The interim Financial Statements of the Government of New
Zealand for the eight months ended 28 February 2025 were
released by the Treasury today. The February results are
reported against forecasts based on the Half Year Economic
and Fiscal Update 2024 (HYEFU 2024), published on 17
December 2024, and the results for the same period for the
previous year.
The majority of the key
fiscal indicators for the eight months ended 28 February
2025 were better than forecast. The Government’s main
operating indicator, the operating balance before gains and
losses excluding ACC (OBEGALx), showed a deficit of $5.0
billion. This was $1.6 billion smaller than forecast largely
due to higher than forecast core Crown tax revenue and lower
than forecast core Crown expenditure. Net core Crown debt
was $0.8 billion lower than forecast at $181.0 billion, or
42.4% of GDP.
Core Crown tax revenue, at
$79.9 billion, was $0.9 billion (1.1%) higher than forecast
with the largest variance relating to GST being $0.6 billion
(3.1%) above forecast.
Core Crown expenses, at $92.2
billion, were $0.6 billion (0.6%) below forecast. This
variance is mostly timing in nature and was spread across a
range of agencies.
The OBEGALx was a deficit of $5.0
billion, $1.6 billion less than the forecast deficit. When
including the revenue and expenses of ACC, the OBEGAL
deficit was $6.6 billion, $1.4 billion less than the
forecast deficit.
The operating balance deficit of
$0.8 billion was $2.6 billion lower than the forecast
deficit. This reflected both the favourable OBEGAL result
and net favourable valuation movements. Net losses on
non-financial instruments were $1.6 billion less than
forecast (largely owing to a $0.4 billion net actuarial gain
on ACC’s outstanding claims liability compared to a
forecast net loss of $1.0 billion). This favourable result
was partly offset by net gains on financial instruments
being $0.7 billion lower than forecast, driven by New
Zealand Superannuation Fund (NZS Fund)’s investment
portfolio and the impact of movements in NZD since forecasts
were prepared.
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The core Crown residual cash deficit of
$5.0 billion was in line with forecast. While the net core
Crown operating cash outflows were higher than forecast by
$0.3 billion, they were offset by net core Crown capital
cash outflows by the same amount.
Net core Crown debt
at $181.0 billion (42.4% of GDP) was $0.8 billion lower than
forecast. With the core Crown residual cash deficit in line
with forecast, factors not impacting residual cash have
improved net core Crown debt. Of these, the most significant
was foreign exchange movements since the HYEFU 2024 forecast
which have resulted in $0.6 billion of net gains improving
net core Crown debt without impacting the core Crown
residual cash indicator.
Gross debt at $208.8 billion
(48.9% of GDP) was $8.2 billion higher than forecast,
largely owing to higher than forecast unsettled trades,
derivatives in loss and the issuances of Euro Commercial
Paper driven by short-term cash requirements. However, this
increase in gross debt was broadly offset by a corresponding
increase in financial assets, therefore this has not flowed
through to the net core Crown debt measure or to net
worth.
Net worth at $187.6 billion (43.9% of GDP) was
$3.1 billion higher than forecast largely reflecting the
year-to-date operating balance result.
