Hon Dr Michael Cullen
Minister of Finance

6 October 2008

2007/08 accounts position Crown in strong position ahead of challenges Media Statement

The Financial Statements of the Government of New Zealand for the financial year that ended on June 30 show the Crown in a strong financial position ahead of the challenging international economic times ahead, says Finance Minister Michael Cullen.

"Since 1999, the government has driven gross sovereign-issued debt down, from over 35 per cent of GDP to 17.4 per cent at June 30 of this year, while simultaneously building up the financial assets of the New Zealand Superannuation Fund to part pre-fund future pension liabilities," Dr Cullen said.

"In 2006, the government's net financial asset position moved into positive territory for the first time in the nation's history, a position that has been strengthened in 2007 and in the latest financial year and that positions the Crown in a strong position to face the challenging international economic times ahead," Dr Cullen said.

The Treasury today published the financial statements which show that the total Crown OBEGAL surplus stood at 3.1 per cent of GDP at June 30, compared with a surplus of 3.5 per cent of GDP a year earlier.

The accounts show that the Crown was in a small net positive financial asset position, excluding the financial assets held by the New Zealand Superannuation Fund, while the Crown's net financial asset position inclusive of those financial assets stood equal to 7.2 per cent of GDP, a strengthening from 4.4 per cent of GDP at June 30, 2007.

At June 30, 2008, gross Crown debt stood equal to 17.4 per cent of GDP, down from 18.2 per cent of GDP 12 months earlier, and compared with the Government's fiscal strategy to have gross debt anchored around 20 per cent of GDP over the next decade.

ENDS

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