACC and EQC. 4. Core Crown financial assets exclude receivables. 5. Net Core Crown Debt represents GSID less financial assets. This can provide information about the sustainability of the Government's accounts, and is used by some international agencies when determining the creditworthiness of a country. 6. Adding back the NZS Fund assets provides the financial liabilities less financial assets of the Core Crown, excluding those assets set aside to meet part of the future cost of New Zealand superannuation. 7. Net Core Crown Debt (excluding NZS Fund and advances) excludes financial assets which are held for public policy rather than treasury management purposes. 8. The Reserve Bank has used $1.6 billion of settlement cash to purchase reserves that were to have been funded by the NZ Debt Management Office borrowing. Therefore, the impact of settlement cash on GSID is adjusted by this amount. The accompanying notes and accounting policies are an integral part of these statements. 20 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 S T A T E M E N T O F C O M M I T M E N T S as at 30 April 2013 As at As at As at 30 April 30 Jun 30 April 2013 2012 2012 $m $m $m Capital Commitments Specialist military equipment 88 239 322 Land and buildings 832 697 616 Other property, plant and equipment 6,360 6,001 6,922 Other capital commitments 656 572 408 Tertiary Education Institutions 255 255 413 Total capital commitments 8,191 7,764 8,681 Operating Commitments Non-cancellable accommodation leases 2,540 2,719 2,786 Other non-cancellable leases 3,420 3,549 2,966 Tertiary Education Institutions 282 282 366 Total operating commitments 6,242 6,550 6,118 Total commitments 14,433 14,314 14,799 Total Commitments by Segment Core Crown 5,365 15,685 7,444 Crown entities 6,306 7,753 7,575 State-owned Enterprises 5,503 5,300 6,864 Inter-segment eliminations (2,741) (14,424) (7,084) Total commitments 14,433 14,314 14,799 S T A T E M E N T O F C O N T I N G E N T L I A B I L I T I E S A N D A S S E T S as at 30 April 2013 As at As at As at 30 April 30 Jun 30 April 2013 2012 2012 $m $m $m Quantifiable Contingent Liabilities Guarantees and indemnities 164 430 461 Uncalled capital 5,764 6,327 6,171 Legal proceedings and disputes 406 411 356 Other contingent liabilities 378 584 976 Total quantifiable contingent liabilities 6,712 7,752 7,964 Total Quantifiable Contingent Liabilities by Segment Core Crown 6,463 7,622 7,741 Crown entities 79 40 89 State-owned Enterprises 170 90 134 Inter-segment eliminations - - - Total quantifiable contingent liabilities 6,712 7,752 7,964 Quantifiable Contingent Assets Core Crown 336 224 684 Crown entities 3 162 20 State owned enterprises 21 24 - Inter-segment eliminations - - - Total quantifiable contingent assets 360 410 704 The accompanying notes and accounting policies are an integral part of these statements. A list of unquantified contingent liabilities is included on the Treasury's website http://www.treasury.govt.nz/budget/forecasts/befu2013/035.htm Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 21 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S NOTE 1: Accounting Policies Reporting Entity These financial statements are the consolidated financial statements for the Government reporting entity as specified in Part III of the Public Finance Act 1989. This comprises: • Ministers of the Crown • Departments • Offices of Parliament • New Zealand Superannuation Fund • State-Owned Enterprises (SOEs) • Reserve Bank of New Zealand • Crown Entities • Air New Zealand Limited A schedule of the entities that are included in the Government reporting entity was set out on pages 85 and 86 of the BEFU released on 16 May 2013. With the exception of the 30 June 2012 comparative figures, all actual, forecast and comparative figures presented in these financial statements are unaudited. Basis of Preparation and General Accounting Policies These unaudited interim financial statements of the Government reporting entity comply with generally accepted accounting practice and with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS) as applicable for public benefit entities, including NZ IAS 34 Interim Financial Reporting. The Government reporting entity is a public benefit entity. The measurement base applied is historical cost adjusted for revaluations of property, plant and equipment (where appropriate), commercial forests; and marketable securities, deposits and equity investments held for trading purposes. The accrual basis of accounting has been used unless otherwise stated. These financial statements have been prepared on a going concern basis. These interim financial statements have been prepared using the same accounting policies and methods of computation as, and should be read in conjunction with, the information included in the Financial Statements of the Government of New Zealand for the year ended 30 June 2012. Specific Accounting Policies The specific accounting policies of the Crown are detailed on the Treasury’s internet site: http://www.treasury.govt.nz/publications/guidance/reporting/accounting Forecasts The annual forecasts in these financial statements are for the year to 30 June 2013. The accounting policies underlying the preparation of forecasts are set out in the Statement of Accounting Policies reproduced in full on the Treasury’s internet site http://www.treasury.govt.nz/budget/forecasts/befu2013 22 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S NOTE 1: Accounting Policies (continued) Comparative Figures When presentation or classification of items in the financial statements is amended or accounting policies are changed voluntarily, comparative figures have been restated to ensure consistency with the current period unless it is impracticable to do so. Variance Percentages Percentage variances between the actual and comparative balances exceeding 500% are not shown. Judgements and Estimates The preparation of these financial statements requires judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. For example, the present value of large cash flows that are predicted to occur a long time into the future, as with the settlement of ACC outstanding claim obligations and Government Superannuation retirement benefits, depends critically on judgements regarding future cash flows, including inflation assumptions and the risk free discount rate used to calculate present values. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances.

