The Interim Financial Statements of the Government of New Zealand for the eight months ended 28 February 2025 were released by the Treasury today. The February results are reported against forecasts based on theHalf Year Economic and Fiscal Update 2024 (HYEFU 2024), published on 17 December 2024, and the results for the same period for the previous year.
The majority of the key fiscal indicators for the eight months ended 28 February 2025 were better than forecast. The Government’s main operating indicator, the operating balance before gains and losses excluding ACC (OBEGALx), showed a deficit of $5.0 billion. This was $1.6 billion smaller than forecast largely due to higher than forecast core Crown tax revenue and lower than forecast core Crown expenditure. Net core Crown debt was $0.8 billion lower than forecast at $181.0 billion, or 42.4% of GDP.
Core Crown tax revenue, at $79.9 billion, was $0.9 billion (1.1%) higher than forecast with the largest variance relating to GST being $0.6 billion (3.1%) above forecast.
Core Crown expenses, at $92.2 billion, were $0.6 billion (0.6%) below forecast. This variance is mostly timing in nature and was spread across a range of agencies.
The OBEGALx was a deficit of $5.0 billion, $1.6 billion less than the forecast deficit. When including the revenue and expenses of ACC, the OBEGAL deficit was $6.6 billion, $1.4 billion less than the forecast deficit.
The operating balance deficit of $0.8 billion was $2.6 billion lower than the forecast deficit. This reflected both the favourable OBEGAL result and net favourable valuation movements. Net losses on non-financial instruments were $1.6 billion less than forecast (largely owing to a $0.4 billion net actuarial gain on ACC’s outstanding claims liability compared to a forecast net loss of $1.0 billion). This favourable result was partly offset by net gains on financial instruments being $0.7 billion lower than forecast, driven by New Zealand Superannuation Fund (NZS Fund)’s investment portfolio and the impact of movements in NZD since forecasts were prepared.
The core Crown residual cash deficit of $5.0 billion was in line with forecast. While the net core Crown operating cash outflows were higher than forecast by $0.3 billion, they were offset by net core Crown capital cash outflows by the same amount.
Net core Crown debt at $181.0 billion (42.4% of GDP) was $0.8 billion lower than forecast. With the core Crown residual cash deficit in line with forecast, factors not impacting residual cash have improved net core Crown debt. Of these, the most significant was foreign exchange movements since the HYEFU 2024 forecast which have resulted in $0.6 billion of net gains improving net core Crown debt without impacting the core Crown residual cash indicator.
Gross debt at $208.8 billion (48.9% of GDP) was $8.2 billion higher than forecast, largely owing to higher than forecast unsettled trades, derivatives in loss and the issuances of Euro Commercial Paper driven by short-term cash requirements. However, this increase in gross debt was broadly offset by a corresponding increase in financial assets, therefore this has not flowed through to the net core Crown debt measure or to net worth.
Net worth at $187.6 billion (43.9% of GDP) was $3.1 billion higher than forecast largely reflecting the year-to-date operating balance result.
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| February 2025 Actual1 $m |
February 2025 HYEFU 2024 Forecast1 $m |
Variance2 HYEFU 2024 $m |
Variance HYEFU 2024 % |
June 2025 HYEFU 2024 Forecast3 $m |
|
| Core Crown tax revenue | 79,928 | 79,025 | 903 | 1.1 | 120,623 |
| Core Crown revenue | 88,467 | 87,608 | 859 | 1.0 | 134,038 |
| Core Crown expenses | 92,226 | 92,826 | 600 | 0.6 | 144,638 |
| Core Crown residual cash | (5,021) | (5,022) | 1 | – | (16,610) |
| Net core Crown debt4 | 180,982 | 181,799 | 817 | 0.4 | 192,810 |
| as a percentage of GDP | 42.4% | 42.6% | 45.1% | ||
| Gross debt | 208,776 | 200,574 | (8,202) | (4.1) | 206,558 |
| as a percentage of GDP | 48.9% | 47.0% | 48.3% | ||
| OBEGAL excluding ACC (OBEGALx) | (5,023) | (6,619) | 1,596 | 24.1 | (12,868) |
| OBEGAL | (6,580) | (8,013) | 1,433 | 17.9 | (17,317) |
| Operating balance (excluding minority interests) | (827) | (3,439) | 2,612 | 76.0 | (10,161) |
| Net worth | 187,563 | 184,445 | 3,118 | 1.7 | 177,492 |
| as a percentage of GDP | 43.9% | 43.2% | 41.5% | ||
Using the most recently published GDP (for the year ended 31 December 2024) of $426,925 million (Source: Stats NZ).
Favourable variances against forecast have a positive sign and unfavourable variances against forecast have a negative sign.
Using HYEFU 2024 forecast GDP for the year ending 30 June 2025 of $427,252 million (Source: The Treasury).
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.
