Financial Statements of the Government of New Zealand for the Six Months Ended 31 December 2012

The Financial Statements of the Government of New Zealand for the six months ended 31 December 2012 were released by the Treasury today.

These financial statements are compared against forecast tracks based on the 2012 Half Year Economic and Fiscal Update (HYEFU), released on 18 December 2012.

Core Crown tax revenue at $27.3 billion was close to forecast, $31 million (0.1%) lower than expected. Both source deductions and other individuals’ tax were above forecast (by $111 million and $122 million respectively) while corporate tax was under forecast by $151 million.

The OBEGAL deficit was $158 million lower than expected at $3.2 billion, primarily reflecting the lower core Crown expenditure.

The operating balance was in surplus at $1.7 billion ($2.3 billion higher than the forecast deficit of $541 million) as net investment gains continued to be recorded by the New Zealand Superannuation Fund and ACC. ACC also recorded an actuarial gain on its liability for outstanding insurance claims, which reflected favourable changes in the discount rate and claims experience.

The residual cash deficit was $558 million below forecast at $9.2 billion as tax receipts were higher than expected ($417 million or 1.7% above forecast) and capital spending was $159 million lower than forecast. GST contributed $220 million of the additional receipts, largely due to the timing of refunds. Source deductions were $158 million above forecast, which was in line with revenue, consistent with labour earnings growth data released earlier this month.

In addition to the residual cash result, currency in circulation was higher than forecast due increased public demand for currency over the Christmas period and resulted in net debt being $1.2 billion below forecast at $59.1 billion (28.4% of GDP).

Gross debt was $1.5 billion below forecast at $81.7 billion, or 39.2% of GDP. While the Government bond issuance was close to forecast, a larger than expected portion of this debt was held by the Reserve Bank reducing the amount of debt held externally.

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Arguably Reassuring: Inspector-General Finds GCSB "Arguably" Legal

Of the 88 individuals:

• 15 cases involving 22 individuals did not have any information intercepted by GCSB.

• another four cases involving five individuals were the subjects of a New Zealand Security Intelligence Service warrant and the GCSB assisted in the execution of the warrants. The Inspector-General is of the view that there were arguably no breaches and the law is unclear.

• the Bureau only provided technical assistance which did not involve interception of communications, involving three of the individuals, so no breach occurred.

• the remaining cases involved the collection of metadata, and the Inspector-General formed the view that there had arguably been no breach, noting once again that the law is unclear.
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