New Zealand Government’s Accounts In Better Shape, But Yet To Attain Pre-Pandemic Level

June 03, 2021 12:37 PM AEST | By Sonal
 New Zealand Government’s Accounts In Better Shape, But Yet To Attain Pre-Pandemic Level
Image source: CrizzyStudio, Shutterstock.com

The Treasury released the interim Financial Statements of the Government of New Zealand for the 10 months ended 30 April 2021 on Thursday.

The core Crown tax revenue result shows the strength of present economic conditions, which outperform the Budget Economic and Fiscal Update (BEFU) prediction for 2021. However, the economic price of the COVID-19 pandemic is still evident with elevated levels of OBEGAL and net core Crown debt.

Core Crown tax revenue in 10 months to April 2021 was $2 billion (2.5%) more than the BEFU 2021 prediction, mainly due to favourable variations in corporation tax, GST income, and other sources.

Source: © Lucidwaters | Megapixl.com

The total Crown is a valuable metric for measuring the government's entire financial activities and financial situation, as well as its influence on the economy.

The core Crown, which includes ministers, departments, Parliamentary offices, the New Zealand Superannuation (NZS) Fund, and the Reserve Bank of New Zealand, is the biggest component of the total Crown.

Improved accounts but challenges still persist

The Government accounts gave a better economic picture than earlier predictions but a long way to go to match the pre-pandemic levels.

The OBEGAL deficit was recorded at $5 billion, which was $3.6 billion less than the $8.6 billion expected deficit.

The operating balance before gains and losses, often known as OBEGAL, is the difference between revenue and expenses. Changes in the value of the government's assets and liabilities result in gains and losses.

DO READ: New Zealand’s Exports Drop, Oil and Logs Resist Trade Price Decline

When overall gains and losses are added to the OBEGAL result, the operational balance stood at $12.1 billion, which is $5.4 billion higher than the forecasted surplus of $6.7 billion.

Government numbers have also shown improved debt figures than feared in budget 2021.

Net Core Crown debt is at $107.5 billion, which is $2.6 billion less than the prediction in the 2021 Budget and far lesser than the prediction in the 2020 Budget, which predicted net core Crown debt would reach $129.5 billion by the end of June 2021.

As per Finance Minister Grant Robertson, the Crown's financial accounts are in a better shape than projected due to the ongoing resilience of the economy and confidence in the recovery. However, economic challenges still persist.

ALSO READ: ANZ Business Outlook for May indicates stressed New Zealand economy

The ongoing COVID-19 breakouts in other countries demonstrate that the global economic situation remains unstable. The economy is still impacted by supply-chain concerns. In New Zealand, the recovery is still uneven in certain sectors and regions.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (Kalkine Media, we or us), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary. Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.


AU_advertise

Advertise your brand on Kalkine Media

Sponsored Articles


Investing Ideas

Previous Next
We use cookies to ensure that we give you the best experience on our website. If you continue to use this site we will assume that you are happy with it.