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

 


NZ govt operating deficit bigger than expected as tax take l

NZ govt operating deficit bigger than expected as tax take lags

By Paul McBeth

Jul. 8 (BusinessDesk) - The New Zealand government posted a bigger operating deficit than forecasts in the May Budget, as company tax and GST again lagged expectations.

The Crown's operating balance before gains and losses (obegal) was a deficit of $1.1 billion in the 11 months ended May 31, smaller than the $3.27 billion shortfall a year earlier, though more than the $767 million deficit forecast in the Budget economist and fiscal update. Core tax revenue was up 4.6 percent from a year earlier, though $459 million short of expectations at $56.5 billion, with goods and services tax was lower than forecast on more subdued domestic consumption. The company tax take was below forecast due to some large downward adjustments in end of financial year assessments.

"It is too early to determine the likely impact of these results on the current and future financial years as both downside and upside risks exist," acting chief government accountant Fergus Welsh said in a statement. The Treasury will update its forecasts in the pre-election economic and fiscal update on Aug 19.

In May, Finance Minister Bill English confirmed a return to Budget surplus in the 2015 fiscal year at $372 million, wider than the $86 million projected in the half year economic and fiscal update, with bigger surpluses projected after that as an accelerating economy helps bolster the government's books.

The accounts show Crown expenses were $36 million below forecast at $64.17 billion at the end of May, with underspending across a number of departments, the biggest of which was at the Ministry of Business, Innovation and Employment. Core spending was up from $63.74 billion a year earlier.

The residual cash deficit narrowed to $3.83 billion from $5.58 billion for the same 11 month period in 2013, though was $398 million below forecast due to the lagging tax take.

Net debt was $453 million ahead of forecast at $59.47 billion, or 26.2 percent of gross domestic product, while gross debt was below forecast at $82.15 billion, or 36.3 percent of GDP.

The operating balance, which includes movements in the Crown's investment portfolio, was a surplus of $4.33 billion, $165 million below forecast, and smaller than the $6.48 billion surplus at the same stage of the previous fiscal year. Gains in the value of its equity investments were offset by an increase in the Accident Compensation Corp's insurance liability.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news