Source: MIL-OSI Submissions
Source: New Zealand Treasury – Paul Helm, Chief Government Accountant
The Interim Financial Statements of the Government of New Zealand for the eight months ended 29 February 2020 (the financial statements) were released by the Treasury today.
The financial statements are compared against forecasts based on the 2019 Half Year Economic and Fiscal Update (HYEFU 2019) published on 11 December 2019.
These results have reflected some of the COVID-19 related impacts, mainly in relation to the significant losses impacting the operating balance, total borrowings and assets and liabilities values.
The core Crown tax revenue and operating expenses have not been significantly impacted for these financial statements.
Core Crown tax revenue was $57.9 billion, $0.2 billion (0.3%) below forecast. This is mainly owing to lower than forecast company tax offset by higher than forecast results across the remaining tax types.
The companies tax results are mainly due to the change in revenue recognition and these results can also fluctuate in the coming months. February core Crown tax revenue and receipts do not appear to be affected by COVID-19.
Core Crown expenses were $60.3 billion, which is in line with forecast (0.1% below forecast).
The operating balance before gains and losses (OBEGAL) was a $1.4 billion surplus and close to forecast ($0.1 billion above forecast).
When total gains and losses are added to the OBEGAL result, the operating balance was a $3.0 billion deficit, $4.7 billion weaker than forecast.
ACC’s outstanding claims liability valuation losses were $2.8 billion higher than forecast primarily due to a decrease in the discount rates. In addition unfavourable changes in market prices resulted in net investment gains being lower than forecast by $2.0 billion.
Core Crown residual cash was a deficit of $2.5 billion, $0.2 billion less than the deficit
forecast. This was mainly due to tax receipts being $0.2 billion higher than forecast.
Net core Crown debt of $59.8 billion (19.2% of GDP) was $0.6 billion lower than forecast largely due to the residual cash variance discussed above. In addition, the timing of housing and infrastructure funding has also contributed $0.2 billion to the net core Crown debt variance.
Gross debt at $92.1 billion (29.6% of GDP) was $1.1 billion higher than forecast primarily due to derivatives in loss increasing from forecast by around $0.8 billion. These mostly reflects changes in the market since the monthly forecasts were completed.
Total borrowings at 29 February 2020 were $124.7 billion, $3.0 billion higher than forecast, primarily due to derivatives in loss increasing from forecast by $2.6 billion due to market conditions changes since the forecast was prepared.
Net worth attributable to the Crown was $136.4 billion, $4.5 billion lower than forecast.
The majority of this variance relates to the operating balance for the first eight months of the year as discussed above.
Key indicators for the eight months ended 29 February 2020 compared to HYEFU 2019.