Hon Bill English

Minister of Finance

24 January 2014

Media Statement

Crown accounts reinforce need for discipline

The Government’s financial statements for the five months to 30 November reinforce the need to remain focused on disciplined fiscal and economic policy, Finance Minister Bill English says.

Lower core Crown tax revenue than forecast in the Half-Year Update last month left the operating deficit before gains and losses at $2.34 billion for the five months.

This was about $400 million larger than forecast, although the Treasury believes most of this revenue difference was due to timing issues and will reverse out in coming months.

“We remain on track to surplus in 2014/15, but, as we have said many times before, this remains quite a challenge,” Mr English says.

“In particular, we need to remain focused and disciplined and now is certainly not the time to get loose with spending and fiscal policy – as some political parties are advocating.”

The latest financial statements confirm core Crown expenses are close to forecast at $29.2 billion and net core Crown debt is slightly lower than forecast at $59.6 billion.

Continued strength in world sharemarkets generated gains on Crown financial instruments of $2.8 billion in the five months, which was $2 billion ahead of forecast. This left the operating surplus $1.6 billion larger than forecast at $2.3 billion.

“Overall, we are making good progress in putting the Government’s finances on a stronger footing and in getting back to surplus,” