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

 

Forestry: Man Charged After 2013 Death

Levin Police have arrested and charged a man with manslaughter in relation to the death of Lincoln Kidd who was killed during a tree felling operation on 19 December 2013. More>>

ALSO:

Smells Like Justice: Dairy Company Fined Over Odour

Dairy company fined over odour Dairy supply company Open Country Dairy Limited has been convicted and fined more than $35,000 for discharging objectionable odour from its Waharoa factory at the time of last year’s ”spring flush” when milk supply was high. More>>

Scoop Business: Dairy Product Prices Decline To Lowest Since July 2012

Dairy product prices dropped to the lowest level since July 2012 in the latest GlobalDairyTrade auction, led by a slump in rennet casein and butter milk powder. More>>

ALSO:

SOE Results: TVNZ Lifts Annual Profit 25% On Flat Ad Revenue, Quits Igloo

Television New Zealand, the state-owned broadcaster, lifted annual profit 25 percent, ahead of forecast and despite a dip in advertising revenue, while quitting its stake in the pay-TV Igloo joint venture with Sky Network Television. More>>

ALSO:

Insurers Up For More Payouts: Chch Property Investor Wins Policy Appeal In Supreme Court

Ridgecrest NZ, a property investor, has won an appeal in the Supreme Court over insurance cover provided by IAG New Zealand for a Christchurch building damaged in four successive earthquakes. More>>

ALSO:

Other Cases:

Royal Society: Review Finds Community Water Fluoridation Safe And Effective

A review of the scientific evidence for and against the efficacy and safety of fluoridation of public water supplies has found that the levels of fluoridation used in New Zealand create no health risks and provide protection against tooth decay. More>>

ALSO:

Scoop Business: Croxley Calls Time On NZ Production In Face Of Cheap Imports

Croxley Stationery, whose stationery brands include Olympic, Warwick and Collins, plans to cease manufacturing in New Zealand because it has struggled to compete with lower-cost imports in a market where the printed word is giving way to electronic communications. More>>

ALSO:

Prefu Roundup: Forecasts Revised, Surplus Intact

The National government heads into the election with its Budget surplus target broadly intact, delivering a set of economic and fiscal forecasts marginally revised from May to reflect weaker commodity prices and a lower tax take. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news