Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Lower tax take hits government finances

NZ operating deficit wider than expected as GST, PAYE tax take misses forecasts

Dec. 5 (BusinessDesk) - The New Zealand government's operating deficit was wider than forecast in the first four months of the financial year as the Crown clipped a smaller tax take on consumer spending and wages.

The operating balance before gains and losses (obegal) was a deficit of $2.87 billion in the four months ended Oct. 31, $169 million, or 6.3 percent, bigger than forecast in the May Budget. Core tax revenue was 1.6 percent short of expectations at $17.92 billion, with goods and services tax and source deductions from weak private consumption and tepid wage growth the biggest drag on the accounts.

The tax take from GST accruals was 4.9 percent short of forecast at $8.13 billion in the four month period, while source deductions missed expectations by 2.6 percent at $7.16 billion. Treasury officials said they expect the weakness in both revenue streams to continue through the year.

The total corporate tax take was 1.5 percent below forecast at $2.41 billion due to a smaller return from non-resident withholding tax.

Core Crown spending was 1.5 percent below forecast at $22.95 billion, with delays in health expenditure and less spent on welfare for fewer beneficiaries.

The under-spends were offset by higher than forecast expenditure on earthquake expenses from land zoning decisions, and the government has lifted its Christchurch 'red zone' provision by $234 million to $1.17 billion.

Including gains from the New Zealand Superannuation Fund and Accident Compensation Corp's investment portfolio, the Crown's operating deficit was $34 million in the period, a 98 percent improvement on the forecast shortfall of $1.96 billion.

Net government debt was near expectations at $55.47 billion, or 27.1 percent of gross domestic product.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Half Full: Dairy Payouts Steady, Cash Will Be Tight

Industry body DairyNZ is advising farmers to focus on strong cashflow management as they look ahead to the 2015-16 season following Fonterra's half-year results announcement today. More>>

ALSO:

First Union: Cotton On Plans To Use “Tea Break” Law

“The Prime Minister reassured New Zealanders that ‘post the passing of this law, will you all of a sudden find thousands of workers who are denied having a tea break? The answer is absolutely not’... Cotton On is proposing to remove tea and meal breaks for workers in its safety sensitive distribution centre. How long before other major chains try and follow suit?” More>>

ALSO:

Scoop Business: NZ-Korea FTA Signed Amid Spying, Lost Sovereignty Claims

A long-awaited free trade agreement between New Zealand and South Korea has been signed in Seoul by Prime Minister John Key and the Korean president, Park Geun-hye. More>>

ALSO:

PM Visit: NZ And Viet Nam Agree Ambitious Trade Target

New Zealand and Viet Nam have agreed an ambitious target of doubling two-way goods and service trade to around $2.2 billion by 2020, Prime Minister John Key has announced. More>>

ALSO:

Scoop Business: NZ Economy Grows 0.8% In Fourth Quarter

The New Zealand economy expanded in the fourth quarter as tourists drove growth in retailing and accommodation, and property sales increased demand for real estate services. More>>

ALSO:

Scoop Business: RBNZ’s Wheeler Keeps OCR On Hold, No Rate Hikes Ahead

The Reserve Bank has removed the prospect of future interest rate hikes from its forecast horizon as a strong kiwi dollar and cheap oil hold down inflation, and the central bank ponders whether to lower its assessment of where “neutral” interest rates should be. The kiwi dollar gained. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news