Actual results may differ from these estimates. A second area of uncertainty relates to the immature nature of the claims experience available to assist in estimating the claims and provisions arising from the Canterbury earthquakes. Actuarial valuations of these liabilities using the best available information have been used, however it is common in such cases for adjustments to be required as the claims experience develops. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 23 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S

Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 2: Sovereign Revenue (Accrual) Taxation Revenue (accrual) Individuals 21,237 17,559 Source deductions 18,443 18,583 (140) (0.8) 22,387 4,232 3,531 Other persons 4,228 4,180 48 1.1 5,026 (1,736) (1,209) Refunds (1,061) (1,019) (42) (4.1) (1,473) 462 396 Fringe benefit tax 394 400 (6) (1.5) 460 24,195 20,277 Total individuals 22,004 22,144 (140) (0.6) 26,400 Corporate Tax 8,310 6,472 Gross companies tax 6,892 6,393 499 7.8 8,372 (202) (180) Refunds (131) (163) 32 19.6 (197) 500 362 Non-resident withholding tax 326 335 (9) (2.7) 448 4 4 Foreign-source dividend w/holding payments 2 - 2 - - 8,612 6,658 Total corporate tax 7,089 6,565 524 8.0 8,623 Other Income Tax 1,679 1,365 Resident w/holding tax on interest income 1,344 1,321 23 1.7 1,602 292 223 Resident w/holding tax on dividend income 404 347 57 16.4 394 1,971 1,588 Total other income tax 1,748 1,668 80 4.8 1,996 34,778 28,523 Total income tax 30,841 30,377 464 1.5 37,019 Goods and Services Tax 25,199 20,584 Gross goods and services tax 20,613 20,620 (7) - 25,490 (10,627) (8,744) Refunds (8,206) (8,209) 3 - (10,085) 14,572 11,840 Total goods and services tax 12,407 12,411 (4) - 15,405 Other Taxation 1,045 872 Road user charges 891 889 2 0.2 1,062 847 690 Petroleum fuels excise - domestic production 708 724 (16) (2.2) 878 656 536 Alcohol excise - domestic production 553 556 (3) (0.5) 656 244 235 Tobacco excise - domestic production 273 276 (3) (1.1) 288 631 526 Petroleum fuels excise - imports1 540 520 20 3.8 611 241 201 Alcohol excise - imports1 214 215 (1) (0.5) 258 993 780 Tobacco excise - imports1 809 787 22 2.8 986 173 149 Other customs duty 157 158 (1) (0.6) 182 216 182 Gaming duties 181 189 (8) (4.2) 225 175 145 Motor vehicle fees 148 147 1 0.7 178 58 43 Approved issuer levy and cheque duty 38 39 (1) (2.6) 55 36 28 Energy resources levies 26 26 - - 36 5,315 4,387 Total other indirect taxation 4,538 4,526 12 0.3 5,415 19,887 16,227 Total indirect taxation 16,945 16,937 8 - 20,820 54,665 44,750 Total taxation revenue 47,786 47,314 472 1.0 57,839 Other Sovereign Revenue (accrual) 3,695 3,103 ACC levies 2,833 2,840 (7) (0.2) 3,409 326 267 Fire Service levies 268 271 (3) (1.1) 333 107 82 EQC levies 196 196 - - 240 1,002 756 Other miscellaneous items 909 904 5 0.6 1,144 5,130 4,208 Total other sovereign revenue 4,206 4,211 (5) (0.1) 5,126 59,795 48,958 Total sovereign revenue 51,992 51,525 467 0.9 62,965 1. Customs excise-equivalent duty 24 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 2 (continued): Sovereign Receipts (Cash) Income Tax Receipts (cash) Individuals 21,010 17,362 Source deductions 18,332 18,379 (47) (0.3) 22,240 4,720 3,502 Other persons 3,839 3,858 (19) (0.5) 5,278 (2,468) (1,977) Refunds (1,731) (1,752) 21 1.2 (2,252) 458 341 Fringe benefit tax 342 343 (1) (0.3) 458 23,720 19,228 Total individuals 20,782 20,828 (46) (0.2) 25,724 Corporate Tax 8,792 6,537 Gross companies tax 6,649 6,768 (119) (1.8) 8,754 (814) (547) Refunds (496) (544) 48 8.8 (667) 434 351 Non-resident withholding tax 368 359 9 2.5 448 4 5 Foreign-source dividend w/holding payments 2 - 2 - - 8,416 6,346 Total corporate tax 6,523 6,583 (60) (0.9) 8,535 Other Income Tax 1,699 1,425 Resident w/holding tax on interest income 1,374 1,356 18 1.3 1,601 290 257 Resident w/holding tax on dividend income 455 363 92 25.3 394 1,989 1,682 Total other income tax 1,829 1,719 110 6.4 1,995 34,125 27,256 Total income tax 29,134 29,130 4 - 36,254 Goods and Services Tax 24,574 18,417 Gross goods and services tax 18,482 18,222 260 1.4 24,855 (10,435) (8,568) Refunds (8,127) (8,075) (52) (0.6) (9,785) 14,139 9,849 Total goods and services tax 10,355 10,147 208 2.0 15,070 Other Taxation 1,048 874 Road user charges 886 889 (3) (0.3) 1,062 845 709 Petroleum fuels excise - domestic production 724 731 (7) (1.0) 878 654 552 Alcohol excise - domestic production 564 563 1 0.2 656 238 224 Tobacco excise - domestic production 275 279 (4) (1.4) 288 2,057 1,660 Customs duty 1,760 1,740 20 1.1 2,037 216 183 Gaming duties 181 188 (7) (3.7) 224 169 115 Motor vehicle fees 124 147 (23) (15.6) 178 55 40 Approved issuer levy and cheque duty 38 40 (2) (5.0) 55 36 28 Energy resources levies 26 26 - - 36 5,318 4,385 Total other indirect taxation 4,578 4,603 (25) (0.5) 5,414 19,457 14,234 Total indirect taxation 14,933 14,750 183 1.2 20,484 53,582 41,490 Total tax receipts collected 44,067 43,880 187 0.4 56,738 Other Sovereign Receipts (cash) 3,693 3,143 ACC levies 2,979 2,966 13 0.4 3,427 326 267 Fire Service levies 268 271 (3) (1.1) 333 134 85 EQC levies 228 226 2 0.9 276 737 628 Other miscellaneous items 589 604 (15) (2.5) 722 4,890 4,123 Total other sovereign receipts 4,064 4,067 (3) (0.1) 4,758 58,472 45,613 Total sovereign receipts 48,131 47,947 184 0.4 61,496 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 25 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 3: Interest Revenue and Dividends By type 2,293 1,952 Interest revenue 1,948 2,044 (96) (4.7) 2,517 470 377 Dividends 427 429 (2) (0.5) 534 2,763 2,329 Total interest revenue and dividends 2,375 2,473 (98) (4.0) 3,051 By source 1,795 1,559 Core Crown 1,774 1,865 (91) (4.9) 2,196 1,181 957 Crown entities 1,007 1,001 6 0.6 1,204 858 708 State-owned Enterprises 696 695 1 0.1 822 (1,071) (895) Inter-segment eliminations (1,102) (1,088) (14) (1.3) (1,171) 2,763 2,329 Total interest revenue and dividends 2,375 2,473 (98) (4.0) 3,051 NOTE 4: Transfer Payments and Subsidies 9,584 7,923 New Zealand superannuation 8,460 8,459 (1) - 10,235 1,811 1,511 Domestic purposes benefit 1,457 1,456 (1) (0.1) 1,738 1,325 1,103 Invalids benefit 1,106 1,106 - - 1,329 775 645 Sickness benefit 652 653 1 0.2 782 883 754 Unemployment benefit 691 690 (1) (0.1) 806 2,082 1,684 Family tax credit 1,621 1,660 39 2.3 2,047 599 464 Other working for families tax credits 455 453 (2) (0.4) 572 1,195 999 Accommodation assistance 984 984 - - 1,178 580 483 Income related rents 517 514 (3) (0.6) 637 401 336 Disability assistance 320 321 1 0.3 385 644 507 Student allowances 476 472 (4) (0.8) 592 1,277 1,066 Other social assistance benefits 1,135 1,137 2 0.2 1,377 21,156 17,475 Total social assistance grants 17,874 17,905 31 0.2 21,678 Subsidies 688 569 KiwiSaver 595 594 (1) (0.2) 738 Other transfer payments 510 375 Official development assistance 301 302 1 0.3 502 22,354 18,419 Total transfer payments and subsidies 18,770 18,801 31 0.2 22,918 NOTE 5: Personnel Expenses 5,915 4,818 