Crown accounts reflect Government’s balanced fiscal management

The latest Crown Accounts show a solid result, despite challenging international conditions – reflecting the Government’s careful management of the books.

For the eleven months to the end of May 2022 the Operating Balance before Gains and Losses (OBEGAL) deficit was $7.7 billion, $5.5 billion below that forecast in May’s Budget.

Core Crown expenses were $1.4 billion below forecast. Core Crown tax revenue was three percent above forecast. The key drivers of this were higher than forecast corporate tax ($1.6 billion), net other individuals’ tax ($0.7 billion) and PAYE ($0.6 billion).

The Treasury anticipates that much of this improved result will be reflected in end of financial year results meaning the OBEGAL deficit will be less than forecast at the May Budget.

Net debt was 16.6 percent of GDP, $4.3 billion higher than forecast. This is primarily driven by weaker market conditions affecting the financial portfolio held by the New Zealand SuperFund and ACC derivatives. The Treasury has previously noted that the new net debt measure would be more volatile than the previous measure. This level of debt is still one of the lowest levels in the OECD.

“While results at the aggregate level remain solid, we know that for many New Zealand households and businesses they are finding it tough going at the moment.

“The global economy is facing a number of challenges, triggered by the ongoing effects of the COVID-19 pandemic,” Grant Robertson said.

“Countries around the world are grappling with higher inflation that they have been used to, supply chain disruptions are feeding into that along with the ongoing war in Ukraine.

“The Government is doing what it can to shield New Zealanders from the impacts of the global headwinds, including reducing fuel excise and road user charges, and introducing a temporary cost of living payment that will begin from next month.

“We are doing this while also carefully managing the Government accounts as we have throughout this COVID pandemic,” Grant Robertson said.

The annual audited crown accounts for the financial year ending the 30th of June will be released in October.