Recommended Sponsor - Buy Original Artwork Directly from the Artist

Source: MIL-OSI Submissions
Source: New Zealand Treasury

Issue date: Tuesday, 5 April 2022 – The interim Financial Statements of the Government of New Zealand for the eight months ended 28 February 2022 (the financial statements) were released by the Treasury today.

The February results are reported against forecasts based on the Half Year Economic and Fiscal Update 2021 (HYEFU 2021), published on 15 December 2021.

The February 2022 Interim Financial Statements of the Government show the OBEGAL deficit of $8.3 billion, $4.4 billion lower than forecast. With ongoing deficits, borrowings continue to increase, however at a slower rate than expected, with net Core crown debt being $123.1 billion, $1.9 billion less than forecast and gross debt of $118.1 billion, $3.0 billion greater than forecast.

  Year to date Full Year




HYEFU 2021


HYEFU 2021 $m
Variance HYEFU 2021 % June

HYEFU 2021


Core Crown          
Core Crown tax revenue 68,039 66,220 1,819 2.7 102,561
Core Crown revenue 73,732 71,511 2,221 3.1 110,733
Core Crown expenses 81,432 82,824 1,392 1.7 128,028
Core Crown residual cash (21,025) (22,634) 1,609 7.1 (34,100)
Net core Crown debt4 123,113 124,970 1,857 1.5 136,305
as a percentage of GDP 35.2% 35.7%     37.6%
Gross debt5 118,076 115,029 (3,047) (2.6) 113,973
as a percentage of GDP 33.7% 32.9%     31.4%
Total Crown          
Operating balance before gains and losses (8,276) (12,716) 4,440 34.9 (20,844)
Operating balance (excluding minority interests) (18,152) (17,086) (1,066) (6.2) (23,826)
Total borrowings 192,106 187,095 (5,011) (2.7) 200,357
Net worth attributable to the Crown 133,742 134,227 (485) (0.4) 127,282
as a percentage of GDP 38.2% 38.3%     35.1%
  1. Using the most recently published GDP (for the year ended 31 December 2021) of $350,083 million (Source: Stats NZ).
  2. Favourable variances against forecast are positive and unfavourable variances against forecast are negative.
  3. Using HYEFU 2021 forecast GDP for the year ending 30 June 2022 of $362,788 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 eight months to 28 February 2022 was $1.8 billion (2.7%) above forecast, at $68.0 billion. The key drivers were higher than forecast variances in corporate tax ($1.2 billion), other individuals’ tax ($0.6 billion), source deductions ($0.5 billion), and offsetting these was GST revenue which was below forecast ($0.3 billion).

Core Crown expenses at $81.4 billion, were $1.4 billion (1.7%) below forecast, mainly attributable to lower than forecast COVID-19 support payments ($1.0 billion), lower economic and industrial service expenses ($0.7 billion), and lower core government service expenses ($0.5 billion). These variances were partly offset by the top-down adjustment of $1.4 billion.

The operating balance before gains and losses (OBEGAL) deficit of $8.3 billion was $4.4 billion better than the forecast, mainly reflecting the core Crown results discussed above. In addition, the results of Crown entities and State-owned enterprises were stronger than forecast by $0.5 billion and $0.4 billion respectively.

When total gains and losses are added to the OBEGAL result, the operating balance was an $18.2 billion deficit, which was $1.1 billion greater than the deficit forecast. The key drivers of the net gains and losses variance were:

Net losses on financial instruments were $3.9 billion higher than forecast largely due to returns on the Crown’s investment portfolios (New Zealand Superannuation Fund and ACC), as investment returns were lower than forecast.

Net losses on non-financial instruments were $1.4 billion higher than forecast primarily due to the losses on the Emissions Trading Scheme liability from increases in the carbon prince ($2.3 billion). These losses were partially offset by the ACC outstanding claims liability valuation loss being $0.7 billion less than forecast due to changes in the actuarial assumptions used to calculate the claims liability.

The core Crown residual cash deficit of $21.0 billion was lower than forecast by $1.6 billion. Net operating cash outflows were $0.6 billion lower than forecast, largely owing to lower operating payments. Core Crown capital payments were lower than expected by $1.0 billion, driven by lower than forecast uptake of the Reserve Bank’s Funding for Lending Programme.

Net core Crown debt was $123.1 billion (35.2% of GDP) at 28 February 2022, below forecast by $1.9 billion due to the core Crown residual cash variance described above and issuance of circulating currency being $0.4 billion more than forecast.

Gross debt at $118.1 billion (33.7% of GDP) was $3.0 billion higher than forecast. This is owing to issuances of $2.3 billion in euro-commercial paper which was not forecast and financial instrument valuations.

Net worth attributable to the Crown was $133.7 billion at 28 February 2022, $0.5 billion less than forecast. Most of this variance relates to the operating balance discussed above.