Pita’s perspective…
The New Zealand Treasury has released the government’s annual financial statements for the year ended 30 June 2026. The full report runs to 167 pages, so Pita Alexander has worked through it and pulled out the numbers that matter: what the government earned, what it spent, how much it owes, and why the trend in government debt should concern every New Zealander. Read on for the key figures and Pita’s view on what needs to happen next.
About the Treasury Report
Report dated 8 October 2026
Covers the year ended 30 June 2026
167 pages long
What Did the Government Earn in 2026?
Taxation revenue: $125.1 billion
Sales of goods and services: $25.2 billion
Other sovereign revenue: $10.3 billion
Other income: $11.8 billion
Total: $172.4 billion
This compares with $169.8 billion in the 2025 year, an increase of 1.53%.
What Did the Government Spend?
Welfare: $58.2 billion
Health: $31.8 billion
Education: $22.5 billion
Economic and industrial services: $12.8 billion
Transport and communications: $17.5 billion
Other expenses: $40.0 billion
Total: $182.8 billion
This compares with $183.5 billion in 2025, a decrease of 0.382%.
Government Debt and Liabilities
Insurance liabilities: $74.5 billion
Borrowed debt: $294.0 billion
Other debt: $63.4 billion
Total: $431.9 billion
This compares with $408.8 billion in 2025, an increase of 5.65%.
The Headline Numbers
Overall deficit (before OBEGAL adjustments): $10.4 billion
Gross domestic product (GDP): $456.8 billion
Gross government debt: $227.4 billion
Increase in gross government debt over the year: $23.8 billion
Gross debt to GDP ratio: 49.8%
Estimated Crown net assets at 30 June 2026: $188.350 billion
Servicing the Debt
Interest: $10.248 billion
Insurance: $9.052 billion
Together, this is $52.8 million per day.
The Government Balance Sheet
Gross Assets
Financial assets: $292.688 billion
Property, plant and equipment: $296.689 billion
Other assets: $30.888 billion
Total: $620.625 billion
Gross Liabilities
Borrowing: $293.999 billion
Insurance liabilities (ACC): $74.544 billion
Other liabilities: $63.372 billion
Total: $431.915 billion
Government Loans and Advances
Kiwis Group: $38.999 billion
Student loans: $10.545 billion ($6.322 billion discounted)
Other loans: $10.729 billion
Total: $60.273 billion
Other Notable Government Costs
National Superannuation: $24.721 billion, which is $67.7 million per day
Personnel expenses: $40.371 billion (mainly salaries and wages)
Audit Office fee for the government’s annual financial statements: $80 million
Where the Money Goes: Government Expenses by Category
Social security and welfare: $58.202 billion (31.84%)
Health: $31.789 billion (17.39%)
Education: $22.851 billion (12.50%)
Economic and industrial services: $12.812 billion
Transport and communications: $17.460 billion
Law and order: $7.634 billion
Core government services: $5.538 billion
Heritage, culture and recreation: $3.527 billion
Housing and community development: $4.034 billion
Defence: $3.484 billion
Environmental protection: $2.510 billion
Primary services: $2.445 billion
Government pension costs and other: $0.259 billion
Finance costs (interest): $10.248 billion
Total: $182.793 billion (100.00%)
All categories after education together make up 38.27% of total expenses.
Where the Money Comes From: 2026 Income Sources
Tax from individuals: $63.575 billion (36.88%)
Corporate tax: $17.099 billion (9.92%)
GST: $31.206 billion (18.10%)
Fringe benefit tax: $0.975 billion
Non-resident withholding tax: $0.714 billion
Resident withholding tax on interest: $2.572 billion
Resident withholding tax on dividends: $1.217 billion
Other indirect tax revenue: $7.717 billion
Other sovereign income: $10.302 billion
Other income: $11.800 billion
GST, government trading and expenses: $25.200 billion
Rounding of several figures: $0.023 billion
Total: $172.400 billion (100.00%)
Government Shareholdings and SOEs
The government holds shares in the following companies:
Air New Zealand Ltd: 49.00%
Genesis Ltd: 48.68%
Meridian Ltd: 48.98%
Mercury Ltd: 48.85%
There are 13 New Zealand state-owned enterprises.
