2012-13 Government Mid-year Financial Projections Statement

2012-13 Government Mid-year Financial Projections StatementOperating Result: Achieve an Operating Surplus for the GeneralGovernment SectorThis target is forecast to be met in 2012-13, and in 2014-15 and 2015-16. On currentprojections, the target is not met in 2013-14.Operating surpluses (i.e. the balance of revenue over recurrent expenditure on the generalgovernment sector’s day-to-day operating activities, excluding capital investment) are anindicator that current services are being paid for by current users. Operating surpluses areessentially the Government’s savings and therefore an important source of cash fundingfor infrastructure investment.The outlook for the general government sector operating balance across the forwardestimates period has weakened since budget. This reflects a weaker revenue outlook, inparticular lower royalty revenue and the impact of lower projected public corporationprofitability on dividend and tax equivalent revenue. As discussed in Chapter 1, forecastgeneral government revenue over the forward estimates period has been revised down bya total of $1,203 million since budget-time.The Government has responded to the weaker revenue outlook with a range of newsavings measures. Had these measures not been implemented, the operating balance in2012-13 would be an estimated $387 million deficit, rather than the $140 million surplusnow forecast (see Chapter 1: Financial Projections).$ MillionNET OPERATING BALANCEGeneral Government SectorFigure 21,7502012-13 Budget 2012-13 Mid-year Review1,250750250-2502012-13 2013-14 2014-15 2015-1648