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Government Financial Statements, 11 Months to 31/5/17

6 July 2017


Embargoed until 10.00am, Thursday 6 July 2017

Paul Helm, Chief Government Accountant

Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2017

The Financial Statements of the Government of New Zealand for the eleven months ended 31 May 2017 were released by the Treasury today. The statements are compared against forecasts based on the 2017 Budget Economic and Fiscal Update (BEFU) published on 25 May 2017.

Core Crown tax revenue was $1.1 billion higher (1.6%) than forecast for the eleven months ended 31 May 2017 and $4.8 billion higher (7.4%) compared to the same period last year. The most significant variances from forecast were corporate tax ($688 million above forecast) and GST ($245 million above forecast).

Of the corporate tax variance, around $250 million relates to revenue forecast in June, but recognised in the May year-to-date results, and is therefore expected to reverse next month. The remaining corporate tax variance of around $450 million is anticipated to be permanent in nature and relates to higher-than-expected tax assessments and additional portfolio investment entity (PIE) tax revenue.

Core Crown expenses at $69.3 billion were $345 million lower than forecast. Just over $200 million of this variance relates to the impairment of tax receivables that were less than forecast.

The OBEGAL was a surplus of $4,490 million for the eleven months to 31 May 2017, compared to a forecast surplus of $2,943 million. This favourable variance of $1,547 million was largely due to the core Crown tax revenue and core Crown expense results discussed above.

Net gains at $8.4 billion, were $257 million less than forecast. This result primarily related to lower than expected actuarial gains (mostly reflecting a lower discount rate used to convert future cash into present day dollars), partially off-set by higher than forecast investment returns on the Crown’s investment portfolios. Net gains, combined with the OBEGAL surplus, resulted in an operating balance surplus of $13.1 billion ($1.3 billion higher than forecast).

Net worth attributable to the Crown was $103.8 billion, $1.3 billion ahead of forecast for the eleven months ended 31 May 2017. This is primarily attributable to the operating balance result.

Core Crown residual cash was $802 million higher than forecast largely the result of core Crown tax receipts being ahead of forecast.

Directly impacted by the residual cash results, and an increase in circulated currency issued, core Crown net debt at $59.3 billion (22.4% of GDP) was $1.2 billion lower than forecast.

Full release with summary chart and full financial statement: mediafsgnz11mthsmay17.pdf

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