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Source: MIL-OSI Submissions

Source: New Zealand Treasury
Document Date: Thursday, 3 Jun 2021 Fiscal year: 2020/21

The interim Financial Statements of the Government of New Zealand for the ten months ended 30 April 2021 (the financial statements) were released by the Treasury today.

The core Crown tax revenue result reflects the strength of current economic conditions which exceed the 2021 Budget Economic and Fiscal Update (BEFU 2021) forecast. The economic cost of the COVID-19 pandemic is still visible, with an operating balance before gains and losses (OBEGAL) deficit of $5.0 billion and continued higher levels of net core Crown debt of $107.5 billion (33.9% of GDP).

This is the first month that monthly actual results are compared against the BEFU 2021 forecasts, the March 2021 actual results were compared against 2020 Half Year Economic and Fiscal Update (HYEFU 2020).

  Year to date Full Year




BEFU 2021


BEFU 2021 $m
Variance BEFU 2021 % June

BEFU 2021


Core Crown          
Core Crown tax revenue 79,124 77,158 1,966 2.5 91,543
Core Crown revenue 84,606 82,525 2,081 2.5 97,942
Core Crown expenses 88,283 88,979 696 0.8 110,745
Core Crown residual cash (19,207) (21,937) 2,730 12.4 (25,277)
Net core Crown debt4 107,505 110,077 2,572 2.3 113,655
as a percentage of GDP 33.9% 34.8%     34.0%
Gross debt5 107,322 103,628 (3,694) (3.6) 97,028
as a percentage of GDP 33.9% 32.7%     29.0%
Total Crown          
Operating balance before gains and losses (5,048) (8,614) 3,566 41.4 (15,127)
Operating balance (excluding minority interests) 12,133 6,665 5,468 82.0 1,274
Total borrowings 167,740 165,445 (2,295) (1.4) 173,227
Net worth attributable to the Crown 122,887 117,457 5,430 4.6 111,990
as a percentage of GDP 38.8% 37.1%     33.5%
Using the most recently published GDP (for the year ended 31 December 2020) of $316,687 million (Source: Statistics NZ).
Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
Using BEFU 2021 forecast GDP for the year ending 30 June 2021 of $334,399 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 for the ten months to April 2021 was $2.0 billion (2.5%) above the BEFU 2021 forecast, largely owing to positive variances in corporate tax ($0.5 billion), GST revenue ($0.5 billion), other direct taxes ($0.4 billion), source deductions revenue ($0.3 billion) and other individuals’ tax ($0.2 billion).

These positive variances reflect economic conditions being better than forecast. Corporate tax was above forecast primarily owing to higher investment income and consequently higher PIE tax. Other direct taxes were above forecast as a result of stronger resident withholding tax on dividends. In addition, labour market conditions were better than forecast which has driven the positive variance in source deductions and consumption was also stronger, leading to GST revenue being higher compared to forecast.

The OBEGAL deficit of $5.0 billion, was $3.6 billion lower than the forecast deficit of $8.6 billion. The majority of this variance is driven by the $2.7 billion favourable core Crown variance, being the core Crown tax revenue variance mentioned above, as well as core Crown expenses which were lower than forecast by $0.7 billion. The remaining difference is caused by favourable variances from both Crown entity and SOE results. When total gains and losses are added to the OBEGAL result, the operating balance was a $12.1 billion surplus, $5.4 billion better than the forecast $6.7 billion surplus. The favourable gains and losses largely related to:

Higher investment returns than forecast for both NZSF and ACC were the key drivers of a positive variance in net gains on financial instruments of $3.3 billion.
Offsetting this, ACC’s outstanding claims liability valuation gain was $1.7 billion lower than forecast, being a valuation gain of $7.7 billion. This variance was mostly a result of changes to the discount rates and CPI assumptions used to revalue this liability at 30 April 2021, since the BEFU 2021 forecast.

The core Crown residual cash deficit of $19.2 billion was $2.7 billion smaller than the deficit forecast. This was owing to tax receipts being $2.3 billion higher than expected, while operating costs and capital payment outflows were each $0.2 billion lower than forecast.

Net core Crown debt was $107.5 billion (33.9% of GDP) at 30 April 2021, $2.6 billion lower than forecast primarily owing to the favourable core Crown residual cash variance discussed above.

Net worth attributable to the Crown at $122.9 billion was $5.4 billion higher than forecast. This variance was owing to the favourable operating balance variance of $5.4 billion.