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NZ Fiscal Accounts - Eleven Months To May 2004

NZ Fiscal Accounts -Eleven Months To May 2004

Overview - Eleven Months To May 2004

Table 1 . Summary Fiscal Indicators
$ million May May
---> 2004 2004 Variance June 2004 June 2003
---> Actual YTD Forecast YTD $m Forecast Actual
Operating balance ---> 6,903 6,612 291 5,875 1,966
OBERAC ---> 6,803 6,612 191 5,986 5,580
Net worth ---> 30,707 30,375 332 29,732 23,781
Net cash flow from core operating and
investing activity ---> 489 364 125 135 1,217
Total Crown debt ---> 36,518 36,017 501 35,640 38,285
Gross sovereign-issued debt ---> 35,271 34,716 555 34,031 36,086
% of GDP ---> 25.7 25.3 0.4 24.7 27.7
Net core Crown debt ---> 15,452 15,501 (49) 15,901 17,577

The financial statements for the eleven months ended 31 May 2004 are compared against forecasts based on the 2004 Budget Economic and Fiscal Update (2004 BEFU).

The operating balance was $6,903 million, which was higher-than-forecast by $291 million. The key drivers of the forecast variance were:

- Tax revenue being higher-than-forecast by $88 million.

- Core Crown expenses which were lower- than-forecast by $127 million.

The OBERAC was $6,803 million. The difference between the OBERAC and the operating balance is largely due to the removal of foreign exchange gains on investment assets.

Similar to previous years the operating balance and OBERAC are expected to decrease during June reflecting seasonal patterns where tax revenues are lower in June compared to spending.

Core Crown cash flows from operations (cash equivalent of OBERAC) was $4,885 million. This has been applied to purchasing physical assets, advances and investing activities totalling $4,396 million. This leaves a cash surplus of $489 million, which is higher-than-forecast by $125 million due to lower expenditure and delays in purchases of physical assets.

Gross sovereign-issued debt (GSID) was $35.3 billion (25.7% of GDP), which was $555 million higher than forecast due largely to movements in foreign exchange rates (net debt neutral).

Net (core) Crown debt was $15.5 billion, which was $49 million lower than forecast reflecting the cash impact of the delays in operating and capital spending.

Net core Crown debt is expected to increase through June, reflecting the cash impact of the expected decrease in the operating balance/OBERAC.

While the 2004 BEFU forecasts are the most recent, we have included a comparison of May results to the previous 2003 December forecasts on page 7 for information.


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