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Source: MIL-OSI Submissions

Source: New Zealand Treasury

The interim Financial Statements of the Government of New Zealand for the 11 months ended 31 May 2021 (the financial statements) were released by the Treasury today.

Core Crown tax revenue is $4.1 billion greater than forecast, a result which reflects that current economic conditions exceed those forecast in the 2021 Budget Economic and Fiscal Update (BEFU 2021). 

Core Crown tax revenue is the key driver of the $1.4 billion reduction in the OBEGAL deficit from April 2021, however while results at June are likely to continue to exceed the BEFU 2021 forecast, there is no certainty or expectation that reductions in OBEGAL deficits will persist.
  Year to date Full Year




BEFU 2021


BEFU 2021 $m
Variance BEFU 2021 % June

BEFU 2021


Core Crown          
Core Crown tax revenue 89,011 84,920 4,091 4.8 91,543
Core Crown revenue 94,961 90,800 4,161 4.6 97,942
Core Crown expenses 97,438 98,319 881 0.9 110,745
Core Crown residual cash (13,104) (19,423) 6,319 32.5 (25,277)
Net core Crown debt4 101,517 107,556 6,039 5.6 113,655
as a percentage of GDP 31.2% 33.1%     34.0%
Gross debt5 100,626 93,743 (6,883) (7.3) 97,028
as a percentage of GDP 31.0% 28.8%     29.0%
Total Crown          
Operating balance before gains and losses (3,644) (9,446) 5,802 61.4 (15,127)
Operating balance (excluding minority interests) 14,656 6,119 8,537 139.5 1,274
Total borrowings 160,798 163,625 2,827 1.7 173,227
Net worth attributable to the Crown 125,384 116,778 8,606 7.4 111,990
as a percentage of GDP 38.6% 35.9%     33.5%
  1. Using the most recently published GDP (for the year ended 31 March 2021) of $325,035 million (Source: Statistics NZ).
  2. Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
  3. Using BEFU 2021 forecast GDP for the year ending 30 June 2021 of $334,399 million (Source: The Treasury).
  4. Net core Crown debt excluding student loans and other advances. Net debt may fluctuate during the year largely reflecting the timing of tax receipts.
  5. Gross sovereign-issued debt excluding settlement cash and Reserve Bank bills.

Core Crown tax revenue for the 11 months to May 2021 was $4.1 billion (4.8%) above the BEFU 2021 forecast, with positive variances across tax groups, specifically, corporate tax ($1.8 billion), source deductions revenue ($0.7 billion), GST revenue ($0.6 billion), other individuals’ tax ($0.5 billion) and other direct taxes ($0.4 billion).

These positive variances reflect economic conditions being better than forecast. Corporate tax was above forecast primarily owing to 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 $3.6 billion, was $5.8 billion lower than the forecast deficit of $9.4 billion. The majority of this variance is driven by the $4.1 billion favourable core Crown tax revenue variance, being the core Crown tax revenue variance mentioned above, as well as core Crown expenses which were lower than forecast by $0.9 billion. The remaining difference is a result of favourable variances from both Crown entity and SOE performance. When total gains and losses are added to the OBEGAL result, the operating balance was a $14.7 billion surplus, $8.5 billion better than the forecast $6.1 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 $1.0 billion lower than forecast, being a valuation gain of $8.4 billion. This variance was mostly a result of changes to the discount rates and CPI assumptions used to revalue this liability at 31 May 2021, since the BEFU 2021 forecast.

The core Crown residual cash deficit of $13.1 billion was $6.3 billion smaller than the deficit forecast. This was owing to tax receipts being $4.6 billion higher than expected, while operating payments and capital payment outflows were $0.6 billion and $1.0 billion lower than forecast respectively.

Net core Crown debt was $101.5 billion (31.2% of GDP) at 31 May 2021, $6.9 billion lower than forecast primarily owing to the favourable core Crown residual cash variance discussed above.

Net worth attributable to the Crown at $125.4 billion was $8.6 billion higher than forecast. This variance was owing to the favourable operating balance variance of $8.5 billion.