Core Crown 4,980 4,997 17 0.3 6,071 10,754 8,900 Crown entities 9,259 9,270 11 0.1 11,148 2,819 2,314 State-owned Enterprises 2,456 2,464 8 0.3 2,947 (13) (9) Inter-segment eliminations (9) (8) 1 12.5 (10) 19,475 16,023 Total personnel expenses 16,686 16,723 37 0.2 20,156 NOTE 6: Operating Expenses By type 6,350 3,695 Depreciation and amortisation 3,944 3,934 (10) (0.3) 4,858 35,678 28,697 Other operating expenses 29,540 29,728 188 0.6 37,628 - - Forecast new operating spending - - - - 42 - - Top-down expense adjustment - (83) (83) (100.0) (330) 42,028 32,392 Total operating expenses 33,484 33,579 95 0.3 42,198 By source 37,278 29,935 Core Crown 31,031 31,130 99 0.3 39,096 17,897 14,919 Crown entities 15,167 15,285 118 0.8 18,628 13,174 9,151 State-owned Enterprises 9,528 9,447 (81) (0.9) 11,668 (26,321) (21,613) Inter-segment eliminations (22,242) (22,283) (41) (0.2) (27,194) 42,028 32,392 Total operating expenses 33,484 33,579 95 0.3 42,198 26 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S Year 10 months to 30 Jun to 30 April Current Year Actual vs Forecast 2012 2012 Annual Actual Actual Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 7: Interest Expenses By type 4,223 3,374 Interest on financial liabilities 3,561 3,606 45 1.2 4,255 67 37 Interest unwind on provisions 37 38 1 2.6 46 4,290 3,411 Total interest expenses 3,598 3,644 46 1.3 4,301 By source 3,511 2,945 Core Crown 3,047 3,006 (41) (1.4) 3,557 246 205 Crown entities 197 198 1 0.5 236 1,268 911 State-owned Enterprises 942 993 51 5.1 1,152 (735) (650) Inter-segment eliminations (588) (553) 35 6.3 (644) 4,290 3,411 Total interest expenses 3,598 3,644 46 1.3 4,301 NOTE 8: Insurance Expenses By entity 3,010 2,565 ACC 2,655 2,586 (69) (2.7) 3,136 1,073 989 EQC 100 107 7 6.5 98 586 254 Southern Response (formerly AMI Insurance) 8 (36) (44) (122.2) (58) 20 14 Other insurance expenses 19 8 (11) (137.5) 13 (113) - Inter-segment eliminations (21) (14) 7 50.0 (24) 4,576 3,822 Total insurance expenses 2,761 2,651 (110) (4.1) 3,165 NOTE 9: Gains and Losses on Financial Instruments By source 526 935 Core Crown 4,422 3,685 737 20.0 3,944 930 808 Crown entities 1,873 1,482 391 26.4 1,529 9 (386) State-owned Enterprises (29) 55 (84) (152.7) 61 (773) (590) Inter-segment eliminations 46 331 (285) (86.1) 325 692 767 Net gains/(losses) on financial instruments 6,312 5,553 759 13.7 5,859 NOTE 10: Gains and Losses on Non-Financial Instruments By type (3,896) (2,212) Actuarial gains/(losses) on GSF liability 1 918 918 - - 918 (2,942) (2,276) Actuarial gains/(losses) on ACC liability 2 (830) 686 (1,516) (221.0) 1,047 312 459 Other 105 137 (32) (23.4) 123 Net gains/(losses) on non-financial (6,526) (4,029) instruments 193 1,741 (1,548) (88.9) 2,088 By source (3,790) (2,131) Core Crown 1,108 1,124 (16) (1.4) 1,121 (2,956) (2,288) Crown entities (900) 619 (1,519) (245.4) 967 220 390 State-owned Enterprises (15) (2) (13) - (1) - - Inter-segment eliminations - - - - 1 Net gains/(losses) on non-financial (6,526) (4,029) instruments 193 1,741 (1,548) (88.9) 2,088 1. The most recent GSF valuation was as at 28 February 2013. 2. The most recent ACC valuation was as at 31 December 2012, updated monthly for changes to discount rates. Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 27 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S As at As at Current Year Actual vs Forecast 30 June 30 April Annual 2012 2012 Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 11: Operating Balance By source (11,671) (7,966) Core Crown 404 (830) 1,234 148.7 (2,700) (641) (200) Crown entities 2,653 3,732 (1,079) (28.9) 4,307 (1,423) 383 State-owned Enterprises 470 508 (38) (7.5) 456 (1,162) (1,216) Inter-segment eliminations (717) (458) (259) (56.6) (145) (14,897) (8,999) Total operating balance 2,810 2,952 (142) (4.8) 1,918 NOTE 12: Financial Assets and Sovereign Receivables 10,686 11,597 Cash and cash equivalents 13,309 16,830 (3,521) (20.9) 16,492 7,257 9,656 Tax receivables 9,945 9,806 139 1.4 7,323 13,699 14,483 Trade and other receivables 12,514 12,530 (16) (0.1) 11,866 8,291 7,995 Student loans 8,743 8,727 16 0.2 8,528 12,445 12,319 Kiwibank mortgages 13,051 13,089 (38) (0.3) 13,261 2,422 2,302 Long-term deposits 2,051 1,776 275 15.5 2,013 2,249 2,213 IMF financial assets 2,129 2,185 (56) (2.6) 2,191 1,030 1,231 Other advances1 1,793 1,778 15 0.8 1,643 14,385 14,402 Share investments 16,725 16,441 284 1.7 16,616 5,032 4,609 Derivatives in gain 5,196 5,140 56 1.1 4,797 38,682 35,560 Other marketable securities 33,035 28,350 4,685 16.5 31,391 116,178 116,367 Total financial assets and sovereign receivables 118,491 116,652 1,839 1.6 116,121 Financial assets by entity 26,062 22,924 NZDMO 15,235 14,948 287 1.9 17,307 17,573 18,250 Reserve Bank of New Zealand 19,292 18,291 1,001 5.5 18,332 18,703 19,033 NZ Superannuation Fund 22,591 22,266 325 1.5 22,624 20,567 22,875 Other core Crown 25,159 24,626 533 2.2 20,547 (7,924) (8,552) Intra-segment eliminations (8,978) (8,553) (425) (5.0) (7,194) 74,981 74,530 Total core Crown segment 73,299 71,578 1,721 2.4 71,616 25,340 26,454 ACC portfolio 29,226 29,687 (461) (2) 29,686 7,252 7,404 EQC portfolio 6,049 5,974 75 1 5,687 11,168 8,953 Other Crown entities 10,851 10,504 347 3 10,368 (3,685) (3,508) Intra-segment eliminations (3,686) (3,683) (3) (0.1) (3,635) 40,075 39,303 Total Crown entities segment 42,440 42,482 (42) (0.1) 42,106 19,186 21,137 Total State-owned enterprises segment 20,086 20,227 (141) (0.7) 20,685 (18,064) (18,603) Inter-segment eliminations (17,334) (17,635) 301 1.7 (18,286) 116,178 116,367 Total financial assets 118,491 116,652 1,839 1.6 116,121 1. Other advances includes finance lease receivables. 28 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S As at As at 30 June 30 April Annual 2012 2012 Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 13: Property, Plant and Equipment Net Carrying Value By class of asset: 33,626 35,032 Land (valuation)1 33,429 33,482 (53) (0.2) 34,021 25,046 24,435 Buildings (valuation) 24,800 24,796 4 - 25,015 17,546 18,239 State highways (valuation) - excluding land 18,063 18,134 (71) (0.4) 17,989 14,400 14,745 Electricity generation assets (valuation) 13,772 13,807 (35) (0.3) 13,911 3,476 3,140 Electricity distribution network (cost) 3,790 3,924 (134) (3.4) 3,989 3,220 3,235 Specialist military equipment (valuation) 3,100 3,109 (9) (0.3) 3,196 2,514 2,462 Specified cultural and heritage assets (valuation) 2,496 2,502 (6) (0.2) 2,481 2,250 2,183 Aircraft (excl military) (valuation) 2,322 2,273 49 2.2 2,240 856 7,257 Rail network (valuation) - excluding land 1,061 1,091 (30) (2.7) 866 5,650 5,744 Other plant and equipment (cost) 5,247 5,368 (121) (2.3) 5,626 108,584 116,472 Total net carrying value 108,080 108,486 (406) (0.4) 109,334 By source: 29,377 29,251 Core Crown 28,966 29,024 (58) (0.2) 29,561 49,939 49,119 Crown entities 50,406 50,487 (81) (0.2) 50,715 29,268 38,102 State-owned enterprises 28,708 28,975 (267) (0.9) 29,058 - - Inter-segment eliminations - - - - - 108,584 116,472 Total net carrying value 108,080 108,486 (406) (0.4) 109,334 Land breakdown by usage 1 8,744 8,405 Housing stock 8,668 8,670 (2) - 8,787 8,353 7,413 State highway corridor land 8,353 8,353 - - 8,503 5,454 5,690 Conservation estate 5,425 5,425 - - 5,444 3,260 5,641 Rail network corridor land 3,256 3,256 - - 3,386 2,726 2,707 Schools 2,703 2,727 (24) (0.9) 2,726 1,471 1,541 Commercial (SOE) excluding rail 1,466 1,497 (31) (2.1) 1,497 3,618 3,635 Other 3,558 3,554 4 0.1 3,678 33,626 35,032 Total land 33,429 33,482 (53) (0.2) 34,021 1. Land relating to state highways, the rail network and conservation which had previously been included within the State highways, Rail network and specified cultural and heritage assets categories has been reclassified to the Land category. Schedule of movements Cost or valuation 126,601 126,601 Opening balance 121,717 121,717 - - 121,717 6,514 5,416 Additions 4,241 4,492 (251) (5.6) 6,307 (941) (441) Disposals (826) (675) (151) (22.4) (692) (9,793) (40) Net revaluations (51) 7 (58) - 7 (664) 105 Other2 (1,110) (979) (131) (13.4) (750) 121,717 131,641 Total cost or valuation 123,971 124,562 (591) (0.5) 126,589 Accumulated depreciation and impairment 11,747 11,747 Opening balance 13,133 13,133 - - 13,133 (634) (347) Eliminated on disposal (246) (163) (83) (50.9) (87) (3,415) (41) Eliminated on revaluation (49) - (49) - (1) 5,687 3,191 Depreciation expense and impairment losses 3,442 3,437 5 0.1 4,263 (252) 619 Other2 (389) (331) (58) (17.5) (53) 13,133 15,169 Total accumulated depreciation and impairment 15,891 16,076 (185) (1.2) 17,255 108,584 116,472 Total property, plant and equipment 108,080 108,486 (406) (0.4) 109,334 2. Other mainly includes transfers to/from other asset categories including transfers to finance lease receivables. Current Year Actual vs Forecast Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 29 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S As at As at 30 June 30 April Annual 2012 2012 Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 13 (continued): Property, Plant and Equipment Additions - by functional classification 2,291 1,871 Transport and communications 1,497 1,608 (111) (6.9) 1,887 2,036 1,420 Economic and industrial services 1,160 1,275 (115) (9.0) 1,569 442 771 Education 354 325 29 8.9 805 627 455 Health 444 445 (1) (0.2) 645 339 269 Defence 142 161 (19) (11.8) 337 779 630 Other 644 678 (34) (5.0) 1,064 6,514 5,416 Total additions 4,241 4,492 (251) (5.6) 6,307 NOTE 14: NZ Superannuation Fund 539 420 Revenue 448 515 (67) (13.0) 647 160 223 Less current tax expense 969 813 (156) (19.2) 890 132 90 Less other expenses1 99 116 17 14.7 146 (204) 306 Add gains/(losses) 3,946 3,209 737 23.0 3,431 43 413 Operating balance 3,326 2,795 531 19.0 3,042 18,652 18,652 Opening net worth 18,703 18,703 - - 18,703 43 413 Operating balance 3,326 2,795 531 19.0 3,042 8 1 Other movements in reserves 4 4 - - 7 18,703 19,066 Closing net worth 22,033 21,502 531 2.5 21,752 comprising: 18,815 19,033 Financial assets 22,591 22,266 325 1.5 22,624 (1,317) (1,108) Financial liabilities (1,737) (1,895) 158 8.3 (1,966) 1,205 1,141 Net other assets 1,179 1,131 48 4.2 1,094 18,703 19,066 Closing net worth 22,033 21,502 531 2.5 21,752 Core Crown revenue (excl NZS Fund) 60,565 49,320 Core Crown revenue 52,667 52,243 424 0.8 63,809 539 420 Less NZS Fund revenue 448 515 (67) (13.0) 647 160 223 Add back NZS Fund intra-segment revenue 969 813 156 19.2 890 60,186 49,123 Core Crown revenue (excl