Hon Dr Michael Cullen
Minister of Finance

22 September 2005 Media Statement

Year end results in line with Prefu

“The final outturn for the 2004-05 financial year is broadly in line with the forecasts in the Pre-Election Economic and Fiscal Update,” Finance Minister Michael Cullen said today.

“The cash position is down $52 million on Prefu forecasts and the OBERAC [Operating Balance Excluding Revaluations and Accounting Changes] up $556 million.

“The improvement in the OBERAC reflects the final audited results of the State Owned Enterprises and Crown entities, several of which came in above expectations.

“Those funds will be left with the organisation for re-investment rather than skimmed off by the government,” Dr Cullen said.

Net worth is up by $8.1 billion, reflecting revaluations of physical assets – principally electricity generation infrastructure [up $1.4 billion], state highways [up $1.4 billion], conservation assets [up $1.1 billion], housing stock [up $1.2 billion], school property [$1.2 billion] and tertiary education sector land and buildings [up $300 million.]

But Dr Cullen said the important factor to be borne in mind were the economic considerations weighing against any big spending increases.

“The economy is running close to capacity and oil prices are high. Both these factors are already putting pressure on inflation, as the Reserve Bank warned last week.

“To further fuel consumption under these circumstances would simply risk pushing up interest rates,” Dr Cullen said.

ENDS

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