The interim Financial Statements of the Government of New Zealand for the eight months ended 28 February 2023 were released by the Treasury today.
The February results are reported against forecasts based on the Half Year Economic and Fiscal Update 2022 (HYEFU 2022), published on 14 December 2022 and the results for the same period for the previous year.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| February 2023 Actual1 $m |
February 2023 HYEFU 2022 Forecast1 $m |
Variance2 HYEFU 2022 $m |
Variance HYEFU 2022 % |
June 2023 HYEFU 2022 Forecast3 $m |
|
| Core Crown tax revenue | 73,255 | 74,288 | (1,033) | (1.4) | 118,061 |
| Core Crown revenue | 80,553 | 81,953 | (1,400) | (1.7) | 130,193 |
| Core Crown expenses | 81,663 | 82,473 | 810 | 1.0 | 129,331 |
| Core Crown residual cash | (20,334) | (20,033) | (301) | (1.5) | (25,364) |
| Net debt4 | 71,868 | 76,217 | 4,349 | 5.7 | 78,655 |
| as a percentage of GDP | 18.9% | 20.0% | 19.9% | ||
| Gross debt | 138,090 | 134,767 | (3,323) | (2.5) | 138,989 |
| as a percentage of GDP | 36.3% | 35.4% | 35.2% | ||
| Operating balance before gains and losses | (3,212) | (2,618) | (594) | (22.7) | (3,631) |
| Operating balance (excluding minority interests) | 3,955 | (1,460) | 5,415 | 370.9 | (725) |
| Total borrowings | 227,734 | 227,241 | (493) | (0.2) | 229,918 |
| Net worth attributable to the Crown | 172,134 | 165,790 | 6,344 | 3.8 | 166,246 |
| as a percentage of GDP | 45.3% | 43.6% | 42.1% | ||
Using the most recently published GDP (for the year ended 31 December 2022) of $380,326 million (Source: Stats NZ).
Core Crown tax revenue at $73.3 billion, was $1.0 billion below forecast. This is due to lower GST revenue ($0.5 billion), other individuals’ tax ($0.3 billion), source deductions ($0.2 billion) and customs and excise duties, primarily attributable to weaker than forecast consumption, labour market and business profits. These variances were partially offset by other direct taxes which were $0.2 billion higher than forecast.
Core Crown revenue was at $80.6 billion, $1.4 billion lower than forecast, largely due to core Crown tax revenue and the lower than forecast Emissions Trading Scheme (ETS) revenue ($0.7 billion) as the price of NZUs remains below forecast. These were partially offset by higher interest revenue of $0.3 billion.
Core Crown expenses at $81.7 billion, were $0.8 billion lower than forecast. This is largely attributable to lower than forecast expenses on health ($0.6 billion), primarily due to lower COVID-19 spending, and a range of other lower expenses including core government services ($0.4 billion), social security services ($0.3 billion), environmental protection ($0.3 billion), housing and community development ($0.3 billion) and economic and industrial services ($0.3 billion). These were partly offset by core Crown finance costs ($0.5 billion) which have increased as a result of higher than anticipated interest rates.
The operating balance before gains and losses (OBEGAL) deficit of $3.2 billion was $0.6 billion higher than the forecast of $2.6 billion, largely as a result of the core Crown variances.
The operating balance was $4.0 billion in surplus, $5.4 billion better than the forecasted deficit. The improvement in the operating balance was largely driven by gains on the valuation of financial and non-financial assets and liabilities.
The core Crown residual cash deficit of $20.3 billion was $0.3 billion higher than forecast, primarily driven by higher than forecast net operating cash outflows due to tax receipts being lower than forecast and differences in the timing of operating payments being made.
Net debt at $71.9 billion (18.9% of GDP), was lower than forecast by $4.3 billion. $4.0 billion is attributable to favourable movements in the fair value of financial assets and liabilities (which includes the NZS Fund) and $0.6 billion was due to lower than forecast borrowings by Crown entities. Partially offsetting these were the core Crown residual cash deficit, which is $0.3 billion more than forecast.
Gross debt at $138.1 billion (36.3% of GDP), was $3.3 billion higher than forecast due to several offsetting factors including Government bonds, foreign currency borrowing, higher RBNZ operating balances and unsettled trades being above forecast. This was partially offset by lower than forecast core Crown derivative liabilities and lower International Monetary Fund liabilities.
Net worth attributable to the Crown was $172.1 billion which was $6.3 billion higher than forecast. $5.4 billion of this variance relates to the favourable operating balance and $1.2 billion relates to the revaluation of electricity generation assets.
