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www.treasury.govt.nz

6 March 2008

MEDIA STATEMENT

Embargoed until 10:00am, Thursday 6 March 2008

Dr Peter Bushnell

Deputy Secretary to the Treasury

Financial Statements of the Government for the Seven Months Ended 31 January 2008

The Financial Statements of the Government of New Zealand for the seven months ended 31 January 2008 were released by the Treasury today.

The 31 January 2008 monthly financial statements are compared against monthly forecast tracks based on the 2007 Half Year Budget Economic and Fiscal Update.

January results

• The operating balance was in deficit by $0.4 billion, or $4.2 billion lower than forecast. The three main contributors to this lower than expected result were:

− $2.5 billion lower than forecast returns on the financial asset portfolios of the NZS Fund ($1.5 billion lower than forecast), ACC ($0.7 billion lower than forecast) and EQC ($0.3 billion lower than forecast)

− $1.0 billion more than forecast loss on the revaluation of the ACC claims liability, and

− $0.7 billion lower than forecast tax revenue.

• Adjusting for the non-cash valuation changes, the OBEGAL was $0.6 billion lower than forecast at a surplus of $3.1 billion, primarily due to the lower than forecast tax revenue of $0.7 billion.

• Core Crown tax revenue variances were in other persons tax ($0.4 billion lower than forecast), corporate tax ($0.2 billion lower than forecast), GST ($0.2 billion lower than forecast) and source deductions including deductions from salary and wages ($0.1 billion higher than forecast).

• Residual cash and consequently the debt indicators were largely on target.

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