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Government Finance Statistics (Central Government): Year ended June 2012
Embargoed until 10:45am  –  21 June 2013
Commentary

First release of government finance statistics for central government 

This information release is the first of a regular annual release. We analyse central government in New Zealand using government finance statistics (GFS) concepts and principles.

GFS is developed by the International Monetary Fund (IMF) specifically for measuring government financial activity. These concepts and principles allow government to be analysed on an economic rather than an accounting basis and aid cross-country comparisons.

See Introducing Government Finance Statistics for more information.

The GFS statistics in this release have been compiled 'bottom-up' from data for individual transactions, which gives different results to Treasury's 'top-down' GFS. There are also differences in which government units are included, data sources used and how transactions within government are netted out. The differences are largest in 2012, which includes some provisional data sources. For more information see data quality. Statistics NZ plans to work with Treasury to reconcile GFS and the crown accounts in the future.

Due to this being a first release, Statistics NZ is happy to receive any feedback. To provide feedback send us an email.

Expenses fall after earthquake payouts

Total operating expenses decreased 11.7 percent in the year ended June 2012. This was driven by a decrease in other capital transfers, from $13.6 billion in the year ended June 2011 to $1.2 billion in 2012. Capital transfers capture earthquake payments from the government. This is reflected in the breakdown of expenses in table 3, which shows a $10.3 billion decrease in the amount spent on social protection between June 2011 and June 2012.

Graph, Operating expenses, year ended June, 2009 to 2012.

Taxation revenue increases

Revenue from taxation increased to $62.0 billion in the year ended June 2012, up 5.6 percent from 2011. A key driver in the increase was the change in the goods and services tax rate from 12.5 percent to 15 percent on 1 October 2010. This change is also reflected in a 16.1 percent increase in the general taxes on goods and services category from 2010 to 2011. 

Decreases in both personal and corporate tax rates contributed to changes in the amount of tax revenue collected between 2009 and 2012. Revenue from taxation dropped $3.5 billion from 2009 to 2010, largely reflecting a 20.0 percent drop in taxes payable by corporations and other enterprises. This drop is driven by flow-on effects of decreases in the corporate tax rate and falling business profits during the global financial crisis.

Graph, Taxation revenue, year ended June, 2009 to 2012.

Net operating balance improves

The net operating balance increased by $13.7 billion in the year ended June 2012, but remained negative (at -$0.2 billion). This was due to expenses reducing from $111.0 billion in 2011 to $98.0 billion in 2012. The high expenses in 2011 were mainly due to a large increase in payments for the Canterbury earthquakes. In 2012, operating revenue increased $0.7 billion from 2011. The increase in revenue was offset  by a drop in 'other income', down $2.7 billion from 2011. Other income for 2011 included income relating to the earthquakes, received by the government from their insurers.

Graph, Revenue and expenses, year ended June, 2009 to 2012.

Net worth falls 

Net worth totalled $55.8 billion at 30 June 2012, down $18.6 billion from 30 June 2011. This follows a trend of falling net worth, where central government net worth decreased $39.5 billion between 30 June 2009 and 30 June 2012. The decrease in 2012 was largely driven by a change in the valuation of existing assets and liabilities. In 2011 the decline was primarily due to increased borrowing to finance earthquake payouts. Between 30 June 2009 and 30 June 2012, total central government liabilities increased 59.3 percent, compared with total assets increasing 7.9 percent.

At 30 June 2012, central government had:

  • financial assets of $127.6 billion
  • non-financial assets of $74.3 billion
  • liabilities of $146.0 billion.

Graph, Assets and liabilities, year ended June, 2009 to 2012.

For more detailed data see the Excel tables in the ‘Downloads’ box.

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