Government and Fiscal Policy

Above forecast-revenue bolsters Crown accounts in April 2013

Wednesday June 05, 2013 Dr Adrian Slack

This month’s fiscal accounts are a story of unexpected revenue, and rosy gains and losses forecasts.

The latest monthly fiscal accounts for the 10 months to April 2013 show a boost from above forecast-revenue. Treasury’s monthly accounts show that Core Crown tax revenue was $486 million higher than forecast.


A notable contributor was accrued corporate tax being $524 million more forecast. This reflects a re-building of confidence in the economy, along with the boost from the Canterbury re-build. Treasury suggests that “just over half this variance is thought to be the result of higher corporate profitability, partly resulting from continued strength in equity markets.”

With tightly controlled expenses, these results bolstered the Crown accounts in April 2013.


The following table and figures summarise the actual and forecast Core Crown accounts.




The Core Crown OBEGAL and Operating Balance are forecast to remain in the red at the end of the fiscal year (30 June 2013) at -$7.8 billion and -$1.98 billion, respectively. From a Total Crown perspective, the OBEGAL also registers a forecast deficit of -$6.3 billion. However, strong forecast gains (net of losses) from the revaluation of assets and liabilities, such as investments in financial assets and long-term liabilities for ACC and GSF, are expected to push the Operating Balance to a surplus of $1.92 billion.


The rather rosy Operating Balance (surplus) figure does show up in the May Budget and Economic Fiscal Update (BEFU).  But the Total Crown Operating Balance measure tends not to be trumpeted as the headline figure.This is because it is a ‘noisy’ measure due to the (net) gains and losses item, which can reflect methodology changes as much as real value/activity changes.