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

 


NZ govt deficit bigger than expected at 5 month mark

NZ govt operating deficit bigger than expected on lower corporate tax take, GST

By Paul McBeth

Jan. 24 (BusinessDesk) - The New Zealand government’s operating deficit was bigger than expected in the first five months of the financial year after it reported a smaller take in corporate taxes and goods and services tax than it anticipated a month ago in its updated forecasts.

The Crown’s operating balance before gains and losses (obegal) was a deficit of $2.34 billion in the five months ended Nov. 30, more than the $1.93 billion forecast in its Dec. 17 half-year economic and fiscal update, and down from $3.03 billion a year earlier.

“At this stage, our assessment is that the majority of this variance is timing in nature and will reverse out in coming months,” Treasury chief financial officer Fergus Welsh said in a statement.

Core Crown tax revenue was 2.1 percent lower than forecast at $23.88 billion, with corporate taxes $259 million below expectation with “a few large taxpayers revising down their current year provisional tax assessment” and GST $174 million short of the forecast due to earthquake related refunds, the Treasury said in commentary accompanying the accounts.

The government is forecast to post an obegal deficit of $2.3 billion in the current financial year ending June 30 before returning a surplus of $86 million the following year. Treasury officials are picking accelerating tax revenue growth as an expanding labour market provides more income tax, and as rising wages get caught in the fiscal drag of people entering a higher tax bracket.

Expenditure was in line with forecast at $29.16 billion, with higher than expected defence of $72 million offset by reduced costs across a range of departments.

The Crown’s core residual cash deficit was $4.01 billion in the five-month period, a bigger shortfall than the $3.79 billion forecast, and is forecast to return to surplus in 2017, after which the government plans to start reducing debt.

The period includes the government’s $365 million sell down of its Air New Zealand holding, on which it recognised a gain of $52 million.

The government’s net debt at $59.59 billion, or 27.6 percent of gross domestic product, was slightly lower than forecast, and gross debt of $83.21 billion, or 38.5 percent of GDP, was in line with expectations.

The operating balance, which includes movements in its investment portfolios and actuarial adjustments, was a surplus of $2.26 billion, $1.6 billion ahead of the December forecast due to net gains from the New Zealand Superannuation Fund. That compares to a surplus of $706 million a year earlier.

(BusinessDesk)


© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

What Winter? Temperature Records Set For June 20-22

The days around the winter soltice produced a number of notably warm tempertaures. More>>

Conservation Deal: New Kākāpō Recovery Partnership Welcomed

Conservation Minister Maggie Barry says the new kakapo recovery partnership between DOC and Meridian Energy is great news for efforts to save one of New Zealand’s most beloved birds. More>>

ALSO:

Tech Sector Report: Joyce Warns Asian Tech Investors View NZ As Hobbits And Food

Speaking in Wellington at the launch of a report showcasing the value of the technology sector to the New Zealand economy, Joyce said more had to be done to tell the country's technology stories overseas. More>>

ALSO:

Mediaglommeration: APN Gets OIO Approval For Demerger Plan

APN News & Media has received Overseas Investment Office approval for its plan to split out its NZME unit ahead of a potential merger with rival Fairfax Media's New Zealand operations. More>>

New Paper: Ninety-Day Trial Period Has No Impact On Firms' Hiring

The introduction of a 90-day trial period has had no impact on hiring by New Zealand companies although they are now in widespread use, according to researchers at Motu Economic and Public Policy Research. More>>

ALSO:

Corrections: Serco Exits Equity Stake, Remains As Operator

Serco has sold its equity stake in the company that holds the contract to design, build and run Wiri Prison in South Auckland but continues as sub-contractor to operate the facility. More>>

GDP: NZ Economy Grows Faster-Than-Forecast 0.7%

New Zealand's economy grew at a faster pace than expected in the first quarter of 2016 as construction expanded at the quickest rate in two years. The kiwi dollar jumped after the data was released. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news