Jayne Winfield, Chief Government Accountant

The interim Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2024 were released by the Treasury today.

The May results are reported against forecasts based on the Budget Economic and Fiscal Update 2024 (BEFU 2024), published on 30 May 2024, and the results for the same period for the previous year.

Core Crown tax revenue, at $111.1 billion, was $1.6 billion (1.4%) above forecast. This largely reflects higher than expected tax revenue from Portfolio Investment Entities (PIE) on the back of strong investment performance and resident withholding tax (RWT) on dividends due to an uplift in dividend payments. Both of these variances are expected to persist until year end but, however, are unlikely to impact future years.

Core Crown revenue was $1.1 billion higher than forecast. This was largely due to core Crown tax revenue, as discussed above, but was slightly offset by lower-than-expected revenue from the Emissions Trading Scheme due to lower units being surrendered and a drop in the price of New Zealand Units from $58.35 in the forecast to $50.00.

Core Crown expenses at $125.1 billion was lower than forecast by $0.4 billion. Without the Treasury’s top-down adjustment and finance costs core Crown expenses would be $1.8 billion lower than forecast, with the variance spread across a number of areas.

The operating balance before gains and losses (OBEGAL) deficit of $7.7 billion was $1.0 billion smaller than forecast. In addition to the variances noted above, state-owned enterprises and Crown entities have recorded weaker results.

The operating balance surplus of $0.8 billion was $2.4 billion stronger than expected. The majority of this variance was due to the OBEGAL variance discussed above and favourable valuation movements.

The core Crown residual cash deficit of $17.8 billion was lower than the forecast deficit by $0.4 billion. This was largely a result of net operating cash outflows being $0.4 billion lower than forecast (favourable), mainly because of stronger tax receipts for broadly similar reasons to the variance in core Crown tax revenue.

Net core Crown debt at $173.6 billion (42.5% of GDP) was below forecast by $0.7 billion. This favourable variance was largely driven by the residual cash deficit.

Gross debt at $168.7 billion (41.3% of GDP) was broadly in line with forecast.

Net worth attributable to the Crown was $184.8 billion (45.2% of GDP) which was $2.4 billion higher than forecast. This was largely driven by the variance in the operating balance result described above.

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