The interim Financial Statements of the Government of New Zealand for the six months ended 31 December 2023 were released by the Treasury today.
The December results are reported against forecasts based on the Half Year Economic and Fiscal Update 2023 (HYEFU 2023), published on 20 December 2023 and the results for the same period for the previous year.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| December 2023 Actual1 $m |
December 2023 HYEFU 2023 Forecast1 $m |
Variance2 HYEFU 2023 $m |
Variance HYEFU 2023 % |
June 2024 HYEFU 2023 Forecast3 $m |
|
| Core Crown tax revenue | 59,229 | 58,854 | 375 | 0.6 | 122,025 |
| Core Crown revenue | 65,958 | 65,494 | 464 | 0.7 | 135,740 |
| Core Crown expenses | 67,971 | 68,417 | 446 | 0.7 | 140,286 |
| Core Crown residual cash | (19,759) | (18,844) | (915) | (4.9) | (25,831) |
| Net debt4 | 87,069 | 91,540 | 4,471 | 4.9 | 97,414 |
| as a percentage of GDP | 21.7% | 22.8% | 23.2% | ||
| Gross debt | 156,795 | 154,422 | (2,373) | (1.5) | 166,640 |
| as a percentage of GDP | 39.1% | 38.5% | 39.7% | ||
| Operating balance before gains and losses | (2,737) | (3,976) | 1,239 | 31.2 | (9,319) |
| Operating balance (excluding minority interests) | (3,894) | (4,515) | 621 | 13.8 | (6,873) |
| Net worth attributable to the Crown | 180,080 | 179,530 | 550 | 0.3 | 177,160 |
| as a percentage of GDP | 44.9% | 44.8% | 42.2% | ||
- Using the most recently published GDP (for the year ended 30 September 2023) of $400,818 million (Source: Stats NZ).
- Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
- Using HYEFU 2023 forecast GDP for the year ending 30 June 2024 of $419,982 million (Source: The Treasury).
- The net debt indicator includes core Crown advances, Crown entity borrowings (excluding Kiwi Group Capital) and the financial assets and borrowings of the New Zealand Super Fund (NZS Fund).
Core Crown tax revenue at $59.2 billion, was $0.4 billion (0.6%) above forecast, with the variance spread across a number of tax types. Net other individuals tax revenue was $0.2 billion above forecast, primarily due to higher provisional tax revenue than expected. GST revenue exceeded forecasts by $0.3 billion, likely indicating stronger consumption in the December quarter than anticipated.
Core Crown revenue at $66.0 billion was $0.5 billion (0.7%) above forecast. In addition to the stronger core Crown tax revenue, interest revenue was higher than forecast by $0.2 billion. This largely reflects higher-than-expected yields on the Reserve Bank of New Zealand’s (RBNZ) foreign currency bond investments.
Core Crown expenses at $68.0 billion were $0.4 billion (0.7%) below the forecast. The lower‑than-expected spending was distributed across several areas, including core government services, health, and social security and welfare. This was partially offset by higher transport spending and finance costs. Most of this variance is timing in nature and is expected to unwind in the future months.
The operating balance before gains and losses (OBEGAL) was a deficit of $2.7 billion, which was $1.2 billion smaller than the forecasted deficit. This variance is primarily attributed to the core Crown results discussed earlier.
The operating balance was a deficit of $3.9 billion, which was $0.6 billion smaller than anticipated. Although the OBEGAL deficit came in $1.2 billion smaller than forecast, this was partially offset by unfavourable valuation movements.
The unfavourable valuation movements primarily resulted from net losses on non-financial instruments related to the valuation of ACC outstanding claims, totalling $5.9 billion weaker than the forecasted gain. This was partially mitigated by net gains on financial instruments, which were $5.4 billion stronger than the expected loss, mainly driven by the New Zealand Superannuation Fund (NZS Fund) portfolio reflecting financial market conditions.
The core Crown residual cash deficit of $19.8 billion was higher than the forecast deficit by $0.9 billion. This deficit was primarily driven by net operating cash outflows and net capital cash outflows, which were higher than forecast by $0.3 billion and $0.6 billion, respectively.
Net debt at $87.1 billion (21.7% of GDP), was $4.5 billion (4.9%) lower than forecast. This variance was predominantly influenced by net gains on financial assets, totalling $4.8 billion, primarily attributed to market conditions affecting the NZS Fund portfolio. The weaker core Crown residual cash (excluding contributions to the NZS Fund and core Crown advances, $0.3 billion) partially offset the stronger investment returns.
Gross debt at $156.8 billion (39.1% of GDP), was $2.4 billion (1.5%) higher than forecast. This increase was primarily a result of additional borrowing which included Euro Commercial Paper ($4.8 billion), aimed at addressing short-term liquidity requirements. Partially offsetting this was the RBNZ derivative values being more favourable than forecast and lower issuance of Treasury Bills.
Net worth attributable to the Crown was $180.1 billion, $0.6 billion (0.3%) higher than forecast. This was largely driven by the variance in the operating balance result discussed above.
