The Interim Financial Statements of the Government of New Zealand for the nine months ended 31 March 2025 were released by the Treasury today. The March results are reported against forecasts based on the Half 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 nine months ended 31 March 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 $6.6 billion. This was $0.5 billion smaller than forecast largely due to lower than forecast core Crown expenditure. Net core Crown debt was $2.1 billion lower than forecast at $182.0 billion, or 42.6% of GDP.
Core Crown tax revenue, at $89.5 billion, was $0.2 billion (0.2%) higher than forecast. While GST and other individuals’ tax were both above forecast by $0.5 billion each, this was broadly offset by source deductions and corporate tax which were below forecast by $0.5 billion and $0.3 billion, respectively.
Core Crown expenses, at $104.1 billion, were $0.6 billion (0.5%) below forecast. This variance included some significant offsetting variances and was mostly timing in nature. In particular, core government services expenses were $0.6 billion above forecast, while transport and housing expenses were $0.6 billion and $0.3 billion below forecast, respectively. The remaining variance was spread across a range of agencies.
The OBEGALx was a deficit of $6.6 billion, $0.5 billion less than the forecast deficit. When including the revenue and expenses of ACC, the OBEGAL deficit was $8.4 billion, $0.4 billion less than the forecast deficit.
The operating balance deficit of $4.5 billion was $0.8 billion higher than the forecast deficit. This reflected net unfavourable valuation movements along with the favourable OBEGAL result. Net gains on financial instruments were $4.0 billion lower than forecast, driven by the performance of the New Zealand Superannuation Fund (NZS Fund) and ACC’s investment portfolios. This unfavourable variance was partly offset by net losses on non-financial instruments being $2.6 billion less than forecast. This was largely owing to a $0.7 billion net actuarial gain on ACC’s outstanding claims liability compared to a forecast net loss of $1.0 billion, and the New Zealand Emissions Trading Scheme with net losses being $0.9 billion lower than forecast.
The core Crown residual cash deficit of $5.3 billion was $1.7 billion lower than forecast. While net operating cash flows were broadly in line with forecast, net core Crown capital cash outflows were $1.5 billion lower than forecast. This variance is expected to be timing in nature, mainly owing to net purchases of investments and net increases in advances which were both below forecast by $0.6 billion and $0.7 billion, respectively.
Net core Crown debt at $182.0 billion (42.6% of GDP) was $2.1 billion lower than forecast. This variance was largely due to the variance in core Crown residual cash deficit and the factors not impacting residual cash which improved net core Crown debt. Of these factors, the most significant was foreign exchange movements since the HYEFU 2024 forecast which have resulted in $0.5 billion of net gains improving net core Crown debt without impacting the core Crown residual cash indicator.
Gross debt at $206.0 billion (48.3% of GDP) was $0.5 billion higher than forecast, largely owing to higher than forecast government stock, partially offset by lower than forecast Treasury bills.
Net worth at $183.8 billion (43.1% of GDP) was $0.3 billion lower than forecast. The variance to forecast reflects a higher operating balance deficit discussed above, partially offset by net actuarial gains on retirement plan schemes ($0.5 billion). Net worth consisted of total Crown assets of $594.7 billion (in line with forecast) and total Crown liabilities of $410.9 billion ($0.3 billion higher than forecast).
| Year to date | Full Year | ||||
|---|---|---|---|---|---|
| March 2025 Actual1 $m |
March 2025 HYEFU 2024 Forecast1 $m |
Variance2 HYEFU 2024 $m |
Variance HYEFU 2024 % |
June 2025 HYEFU 2024 Forecast3 $m |
|
| Core Crown tax revenue | 89,478 | 89,278 | 200 | 0.2 | 120,623 |
| Core Crown revenue | 99,124 | 99,152 | (28) | – | 134,038 |
| Core Crown expenses | 104,088 | 104,662 | 574 | 0.5 | 144,638 |
| Core Crown residual cash | (5,297) | (7,018) | 1,721 | 24.5 | (16,610) |
| Net core Crown debt4 | 181,984 | 184,121 | 2,137 | 1.2 | 192,810 |
| as a percentage of GDP | 42.6% | 43.1% | 45.1% | ||
| Gross debt | 205,997 | 205,456 | (541) | (0.3) | 206,558 |
| as a percentage of GDP | 48.3% | 48.1% | 48.3% | ||
| OBEGAL excluding ACC (OBEGALx) | (6,589) | (7,118) | 529 | 7.4 | (12,868) |
| OBEGAL | (8,370) | (8,774) | 404 | 4.6 | (17,317) |
| Operating balance (excluding minority interests) | (4,484) | (3,656) | (828) | (22.6) | (10,161) |
| Net worth | 183,815 | 184,118 | (303) | (0.2) | 177,492 |
| as a percentage of GDP | 43.1% | 43.1% | 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.
