The interim Financial Statements of the Government of New Zealand for the nine months ended 31 March 2024 were released by the Treasury today.
The March 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. The results from April will be reported against the Budget Economic and Fiscal Update (BEFU 2024) which will be published by the Treasury on 30 May 2024.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| March 2024 Actual1 $m |
March 2024 HYEFU 2023 Forecast1 $m |
Variance2 HYEFU 2023 $m |
Variance HYEFU 2023 % |
June 2024 HYEFU 2023 Forecast3 $m |
|
| Core Crown tax revenue | 88,522 | 89,728 | (1,206) | (1.3) | 122,025 |
| Core Crown revenue | 98,149 | 99,778 | (1,629) | (1.6) | 135,740 |
| Core Crown expenses | 100,905 | 102,280 | 1,375 | 1.3 | 140,286 |
| Core Crown residual cash | (17,587) | (16,966) | (621) | (3.7) | (25,831) |
| Net core Crown debt4 | 173,684 | 174,330 | 646 | 0.4 | 182,755 |
| as a percentage of GDP | 42.9% | 43.0% | 43.5% | ||
| Gross debt | 170,309 | 167,722 | (2,588) | (1.5) | 166,640 |
| as a percentage of GDP | 42.0% | 41.4% | 39.7% | ||
| Operating balance before gains and losses | (5,039) | (4,420) | (619) | (14.0) | (9,319) |
| Operating balance (excluding minority interests) | 1,740 | (3,381) | 5,121 | 151.5 | (6,873) |
| Net worth attributable to the Crown | 185,537 | 180,647 | 4,890 | 2.7 | 177,160 |
| as a percentage of GDP | 45.8% | 44.6% | 42.2% | ||
Using the most recently published GDP (for the year ended 31 Dec 2023) of $405,145 million (Source: Stats NZ).
Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
Net core Crown debt excludes the NZS Fund and core Crown advances. Net core Crown debt may fluctuate during the year largely reflecting the timing of tax receipts.
Core Crown tax revenue, at $88.5 billion, was $1.2 billion (1.3%) below forecast. The variance was largely owing to corporate tax and net other individuals’ taxes being below forecast by $1.7 billion and $0.3 billion, respectively. This was due to reduced taxable profits on both filed and estimated tax assessments as a result of economic conditions. In contrast, revenue from other direct taxes was $1.0 billion (31.5%) above the forecast.
Core Crown revenue at $98.1 billion was $1.6 billion lower than forecast. This was largely due to core Crown tax revenue, as discussed above, and lower-than-expected revenue from the Emissions Trading Scheme due to a drop in the price of New Zealand Units from $70.00 to $58.35 compared to forecast.
Core Crown expenses at $100.9 billion was lower than forecast by $1.4 billion. The variance was distributed across several areas and is mostly timing in nature.
The operating balance before gains and losses (OBEGAL) deficit of $5.0 billion was $0.6 billion weaker than forecast. Although the Crown entity results were $0.4 billion better than anticipated, these were offset by weaker results from the core Crown and State-Owned Enterprises (SOEs), which were $0.3 billion and $0.8 billion weaker, respectively.
The operating balance surplus of $1.7 billion was $5.1 billion stronger than expected. This improvement was driven by favourable valuation movements in financial instruments of $9.0 billion, partially offset by unfavourable valuation movements on non-financial instruments of $3.1 billion.
The core Crown residual cash deficit of $17.6 billion was higher than the forecast deficit by $0.6 billion. This was largely a result of net operating cash outflows being $1.4 billion higher than forecast (unfavourable), mainly because of weaker tax receipts but this was partly offset by net capital cash outflows being $0.8 billion lower than forecast.
Net core Crown debt at $173.7 billion (42.9% of GDP) was lower than forecast by $0.6 billion. Although the residual cash deficit was weaker than expected, this was more than offset by valuation movements, the timing of net interest payments, and the additional issuance of circulating currency.
Gross debt at $170.3 billion (42.0% of GDP) was $2.6 billion higher than forecast, primarily due to additional borrowings aimed at addressing the Crown’s short-term liquidity requirements.
Net worth attributable to the Crown was $185.5 billion (45.8% of GDP) which was $4.9 billion higher than forecast. This was largely driven by the variance in the operating balance result.
