6 November 2015
MEDIA STATEMENT

Embargoed until 10.00am, Friday 6 November 2015

Paul Helm, Chief Government Accountant

Financial Statements of the Government of New Zealand for the three months ended 30 September 2015

The Financial Statements of the Government of New Zealand for the three months ended 30 September 2015 were released by the Treasury today. The statements are compared against forecasts based on the 2015 Budget Economic and Fiscal Update (BEFU) published in May.

The operating balance before gains and losses (OBEGAL) was a deficit of $545 million for the three months to 30 September, which was $253 million lower than the expected deficit based on BEFU [While the current full year forecast is for an OBEGAL surplus, OBEGAL fluctuates month to month due to the seasonal nature of tax revenue and expense trends.]. This improved result included ACC’s OBEGAL which was $214 million higher than expected due to lower insurance expenses as a result of a decrease in the outstanding claims liability, increase in liable earnings for the current year and higher dividend income than expected.

A period of volatility in equity markets saw the NZS Fund record losses on financial instruments of $1.9 billion, which was $2.4 billion below forecast. When combined with the OBEGAL result, the operating balance deficit of $2.2 billion was $2.2 billion lower than forecast.

Core Crown tax revenue, at $16.2 billion, was 0.6% or $101 million higher than forecast, with some tax types performing above expectations e.g. source deductions and corporate tax, while others performed below, eg, GST.

Core Crown expenses, at $18.5 billion, were close to forecast.

The core Crown residual cash position, at a deficit of $2.1 billion, was $732 million lower than forecast. This stronger result was mainly due to higher tax receipts as well as lower operating and capital payments than forecast. Core Crown tax receipts were tracking $424 million above forecast of which a portion related to the tax revenue result above and the remainder was timing related. This lower-than-forecast cash deficit, together with the lower than forecast opening net debt position, has flowed through to net debt which was $1.9 billion lower than forecast at $62.8 billion (26.1% of GDP).

Higher than expected gross debt of $3.3 billion largely reflected the higher opening gross debt position, along with higher Treasury Bills and derivative liabilities.

At 30 September, total Crown assets were valued at $275.0 billion and liabilities were $185.1 billion while the Crown’s share of net worth stood at $84.1 billion.

Full statement: mediafsgnz3mthssep15.pdf

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