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Source: MIL-OSI Submissions

Source: New Zealand Treasury
The interim Financial Statements of the Government of New Zealand for the five months ended 30 November 2020 (the financial statements) were released by the Treasury today.

Issue date:
Friday, 29 January 2021
Corporate author:
The Treasury
Document Date:
Friday, 29 Jan 2021
Fiscal year:

The November 2020 Interim Financial Statements of the Government show the position and performance of the Crown being stronger than forecast in the Half Year Economic and Fiscal Update (HYEFU).

However, the results continue to show the impacts of the COVID-19 pandemic with an operating balance before gains and losses (OBEGAL) deficit of $4.3 billion and continued higher levels of net core Crown debt of $99.0 billion (30.9% of GDP).

  Year to date Full Year




HYEFU 2020


HYEFU 2020 $m
Variance HYEFU 2020 % June

HYEFU 2020


Core Crown          
Core Crown tax revenue 37,581 36,882 699 1.9 88,346
Core Crown revenue 40,347 39,672 675 1.7 94,993
Core Crown expenses 44,400 44,946 546 1.2 114,232
Core Crown residual cash (11,875) (13,324) 1,449 10.9 (40,177)
Net core Crown debt4 98,964 99,824 860 0.9 128,649
as a percentage of GDP 30.9% 31.1%     39.7%
Gross debt5 106,684 103,496 (3,188) (3.1) 91,669
as a percentage of GDP 33.3% 32.3%     28.3%
Total Crown          
Operating balance before gains and losses (4,336) (6,219) 1,883 30.3 (21,576)
Operating balance (excluding minority interests) 157 (9,833) 9,990 101.6 (25,639)
Total borrowings 159,511 156,798 (2,713) (1.7) 186,622
Net worth attributable to the Crown 109,773 99,984 9,789 9.8 83,881
as a percentage of GDP 34.2% 31.2%     25.9%

Using the most recently published GDP (for the year ended 30 September 2020) of $320,746 million (Source: Stats NZ).
Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
Using HYEFU 2020 forecast GDP for the year ending 30 June 2021 of $323,897 million (Source: The Treasury).
Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.

Core Crown tax revenue was $37.6 billion, $0.7 billion above the HYEFU forecast. This was largely due to both GST revenue ($0.4 billion or 3.5%) and corporate tax revenue ($0.3 billion or 6.9%) being above forecast, indicating continued strength in the underlying economic drivers of tax revenue. This indicates that the 2020 income tax year was not as adversely affected by the COVID-19 pandemic as was expected.

Core Crown expenses at $44.4 billion were $0.5 billion below the forecast. The variance was split across multiple entities, with underspends mainly due to delays experienced in work programmes that have been impacted by the COVID-19 pandemic.

OBEGAL was a deficit of $4.3 billion, $1.9 billion better than the deficit forecast, mainly owing to the core Crown results discussed above.

When total gains and losses are added to the OBEGAL result, the operating balance was a surplus of $0.2 billion and was greater than forecast by $10.0 billion (a deficit of $9.8 billion was forecast). The volatility in this variance reflects movements in external factors (eg, market conditions, discount rates and CPI inflation assumptions).

The key drivers of the net gains and losses were:

Net gains on financial instruments – $3.2 billion higher than forecast primarily as a result of returns on the Crown’s investment portfolios (New Zealand Superannuation Fund and ACC), as current market returns are higher than those forecast (which used the lower long run rate of return assumptions).
Net losses on non-financial instruments – $5.0 billion better than forecast primarily as a result of the ACC insurance liability valuation being $5.1 billion better than forecast. This largely reflects changes in discount rates and CPI assumptions, which are used to value future claims cash flows into present value dollars. The impact of the inflation and discount rate movements are significant due to the long-term nature of this liability, stretching out over 50 years.

Core Crown residual cash was a deficit of $11.9 billion, $1.4 billion lower than the deficit forecast mainly due to the cashflow impacts of the core Crown operating results as discussed above.

Net core Crown debt was $99.0 billion (30.9% of GDP) at the end of November 2020, $0.9 billion less than forecast mainly owing to the core Crown residual cash variance of $1.4 billion partially offset by changes in the valuations of financial assets and liabilities.

Net worth attributable to the Crown at $109.8 billion, was $9.8 billion (9.8%) higher than forecast, which reflects the favourable operating balance discussed earlier.