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19 Mar 2018 23:35
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  •   Home > News > Politics

    Govt books beat forecasts

    Greater tax takes have boosted the government's books for the seven months to January, with the Crown's operating surplus coming in at $2.4 billion.

    The New Zealand government's operating surplus continued to track ahead of forecast in the first seven months of the financial year as optimistic consumers and low unemployment spurred higher income and GST taxation.

    The operating surplus before gains and losses (obegal) was a surplus of $2.44 billion in the seven months ended January 31, some $677 million more than expected, and more than twice the $1.15b a year earlier, the latest Crown accounts show.

    Core tax revenue rose 5.7 per cent to $44.84b, some $937m more than expected, as a robust labour market and strong residential investment swelled the GST and income tax takes, while customs and excise duty was bolstered by a higher seasonal peak in tobacco duties than anticipated.

    Treasury officials dropped earlier uncertainty about whether those variances would bed in, saying much of it is "expected to remain until year end".

    Consumer confidence has outperformed business sentiment since the Labour-led government took office last year.

    Finance Minister Grant Robertson will deliver his first budget on May 17 and has been seeking to allay business fears about the government's direction.

    He'll get another chance on Friday when he delivers a speech to the Auckland Chamber of Commerce outlining the government's plans for implementing its programme, while maintaining prudent debt and surplus limits.

    Wednesday's accounts show core Crown expenses rose 4.7 per cent to $45.99b, some $155m more than expected with some spending being recognised earlier than anticipated.

    Net debt was $1.23b below forecast at $60.13b, or 21.6 per cent of gross domestic product, as the bigger tax take made for a smaller residual cash deficit of $889m.

    Still, gross debt was $2.07b above forecast at $85.96b or 30.9 per cent of GDP, due to an increase in short-term borrowings and unsettled trades at the end of the month, which the Treasury expects will reverse out of the accounts.

    The Crown's net worth of $117b was $2.06b more than forecast and up from $97.23b a year earlier.


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