Budget 2019

The Wellbeing Budget

Glossary

Consumers Price Index (CPI)
Statistics New Zealand’s official index to measure the rate of change in prices of goods and services purchased by households. Core or underlying inflation measures exclude or give little weight to extreme or irregular price movements.
Core Crown
A reporting segment consisting of the Crown, departments, Offices of Parliament, the NZS Fund and the Reserve Bank.
Core Crown expenses
The day-to-day spending (eg, public servants' salaries, welfare benefit payments, finance costs and maintaining national defence etc) that does not build or purchase physical assets by the core Crown. This is an accrual measure of expenses and includes non-cash items such as depreciation on physical assets.
Core Crown revenue
Consists primarily of tax revenue collected by the Government but also includes investment income, sales of goods and services and other revenue of the core Crown.
Financial assets
Any asset that is cash, an equity instrument of another entity (shares), a contractual right to receive cash or shares (taxes receivable and Accident Compensation Corporation (ACC) levies) or a right to exchange a financial asset or liability on favourable terms (derivatives in gain).
Financial liabilities
Any liability that is a contractual obligation to pay cash (government stock, accounts payable) or a right to exchange a financial asset or liability on unfavourable terms (derivatives in loss).
Fiscal intentions (short-term)
Indications of the Government's intentions for operating expenses, operating revenues and the impact of its intentions on the operating balance, debt and net worth over (at least) the next three years. These intentions are required under the Public Finance Act 1989 (PFA).
Fiscal objectives (long-term)
The Government's long-term goals for operating expenses, operating revenue, the operating balance, debt and net worth, as required by the PFA. The objectives must be consistent with the defined principles of responsible fiscal management as outlined in the PFA and must cover a period of (at least) 10 years.
Gross debt
Represents debt issued by the sovereign (the core Crown) and includes any government stock held by the NZS Fund, ACC and the Earthquake Commission (EQC), but excludes settlement cash and bank bills.
Gross domestic product (GDP)
A measure of the value-added of all goods and services produced in New Zealand. Changes in GDP measure growth or contraction in economic activity or output. GDP can be measured on either an expenditure or production basis and in either real or nominal terms. (See following definitions.)
Labour productivity
Output per unit of labour input (where labour inputs might be measured as hours worked or the number of people employed).
Multi-factor productivity
Multi-factor productivity (MFP) relates a change in output to several types of inputs, typically capital and labour. MFP is often measured residually, as the change in output that cannot be accounted for by the change in combined inputs.
Net core Crown debt
Net core Crown debt provides information about the sustainability of the Government’s accounts and is used by some international rating agencies when determining the creditworthiness of a country. It represents gross debt less core Crown financial assets (excluding advances and financial assets held by the NZS Fund).
Net worth
Total assets less total liabilities of all Government reporting entities. The change in net worth in any given forecast year is largely driven by the operating balance and property, plant and equipment revaluations.
Net worth attributable to the Crown
Represents the Crown's share of total assets and liabilities and excludes minority interests' share of those assets and liabilities.
Operating balance
Represents OBEGAL (refer below) plus gains and less losses. The operating balance includes gains and losses not reported directly as a movement against net worth. The impact of gains and losses on the operating balance can be subject to short‑term market volatility and revaluations of long-term liabilities.
Operating balance before gains and losses (OBEGAL)
Represents total Crown revenue less total Crown expenses, excluding minority interest share. OBEGAL can provide a more useful measure of underlying stewardship than the operating balance as short‑term market fluctuations are not included in the calculation.
Projections
Projections relate to the period beyond the five‑year forecast period and are based on long‑ run economic and fiscal assumptions. For example, the projections assume no economic cycle and constant long‑run interest, inflation and unemployment rates.
Year ended
Graphs and tables within this document use different expressions of the timeframe. While some tables may refer to the end of the tax year (31 March), others will refer to the end of the Government's financial year (30 June). For example, unless otherwise stated references to 2018/19 or 2019 will mean the end of the financial year.
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