Government books to stay in surplus

  • 10/05/2016
Government books to stay in surplus

The Government's books remain in surplus as higher than expected tax revenue allowed it to beat Treasury forecasts.

It posted an operating balance before gains and losses of $167 million for the nine months to the end of March -- $334 million more than forecast at December's half-year economic and fiscal update.

Core Crown revenue was $206 million higher than predicted while its expenses were $134 million lower than forecast.

The current operating surplus compares to a deficit of $358 million at the same time last year and core tax revenue has grown by 4.3 percent over that time.

Net losses were $3.8 billion higher than forecast due to greater than expected actuarial losses on the ACC claims liability and when gains were combined the operating balance was a $3.6 billion deficit -- $3.5 billion weaker than expected.

But the Green Party says the "wafer-thin" surplus is nothing to crow about.

Finance spokeswoman Julie Anne Genter says the figure is because of delays on spending in the Christchurch rebuild and Treaty settlements, "not because of some amazing economic management".

"While the Government's accounts are important, what's far more meaningful to New Zealanders is that unemployment has risen to 144,000 people and median Auckland house prices are now almost ten times the median household income," she says.

Those are signs the Government has "lost control" of the economy. 

Finance Minister Bill English is scheduled to release his eighth budget on May 26 when the Treasury will also update its forecasts.

In the December Budget Policy Statement, the Treasury projected a deficit of $400 million in the year ending June 30, having previously forecast a surplus of $200 million.