NZS Fund) 53,188 52,541 647 1.2 64,052 OBEGAL excluding NZS Fund (9,240) (5,942) Total Crown OBEGAL (3,990) (4,653) 663 14.2 (6,285) 539 420 Less NZS Fund revenue 448 515 (67) (13.0) 647 77 55 Add back NZS Fund external expenses 72 84 (12) (14.3) 109 160 223 Add back NZS Fund tax 969 813 156 19.2 890 (9,542) (6,084) OBEGAL excluding NZS Fund (3,397) (4,271) 874 20.5 (5,933) 1. NZS Fund other expenses include deferred tax expense/(credits) Current Year Actual vs Forecast 30 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S As at As at Current Year Actual vs Forecast 30 June 30 April Annual 2012 2012 Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 15: Payables 8,255 9,017 Accounts payable 7,020 7,751 731 9.4 8,456 3,349 3,220 Taxes repayable 3,103 3,270 167 5.1 3,366 11,604 12,237 Total payables 10,123 11,021 898 8.1 11,822 NOTE 16: Insurance liabilities 30,648 30,261 ACC liability 32,877 31,324 (1,553) (5.0) 30,767 8,877 9,039 EQC property damage liability 7,465 7,448 (17) (0.2) 7,114 2,062 1,808 Southern Response (formerly AMI Insurance) 1,827 1,612 (215) (13.3) 1,439 48 58 Other insurance liabilities 45 46 1 2.2 53 (449) (336) Inter-segment eliminations (437) (425) 12 2.8 (456) 41,186 40,830 Total insurance liabilities 41,777 40,005 (1,772) (4.4) 38,917 NOTE 17: Provisions 375 600 Provision for ETS Credits1 1 1 - - 1 1,076 938 Provision for National Provident Fund guarantee 1,033 1,033 - - 1,033 3,253 2,887 Provision for employee entitlements 3,112 3,094 (18) (0.6) 3,286 Provision for Canterbury Red Zone support 745 473 package 448 402 (46) (11.4) 462 530 - Provision for Infrastructure costs 1,358 1,359 1 0.1 1,350 Provision for weathertight services 189 358 financial assistance package 67 71 4 5.6 71 1,338 1,043 Other provisions 1,147 1,076 (71) (6.6) 1,131 7,506 6,299 Total provisions 7,166 7,036 (130) (1.8) 7,334 1. Further information on the ETS, and the Kyoto net asset (included as an intangible asset in these financial statements) can be found on the Ministry for the Environment's climate change website www.climatechange.govt.nz NOTE 18: Changes in Net Worth 18,188 18,188 Opening taxpayers funds 3,520 3,520 - - 3,520 (14,897) (8,999) Operating balance excluding minority interest 2,810 2,953 (143) (4.8) 1,918 - - Partial share sales in state-owned enterprises - - - - 175 229 352 Transfers from/(to) other reserves 210 6 204 - (12) 3,520 9,541 Closing taxpayers funds 6,540 6,479 61 0.9 5,601 62,690 62,690 Opening revaluation reserve 56,001 56,001 - - 56,001 (6,461) (92) Net revaluations (38) (33) (5) (15.2) (29) (228) (352) Transfers from/(to) other reserves (207) (7) (200) - (7) 56,001 62,246 Closing revaluation reserve 55,756 55,961 (205) (0.4) 55,965 (299) (299) Opening other reserves (173) (173) - - (173) 126 146 Net movements 64 179 (115) (64.2) 83 (173) (153) Closing other reserves (109) 6 (115) - (90) Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 31 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S Year 10 months Current Year Actual vs Forecast to 30 Jun to 30 April Annual 2012 2012 Actual Forecast Variance Forecast $m $m $m $m $m % $m NOTE 19: Core Crown residual cash Core Crown Cash Flows from Operations 54,249 42,289 Tax receipts 45,152 44,894 258 0.6 57,699 670 562 Other sovereign receipts 537 551 (14) (2.5) 662 1,431 1,286 Interest, profits and dividends 1,362 1,411 (49) (3.5) 1,583 2,699 2,272 Sale of goods & services and other receipts 2,158 2,104 54 2.6 2,322 (22,854) (19,101) Transfer payments and subsidies (19,061) (19,095) 34 0.2 (22,937) (40,036) (33,769) Personnel and operating costs (34,353) (34,640) 287 0.8 (41,754) (3,369) (2,714) Finance costs (3,016) (3,065) 49 1.6 (3,789) - - Forecast for future new operating spending - - - - (42) - - Top-down expense adjustment - 83 (83) (100.0) 330 (7,210) (9,175) Net core Crown operating cash flows (7,221) (7,757) 536 6.9 (5,926) (1,262) (1,041) Net purchase of physical assets (954) (997) 43 4.3 (1,782) (1,022) (915) Net increase in advances (313) (321) 8 2.5 (358) (1,150) (993) Net purchase of investments (1,156) (1,168) 12 1.0 38 - - Forecast for future new capital spending - - - - (2) - - Top-down capital adjustment - 70 (70) (100.0) 280 (3,434) (2,949) Net Core Crown capital cash flows (2,423) (2,416) (7) (0.3) (1,824) (10,644) (12,124) Residual cash deficit (9,644) (10,173) 529 5.2 (7,750) The residual cash deficit is funded as follows: Debt programme cash flows Market: 15,146 12,183 Issue of government bonds 14,505 14,702 (197) (1.3) 15,554 (7,602) (7,602) Repayment of government bonds (9,982) (9,982) - - (9,982) 2,139 2,118 Net issue/(repayment) of short-term borrowing1 (4,284) (4,403) 119 2.7 (5,553) 9,683 6,699 Total market debt cash flows 239 317 (78) (24.6) 19 Non market: - - Issue of government bonds - - - - - (1,501) (1,501) Repayment of government bonds (499) (499) - - (499) 430 430 Net issue/(repayment) of short-term borrowing - - - - - (1,071) (1,071) Total non-market debt cash flows (499) (499) - - (499) 8,612 5,628 Total debt programme cash flows (260) (182) (78) (43.0) (480) Other borrowing cash flows Net (repayment)/issue of other New Zealand 5,880 7,695 dollar borrowing 4,214 3,732 482 12.9 4,118 Net (repayment)/issue of foreign currency (6,030) (7,162) borrowing (1,811) (1,994) 183 9.2 (2,354) (150) 533 Total other borrowing cash flows 2,403 1,738 665 22.1 1,764 Investing cashflows Other net sale/(purchase) of marketable 2,270 6,633 securities and deposits 9,440 13,630 (4,190) (30.7) 11,572 203 250 Issues of circulating currency 260 282 (22) (7.8) 264 (291) (920) Decrease/(increase) in cash (2,199) (5,295) 3,096 58.5 (5,370) 2,182 5,963 Total investing cash flows 7,501 8,617 (1,116) (13.0) 6,466 10,644 12,124 Residual cash deficit funding 9,644 10,173 (529) (5.2) 7,750 1. Short-term borrowing consists of Treasury Bills and Euro-Commercial Paper (ECP) 32 Financial Statements of the Government of New Zealand – ten months ended 30 April 2013 N O T E S T O T H E F I N A N C I A L S T A T E M E N T S NOTE 20: Post balance date event The Mighty River Power Share Offer was completed on 10 May 2013. Mighty River Power shares were priced at $2.50 per share and the Share Offer raised approximately $1.69 billion in gross proceeds for the Crown. New Zealand retail investors in the Mighty River Power share offer will receive one loyalty bonus share for every 25 shares they hold for two years from the offer, up to a maximum of 200 bonus shares. The maximum cost of the loyalty bonus scheme to the Government is estimated to be approximately $25 million. The Government will continue to hold a controlling interest in Mighty River Power; as a result Mighty River Power will continue to be fully consolidated in the financial statements of the Government. The key change to the financial statements will be the disclosure of the minority interest share of the operating balance and net worth in Mighty River Power.

ends

Government Financial Statements

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