Net worth is the difference between Crown assets and liabilities.
Under the Ministry of Finance and Economic Management Act 1995-96 Government is required to achieve and maintain levels of net worth that provide a buffer against factors that may impact adversely on net worth in the future.
Net worth is projected to reach $106.2 million by 30 June 2006, compared with an estimated $96.1 million as at 30 June 2005. The projected increase reflects the following factors:
• The projected operating surplus for 2005-06 of $4.5 million.
• Increases in fixed assets and infrastructural assets funded by foreign aid, estimated at around $7.2 million. Foreign aid is not included in the operating statement, but capital assets funded through aid appear on the Crown balance sheet.
• Gains from the revaluation of the Government debt of $2.4 million, based on exchange rate movements for the period 30 June to 30 November 2005.
• Write-downs of assets damaged in the cyclones. Such write-downs are assumed to equal the value of draw downs of the Asian Development Bank loan for cyclone recovery, estimated at $4.0 million.
Net worth is expected to continue to increase in the out years, reflecting projected operating surpluses and aid-funded capital expenditure.
Complete report: MFEM, Half Year Economic and Fiscal Update