Tax cuts could soon be on the way with the Government opening up its books today revealing Crown accounts are tracking along nicely.
"We've always said, if economic and fiscal conditions allow, we will begin to reduce income taxes," Finance Minister Bill English said.
Surplus is currently sitting at around $1.8 billion which is up from $414 million on the previous year.
He labelled the new operating balance as a significant turnaround comparing it to the $18.4 billion deficit in 2011 due to the Global Financial Crisis and the Canterbury earthquakes.
"The New Zealand economy has made significant progress over the past eight years," he said.
"This delivers more jobs and higher incomes for New Zealanders, and also drives a greater tax take to help the Government's books."
Tax revenue is up $1.6 billion than what was expected in last year's Budget.
The opening of the Government's books also showed the state housing portfolio has increased by $3.3 billion, much of that due to land increases in Auckland.
But it wasn't all good news with revelations today that Housing New Zealand is facing financial difficulties.
Bill English, who is also the Minister for Housing New Zealand, was questioned over warnings Housing NZ could be broke by February next year.
"Going broke is Solid Energy, that's what going broke is. There is no question about the viability of Housing New Zealand. Just look at the annual accounts...no one's ever asserted that," he said.
Official Information Act documents though show both Treasury and Housing NZ warned the Government since November last year that Housing NZ needed more capital injection if it were to continue with development expectations.
That includes maintaining and upgrading its current properties, accelerating the sale of surplus housing and land, while also embarking on a major build programme.
"As Housing New Zealand moves from building 300 houses a year to building 1000 or 2000 it will just need probably more support from Government to do that," Bill English said.
In recent months the Government announced it would not require Housing New Zealand to provide a dividend over the next two years.
However, it seems unlikely that would have been achievable given the grim financial forecasts it currently faces.
The Government is now being forced to provide a potential cash bail out for Housing New Zealand, though Bill English refuses to comment on how much that would cost.