Ten-Year Trends: Revenue, Expenses and Debt
Total Government Revenue, 2017 to 2026
2017: $103.442 billion
2018: $109.973 billion
2019: $119.142 billion
2020: $116.003 billion
2021: $129.335 billion
2022: $141.627 billion
2023: $153.011 billion
2024: $167.347 billion
2025: $169.811 billion
2026: $172.410 billion
That is an increase of $68.968 billion over nine years, an average increase of 5.84% each year.
Total Government Expenses, 2017 to 2026
2017: $99.007 billion
2018: $104.014 billion
2019: $111.376 billion
2020: $138.916 billion
2021: $133.722 billion
2022: $150.956 billion
2023: $161.822 billion
2024: $180.061 billion
2025: $183.502 billion
2026: $182.793 billion
That is an increase of $83.786 billion over nine years, or 7.05% a year.
Expenses have grown faster than revenue over this period, which is the heart of the problem.
New Zealand Gross Debt, 2017 to 2026
2017: $87.141 billion
2018: $88.053 billion
2019: $84.449 billion
2020: $102.257 billion
2021: $100.835 billion
2022: $118.950 billion
2023: $135.789 billion
2024: $175.966 billion
2025: $203.688 billion
2026: $227.448 billion
That is an increase of $140.307 billion over nine years, a compound annual increase of 11.25%. If this continues, the debt will double every 6.4 years.
These debt increases must be slowed down and stopped within the next few years.
The Cost Per Person
Estimated NZ population at 30 June 2026: 5,357,300
NZ population at 31 March 1991: 3,488,000
Increase over 35 years: 1,869,300, an average net increase of 53,408 per year, or 1.235% a year
Net migration gain in 2026: 17,600
Visitor arrivals in the year ended 30 June 2026: 3,674,579 (3,375,321 in the 2025 year)
Net dwellings consented in 2026: 41,268
Government spending per man, woman and child in 2026:
Health: $5,934 each
Welfare: $10,864 each
Education: $4,265 each
Total: $21,063 each
Each day in 2026, the government earned about $472 million and spent about $501 million.
Treasury and Parliament: Who’s Running the Show?
NZ Treasury employees at 30 June 2026: approximately 600
Australian Treasury employees at 30 June 2026: approximately 4,200
Secretary to the NZ Treasury: Iain Rennie (commenced 18 November 2024 on a five-year term), salary approximately $700,000
Previous Secretary: Dr Caralee McLiesh (2019 to 2024), now Auditor-General of the Commonwealth of Australia
Parliamentary salaries:
Prime Minister: $520,500 ($10,010 per week)
Cabinet Ministers: $327,100 ($6,290 per week)
Backbench MPs: $181,200 ($3,484 per week)
Pita’s Summary: A Long Way From Balancing the Books
There is a deficit of $10.4 billion before OBEGAL (“smoke and mirrors”). That is a long way from satisfactory.
This deficit represents around $2,364 per year for each of New Zealand’s approximately 4,400,000 adults.
The social welfare cost of $58.202 billion keeps increasing steadily. New Zealand does not have enough people or enough income to cope with this annual cost.
What Would It Take?
A 2% increase in gross overall income would be $3.448 billion
A 2% decrease in gross overall expenses would be $3.648 billion
A 2% increase in the GST rate would generate $3.360 billion
Overall improvement: $10.456 billion
This is the sort of approach that is required.
No More “No More Taxes”
Politicians should not be promising “no more taxes”. That is a dangerous comment when you are already in a significant loss position.
The bottom line is that our present coalition is some $10 billion from balancing the books. New Zealand needs a surplus each year of no less than 1% of GDP, which is around $4 billion. A balanced budget is not a good enough goal.
Talk to Alexanders Rural
The same principles apply to your own farm business as to the country’s finances: know your numbers, keep debt under control and aim for a genuine surplus, not just break-even. If you’d like help with financial management, business planning or improving the profitability of your farming operation, get in touch with the team at Alexanders Rural. We’re always happy to talk it through.
Any views or opinions expressed in this article are those of Pita Alexander only and do not reflect the views of any other person or organisation. The information provided is for informational purposes only and is not intended to be financial advice.
DISCLAIMER
Any views or opinions expressed in this article are those of Pita Alexander only and do not reflect the views of any other person or organisation.
The information provided in this article is for informational purposes only and is not intended to be financial advice.
Any errors or omissions are the author’s own.