Overview
The New Zealand Government, like most governments has had significant challenges over the last few years.
Covid had disrupted the country and its finances.
The government statements below are for the financial years ending 30 June, 2021 and 2020.
Revenue Statement
One of the peculiarities of analysing the government accounts is that there is no such thing as EBIT.
They don't pay tax.
We have used earnings before interest (EBI) instead.
Key Points:
Revenue rose 11.5% to $129.3 bn
Funding costs fell 39.5% to $2.3 bn
Losses down 80.0% to $4.5 bn
Significant extraordinary gains on financial and non-financial instruments totaling $25.0 bn
Operating balance rose from a massive $30 bn loss to a surplus of $16.3 bn
Horizontal Analysis:
Vertical Analysis:
Balance Sheet
Key Points:
Net worth increased 35.6% to $157.2 bn
Total assets increased 11.5% to $438.6 bn
Investments increased 26.0% to $113.3 bn
Fixed assets up 14.3% to $213.2 bn
Horizontal Analysis:
Vertical Analysis:
Movements in Net Worth
Key Points:
Large $22.5 bn unrealised net revaluations on assets in latest period
Big drop of 19.1% in net worth in the prior period to $115.9 bn
Cash Flows
Key Points:
Positive operating cash flow of $2.7 bn
Investing cash flow of -$12.2 bn
Financing cash flow of $7.6 bn
Closing cash $18.8 bn
Large finance raisings in prior period of $37.4 bn
Cash flow patterns show fund raising in both periods
Ratios
Key Points:
Doesn't cover it's funding costs from EBI
Finance costs of 1.40% on interest bearing debt
Segments
Key Points:
State owned enterprises returned 2.4% on net worth
Summary
The government spent a lot of money in the financial year ended 30 June, 2020 as covid hit but was able to keep its tax revenues high.
It raised a lot of debt and ran a deficit in 2020.
It financial position improved in the financial year ended 30 June, 2021.
Extraordinary items produced a positive operating balance.
The government returned to a positive operating cash flow in the current period.
But it was still raising money in the latest period as it did in the prior period.
In the prior period net worth fell by a large amount.
Unrealised net revaluations of assets helped a significant increase in net worth in the latest period.