NZ operating surplus swelled by higher-than-expected tax
revenue in first 9 months
By Jonathan Underhill
May 8 (BusinessDesk) - The New Zealand government's operating surplus was boosted by higher-than-expected tax revenue in the first nine months of the year, suggesting the annual balance will be better than the Treasury had projected.
The operating balance before gains and losses (obegal) was a surplus of $3.3 billion in the nine months ended March 31, beating the forecast $2.38 billion in the half-year economic and fiscal update. For the year ending June 30, the HYEFU projected an obegal surplus of $2.54 billion.
The Treasury said corporate tax was above forecast by $300 million "mainly owing to provisional tax assessments being stronger than expected." GST and source deductions were both above forecast by $200 million and $100 million respectively, on higher-than-expected levels of employment and residential investment, while customs and excise duties were above forecast by $200 million. "Much of this variance can be expected to remain until year-end," it said.
Employment rose 0.6 percent in the first quarter for an annual increase of 3.1 percent, figures last week showed and the Reserve Bank's monetary policy statement this week will be the first to reflect the bank's expanded mandate that adds employment to its price stability focus. Other figures this month showed seasonally adjusted building consents jumped 14.7 percent in March although permits for houses were up just 0.1 percent.
Finance Minister Grant Robertson is due to release his first budget next week and has already announced a families package that replaces tax cuts announced by the previous government.
The financial statements for the nine months show core Crown expenses were $100 million below forecast at $59 billion. Adding gains and losses to the obegal, the operating balance was a $5.5 billion surplus, which was $10 million above forecast. The net worth attributable to the Crown came in at $116 billion, close to forecast.
Net debt was $2.2 billion less than forecast at $60.8 billion while gross debt was $2.4 billion above forecast at $87.7 billion, which the Treasury said mainly reflected higher-than-forecast government bonds of $1.7 billion.