The New Zealand Debt Management Office will lift issuance by $3 billion over the coming four years on a slower forecast return to cash surplus.
The DMO will raise $8 billion in 2014/15, and $7 billion each of next three years, with an extra $1 billion to be issued in 2015, 2017 and 2018, it said in a statement. The office will repay a net $2.2 billion in 2015 and $4.5 billion in 2018, with net issuance of $5.1 billion and $6.8 billion in 2016 and 2017.
The Treasury estimates the government's residual cash balance will return to surplus in 2018, at $710 million, a year later than in the December half-year economic and fiscal update. The forecast shortfall over the four-year horizon of $9.4 billion is up from a previous expectation of $4.4 billion.
The smaller and slower return to a residual cash surplus was due to higher operating allowances and lower tax receipts than forecast, and prompted the increased issuance.
The government's tax take, while rising, has lagged estimates with later than expected corporate annual returns, and lower tobacco excise than anticipated.
Still, the government's net debt is forecast to continue decline relative to gross domestic product, falling to 23.8 percent by 2018 from 27.6 percent as at March 31.
The DMO is planning a 2027 bond and a new inflation-indexed bond in the first half of 2014/15 subject to market condition. The inflation linked bond will make up $3 billion of the 2014/15 issuance.
The office also intends to keep repurchasing the April 2015 nominal bond in the 2015 fiscal year.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Fantasy or fait accompli – the Key-Joyce handover hypothesis
- Housing NZ boss Glen Sowry quits to head Metlifecare
- Hellaby's unwanted shoe business still dragging its heels
- Auckland team wins drone competition, attracts Hollywood interest
- NZIER calls for major shift in how Reserve Bank targets interest rates
Most listened to
- Nevil Gibson examines the sceptics' view of the Paris climate change talks
- Matthew Hooton rates Steven Joyce's chances of being next National leader
- NZIER's Kirden Lees and Rob Hosking discuss changing how the Reserve Bank targets interest rates
- Hellaby’s new managing director Alan Clarke says he isn’t expecting a pickup at Number 1 Shoes any time soon