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

 

Scoop Business: NZ Dollar Catches Breath After "Goldilocks" Slump

The New Zealand dollar edged up following its dramatic slump yesterday after the Reserve Bank confirmed speculation it intervened in the currency market last month and PM John Key suggested a “Goldilocks” level far lower than at present. More>>

ALSO:

Biosecurity: Kiwifruit Claim To Hold Officials Accountable For Psa

Kiwifruit growers have joined forces to hold Biosecurity NZ accountable in the courts for its negligence in allowing 2010’s Psa outbreak that devastated New Zealand’s kiwifruit industry and exports. Foundation claimants representing well ... More>>

ALSO:

Poison: Anglers Advised Not To Eat Trout In 1080 Areas

With the fishing season opening in just a few days (1 October 2014), anglers are being warned by the Department of Conservation(DOC) not to eat trout from pristine backcountry waters and their downstream catchments, where the department is conducting 1080 poisoning operations. More>>.

ALSO:

Quotas: MPI Swoop On Suspected Fraudulent Fishing Activity

Ministry for Primary Industries (MPI) compliance officers swooped on a Hawkes Bay fishing enterprise today to secure evidence in an investigation into suspected fraudulent activity... “The investigation involves activity throughout the commercial supply chain – catching, landing, processing and exporting.” More>>

ALSO:

Scoop Business: Fonterra Slashes 2015 Milk Payout, Earnings Tumble 76%

Fonterra Cooperative Group cut its forecast 2015 milk price payout by about 12 percent, citing weaker global dairy prices and said there is a risk of further declines given strong global milk production. More>>

ALSO:

Scoop Business: RBNZ Keeps OCR At 3.5%, Signals Slower Pace Of Future Hikes

Reserve Bank governor Graeme Wheeler kept the official cash rate at 3.5 percent and signalled he won’t be as aggressive with future rate hikes as previously thought as inflation remains tamer than expected. The kiwi dollar fell to a seven-month low. More>>

ALSO:

Weather: Dry Spells Take Hold In South Island

Many areas in the South Island are tracking towards record dry spells as relatively warm, dry weather that began in mid-August continues... for some South Island places, the current period of fine weather is quite rare. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

Standards New Zealand

Mosh Social Media
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news