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


NZ govt operating deficit smaller than forecast

NZ govt operating deficit smaller than forecast on higher personal tax take, customs duties

By Paul McBeth

Dec. 6 (BusinessDesk) - The New Zealand government posted a smaller operating deficit than expected in the first four months of the financial year as it reported a bigger personal tax take and reaped more from customs duties on imported tobacco.

The Crown’s operating balance before gains and losses (obegal) was $1.75 billion in the four months ended Oct. 31, smaller than the $2.14 billion forecast in the May Budget economic and fiscal update, and down from a shortfall of $2.87 billion a year earlier. Treasury is scheduled to release updated forecasts on Dec. 17.

Core crown tax revenue was 1 percent ahead of forecast at $19.34 billion, as a bigger take from personal income and larger than expected duties on imported tobacco and exported refined fuel offset a smaller company tax. Core expenses were also 1.1 percent below forecast at $23.32 billion due to delayed spending on the Canterbury earthquakes and Treaty of Waitangi settlements.

“The result continues a trend over the past year of the Government’s fiscal results exceeding forecasts, as we remain on track to return to surplus in 2014/15, Finance Minister Bill English said in a statement.

“Although the economy is improving and revenue is increasing, there are a lot of other large influences on the government’s books. These include a growing prominence of financial assets and liabilities, which expose taxpayers to greater volatility,” he said.

The government’s residual cash deficit of $3.26 billion was smaller than the $3.42 billion forecast in May, with $1.26 billion raised from the sale of instalment receipts in Meridian Energy. Another $627.5 million is payable on May 15, 2015.

Net debt of $59.08 billion, or 27.8 percent of gross domestic product, was slightly lower than the $59.43 billion, or 27.9 percent of GDP, forecast. Gross debt of $82.89 billion, or 39 percent of GDP, was more than the $80.83 billion, or 38 percent of GDP, expected, due to more government bond issuance.

The government’s operating balance, which includes movements in its investment portfolios and actuarial adjustments, was a surplus of $1.83 billion compared to a forecast deficit of $1.47 billion, and compared to a shortfall of $34 million for the same period in 2012.

That was largely due to investment portfolio gains being $1.7 billion ahead of expectations, a $798 million actuarial gain on its Accident Compensation Corp liability and a $539 million gain from its Government Superannuation Fund liability.

Offsetting that was a $210 million loss from the Emissions Trading Scheme due to carbon prices rising to $3.65 as at Oct. 31 from 24 cents at the May budget. The Treasury also lifted its provision for ETS credits to $389 million from the $164 million forecast.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Power Outages, Roads Close: Easter Storm Moving Down Country

The NZ Transport Agency says storm conditions at the start of the Easter break are making driving hazardous in Auckland and Northland and it advises people extreme care is needed on the regions’ state highways and roads... More>>


Houses (& Tobacco) Lead Inflation: CPI Up 0.3% In March Quarter

The consumers price index (CPI) rose 0.3 percent in the March 2014 quarter, Statistics New Zealand said today. Higher tobacco and housing prices were partly countered by seasonally cheaper international air fares, vegetables, and package holidays. More>>


Notoriously Reliable Predictions: Budget To Show Rise In Full-Time Income To 2018: English

This year’s Budget will forecast wage increases through to 2018 amounting to a $10,500 a year increase in average full time earnings over six years to $62,200 a year, says Finance Minister Bill English in a speech urging voters not to “put all of this at risk” by changing the government. More>>


Prices Up, Volume Down: March NZ House Sales Drop 10% As Loan Curbs Bite

New Zealand house sales dropped 10 percent in March from a year earlier as the Reserve Bank’s restrictions on low-equity mortgages continue to weigh on sales of cheaper property. More>>


Scoop Business: Chorus To Appeal Copper Pricing Judgment

Chorus will appeal a High Court ruling upholding the Commerce Commission’s determination setting the regulated prices on the telecommunications network operator’s copper lines. More>>



Cars: Precautionary Recalls Announced For Toyota Vehicles

Toyota advises that a number of its New Zealand vehicles are affected by a series of precautionary global recalls. Toyota New Zealand General Manager Customer Services Spencer Morris stressed that the recalls are precautionary. More>>


'Gardening Club': Air Freight Cartel Nets Almost $12 Million In Penalties

The High Court in Auckland has today ordered Swiss company Kuehne + Nagel International AG to pay a penalty of $3.1 million plus costs for breaches of the Commerce Act. Kuehne + Nagel’s penalty brings the total penalties ordered in this case to $11.95 million ... More>>


Crown Accounts: Revenue Below Projections

Core Crown tax revenue has increased by $1.9 billion (or 5.0%) compared to the same time last year. However this was $1.1 billion less than expected and is reflected across most tax types, continuing the pattern of recent months. More>>


Get More From Scoop

Computer Power Plus
Search Scoop  
Powered by Vodafone
NZ independent news