Financial Statements of the Government of NZ to 30/6/15
The Financial Statements of the Government of New Zealand for the financial year ended 30 June 2015 were released today.
The economy continues to grow, with the 18th consecutive quarter of GDP growth in the three months to 30 June giving growth of 2.4 per cent from the same quarter last year and annual average growth of 3.0 per cent in the year to 30 June 2015.
The Government's programme to build a more productive economy is also delivering dividends in terms of the Crown's finances which have been turned around in recent years.
In the wake of the global financial crisis and the Canterbury earthquakes, the total Crown's annual operating balance excluding gains and losses (OBEGAL) was a deficit of $18.4 billion, equivalent to 9 per cent of national income in a year.
Careful stewardship over day-to-day expenses permitted the Government to significantly reduce the size of the OBEGAL deficits year after year and, in 2014/15, the Crown reports a return to surplus - delivering on the Government's key fiscal priority first set in 2011.
The OBEGAL surplus of $414 million is equal to 0.2 per cent of GDP in the year to 30 June 2015 while the Government's operating balance including gains and losses of $5.8 billion is equal to 2.4 per cent of GDP.
In the year to June 2015, the core Crown's revenue was $72.2 billion, while core expenses were $72.4 billion.
The Government has continued to restrain growth in spending while focusing on getting more effective results from existing spending, particularly for the most vulnerable New Zealanders.
While core Crown expenses grew by $1.2 billion (1.7 per cent), the increase in spending was lower than the pace of growth in the economy, resulting in expenses easing to 30.1 per cent of GDP, compared with over 34 per cent of GDP four years ago.
The approach of the Government to expenditure control is working well for New Zealand and for New Zealanders.
In its Budget 2015 forecasts, the Treasury had forecast a small OBEGAL deficit in 2014/15.
However, the Government's ongoing commitment to solid expenditure control, together with tax revenue being marginally stronger than the Treasury had expected, means the Crown accounts were in surplus.
Returning to surplus in 2014/15 is a significant milestone, but the Government is committed to continued prudent management of the public finances, including effective revenue raising and ongoing attention on operating spending and the underlying drivers of demand for public services, reprioritisation of spending that is not deliver results and rigorous management of our balance sheet.
Our focus must remain on steady and ongoing reductions in public debt over the medium term. That is the most prudent approach to take in a still uncertain global environment.
Hon Bill English
Minister of Finance
30 September 2015