Introduction
This release of the Crown Accounts Analysis is for the period 1991–2005 inclusive. It is both the first release of the provisional June 2005 data for the Crown, and a re-release of the previously published Crown Accounts Analysis 1991–2004. The analysis of the Crown accounts records the financial transactions of the Government with all other economic sectors, such as private enterprise, households, local government, state-owned enterprises (SOEs) and the rest of the world. The coverage corresponds to the core Crown activities reported in the Financial Statements of the Government of New Zealand (Parliamentary Paper B.11), specifically in relation to ministers of the Crown, and departments and offices of Parliament. State-owned enterprises and other Crown entities are excluded, although any transactions between these bodies and the core Crown will be included. The accounting information is presented in a New Zealand System of National Accounts (NZSNA) format. The analysis therefore provides an alternative statement of the major revenue and expenditure items, and results in key economic variables and balances (such as saving) which are consistent with those found in the national accounts.
Current account surplus (Crown saving)
The Crown recorded a surplus in the current account during the June 2005 financial year. The $8,099 million surplus, or saving, was $2,419 million higher than the result for the June 2004 year, when a surplus of $5,680 million was recorded. The increase in saving was the result of a 10.1 percent rise in current income (to $51,424 million) exceeding a 5.6 percent rise in current expenditure (to $43,325 million).
Revenue from taxation
There was a 9.8 percent increase in taxation revenue in the June 2005 year (up $4,273 million to $47,755 million).
Income taxation increased by $3,549 million (12.4 percent) in the June 2005 financial year to reach $32,067 million. Company tax increased $1,599 million and taxes on individuals' income increased by $1,476 million. Withholding tax increased by $474 million. The increase in taxation revenue reflected the growth in the economy over the year (gross domestic product in constant prices grew by 3.1 percent in the year to June 2005), and employment and wage growth.
Total taxes on production and imports increased by 4.8 percent to reach $15,688 million for the year ended June 2005. The greatest contribution to the increase came from a $444 million (4.3 percent) increase in GST. The increase in revenue was driven by relatively strong economic growth during the year resulting from increased consumer spending and new housing construction.
Other revenue
There was a $365 million increase in total property income for the year ended June 2005. Dividend income paid to the Government by both Crown Research Institutes and SOEs increased by $182 million, interest received increased by $137 million, and rent on natural assets increased by $46 million.
Current expenditure
Current expenditure rose from $41,016 million in the June 2004 year to $43,325 million in the June 2005 year, an increase of $2,309 million (5.6 percent).
Current transfers accounted for much of the increase, with current transfers to other government entities, such as health and educational institutions, increasing by $933 million (7.4 percent) to reach $13,533 million.
Social assistance benefits paid in cash increased by $96 million (0.7 percent) in the year to June 2005. Increases in payments to superannuitants (up $192 million) and to recipients of the invalids benefit and disability allowance (up $113 million) were partly offset by a $256 million decrease in payments of unemployment benefit due to falling unemployment. Social assistance benefits in kind increased by $370 million in the June 2005 year, largely as a result of increased health payments.
Interest paid on domestic and foreign debt was $2,586 million in the June 2005 year, up 1.7 percent from the $2,544 million recorded a year earlier.
Capital account
With revenue exceeding both current and capital expenditure, the Crown recorded a rise in net lending. Net lending increased from $5,300 million in the June 2004 year to $7,721 million in the June 2005 year, an increase of $2,421 million. This follows a $966 million increase from the June 2003 year to the June 2004 year.
Gross fixed capital formation was $1,062 million in the June 2005 year, $105 million higher than in the previous year. In 2005 there was major capital expenditure on corrections facilities.
Reconciliation
In Table 7, the Crown Account Analysis (CAA) saving figure of $8,099 million is reconciled to the operating balance of $6,247 million, as shown in the "Financial Statements of the Government of New Zealand" – the latter being presented according to generally accepted accounting practice (GAAP). The major reason for the difference lies in the treatment of the unfunded liability of the Government Superannuation Fund, debt provisions and write-offs, and asset/liability revaluations. In the Crown's accounts these items are recorded as expenses and included in the operating balance. In the CAA these items are either excluded or they are not considered current expenses.
Treatment of computer software
On 17 November 2005, the National Accounts: Year ended March 2005 figures will be released. They will include revisions relating specifically to the treatment of computer software in the System of National Accounts (SNA93). These revisions have not yet been incorporated into this release.
Revisions
Ongoing work on the above reconciliation has resulted in a number of reclassifications and corrections to previously published series.
For technical information contact:
Greg Hughes
Christchurch 03 964 8700
Email: national.accounts@stats.govt.nz