Jayne Winfield, Chief Government Accountant
The interim Financial Statements of the Government of New Zealand for the nine months ended 31 March 2024 were released by the Treasury today.
The March results are reported against forecasts based on the Half Year Economic and Fiscal Update 2023 (HYEFU 2023),
published on 20 December 2023 and the results for the same period for the previous year. The results from April will be
reported against the Budget Economic and Fiscal Update (BEFU 2024) which will be published by the Treasury on 30 May
2024.
Core Crown tax revenue, at $88.5 billion, was $1.2 billion (1.3%) below forecast. The variance was largely owing to corporate tax and net
other individuals’ taxes being below forecast by $1.7 billion and $0.3 billion, respectively. This was due to reduced
taxable profits on both filed and estimated tax assessments as a result of economic conditions. In contrast, revenue
from other direct taxes was $1.0 billion (31.5%) above the forecast.
Core Crown revenue at $98.1 billion was $1.6 billion lower than forecast. This was largely due to core Crown tax revenue, as discussed
above, and lower-than-expected revenue from the Emissions Trading Scheme due to a drop in the price of New Zealand Units
from $70.00 to $58.35 compared to forecast.
Core Crown expenses at $100.9 billion was lower than forecast by $1.4 billion. The variance was distributed across several areas and is
mostly timing in nature.
The operating balance before gains and losses (OBEGAL) deficit of $5.0 billion was $0.6 billion weaker than forecast. Although the Crown entity results were $0.4 billion
better than anticipated, these were offset by weaker results from the core Crown and State-Owned Enterprises (SOEs),
which were $0.3 billion and $0.8 billion weaker, respectively.
The operating balance surplus of $1.7 billion was $5.1 billion stronger than expected. This improvement was driven by favourable valuation movements
in financial instruments of $9.0 billion, partially offset by unfavourable valuation movements on non-financial
instruments of $3.1 billion.
The core Crown residual cash deficit of $17.6 billion was higher than the forecast deficit by $0.6 billion. This was largely a result of net operating cash
outflows being $1.4 billion higher than forecast (unfavourable), mainly because of weaker tax receipts but this was
partly offset by net capital cash outflows being $0.8 billion lower than forecast.
Net core Crown debt at $173.7 billion (42.9% of GDP) was lower than forecast by $0.6 billion. Although the residual cash deficit was weaker
than expected, this was more than offset by valuation movements, the timing of net interest payments, and the additional
issuance of circulating currency.
Gross debt at $170.3 billion (42.0% of GDP) was $2.6 billion higher than forecast, primarily due to additional borrowings aimed at
addressing the Crown's short-term liquidity requirements.
Net worth attributable to the Crown was $185.5 billion (45.8% of GDP) which was $4.9 billion higher than forecast. This was largely driven by the variance
in the operating balance result.