Stats NZ has a new website.

For new releases go to

As we transition to our new site, you'll still find some Stats NZ information here on this archive site.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
Government Finance Statistics (Local Government): Year ended June 2012
Embargoed until 10:45am  –  26 July 2013

About government finance statistics

Government finance statistics (GFS) is a set of a concepts and principles developed by the International Monetary Fund (IMF) specifically for measuring government financial activity. These concepts and principles allow the entire public sector to be analysed. That is:

  • all levels of government (both central and local government in New Zealand, and state government in countries like Australia and the United States of America) 
  • all sectors of government (general government, public non-financial corporations, and public financial corporations).

Unlike accounting-based financial statements, GFS is an economic representation of a government's financial activity. It is the IMF's preferred standard for publishing financial statistics on government.

Local government: this sector includes all local authorities (city councils, district councils, unitary authorities, and regional councils) and local government special-purpose entities, such as Auckland Transport and its predecessor the Auckland Regional Transport Authority.

The operations of council-controlled organisations (CCOs), which include local authority-owned corporations or trading entities, are generally not part of the local government sector covered by GFS. However, three CCOs are included in this release as they operate as non-market entities. These are Auckland Transport, Auckland Waterfront Development Agency, and Auckland Tourism Events and Economic Development. 

The major functions of government are to provide non-market goods and services, maintain law and order, regulate the economy, and redistribute income. Entities in the government sector are primarily financed by taxation revenue rather than sales of goods and services.

More definitions

Assets: are what government owns. They represent a store of value, and can be a source of income or generate economic benefit when used. Assets are either current or non-current.

Balance sheets: measure the values of stocks of assets or liabilities. They are typically compiled at the beginning and end of the accounting period.

Capital transactions: relate to establishing or owning an asset. Capital transactions must be linked to a particular purpose. For example, charges for development work (eg building new subdivisions or buildings) to cover additional infrastructure costs incurred by government.

Capital transfer: a transaction in which one institutional unit provides a capital asset to another unit without receiving anything in return.

Change in inventories: the change in the value of inventories of raw materials, work-in-progress, and finished goods, over a given period. The change is measured in the appropriate prices in the market at the time additions and withdrawals are made.

COFOG: the Classification of Functions of Government is a detailed classification of the functions or socioeconomic objectives that government units aim to achieve through various outlays. This is displayed in table 3.

Current transfer: a transaction in which one unit provides goods, a service, or an asset to another unit for the purposes of current expense without receiving anything in return.

Depreciation: the gradual writing-off over time of the value of a physical asset such as infrastructural assets, restricted assets, buildings, mobile equipment, and other plant, machinery and office equipment.

Employee expenses: the gross earnings of all paid employees. Includes overtime, sick and holiday pay, severance and redundancy payments, levies paid to the Accident Compensation Corporation, and employer contributions to superannuation schemes.

Financial assets: consist of financial claims, monetary gold, and special drawing rights (SDRs) allocated by the IMF. Examples include: cash and bank deposits, stocks held, short-term accounts receivable, pre-payments, Treasury bills, and short-term loans.

Liabilities: debts that establish an obligation to provide economic benefits to another party that holds the corresponding financial claims.

Net financial worth: equal to the total value of all financial assets less the total value of all liabilities. It is an important component of net worth.

Net lending/borrowing position: an indicator of the financial impact of government activity on the rest of the economy. It shows a government's financing requirement and is calculated as the GFS net operating balance less the net acquisition of non-financial assets.

A positive net lending/borrowing position indicates a net lending position. After accounting for all operating transactions and their net acquisition of non-financial assets, a government is still in surplus and has funds it can invest or lend.

A negative net lending/borrowing position indicates a net borrowing position. After accounting for all operating transactions and their net acquisition of non-financial assets, a government will need to borrow (or run down its financial investments) to fund all its expenditure.

Net operating balance: change in the net worth of government due to transactions, rather than provisions and valuation or other changes. It is equal to total operating income less total operating expenses, and is important when measuring the ongoing sustainability of government operations. Provisions and valuation or other changes are treated as other economic flows in government finance statistics rather than transactions.

Net worth: the difference between the total value of all assets and the total value of all liabilities.

Non-financial assets: all economic assets other than financial assets. These can be fixed assets, such as infrastructure and buildings, inventories, valuables, or non-produced assets.

Operating expenditure: the amount spend on providing core services.

Operating income: funding earned to provide core services.

  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+
  • Share this page to Facebook
  • Share this page to Twitter
  • Share this page to Google+