Govt books show $1.2B surplus
The Government's books have more than $1 billion more than predicted, posting a large surplus in the first 11 months of the financial year ended last week, Treasury says.
The $1.2 billion operating balance before gains and losses is well above the forecast $193 million, Finance Minister Bill English putting it down to the Government's "careful stewardship".
But while the Government can celebrate the surplus, the Greens believe the party will be short-lived.
Today's result reflects total Crown revenue of $87 billion, which included a higher than forecast tax revenue, and total Crown expenses of $85.5 billion, which was less than predicted.
Core Crown tax revenue was at $61.2 billion - $401 million higher than forecast, including more money from corporate tax ($395 million) and other individuals' tax ($112 million).
However, GST was $261 million less than predicted, which Treasury says implies a downside risk to the full-year GST result.
Core Crown expenses were 0.7 percent lower than predicted, with a large proportion attributed to spending in education, which was $205 million less than forecast.
"While a large portion of this variance is timing in nature, some of the variance may persist until year-end," Treasury says.
Mr English says the surplus figure compares with a $1.1 billion deficit in the same period last year.
"The Government has a commitment to New Zealanders to prudently manage taxpayers' money and is working hard to improve the quality and effectiveness of public spending," he says.
However, he says there is "always volatility" in monthly Crown accounts, and the Government won't know for "some time" if it will meet its full-year surplus for 2014/15.
"What is important is that these results indicate the Government is on track to anchor Crown debt levels at a low, sustainable level."
Greens co-leader Metiria Turei says Treasury's pessimistic forecast for the economy is "looking increasingly more likely".
"This is a short-term fiscal result linked to the Government's short-term thinking, but the medium-to-long-term economic outlook is less rosy."
The Government might soon have to spend up in the face of declining business confidence, falling dairy prices, stagnant wages and the slow-down in Chinese economy, she says.
If that turns out to be the case, the Greens say the Government should be investing in high-value infrastructure with long-term benefits, such as the Auckland City Rail Link.
Audited financial statements for the full financial year are due in October.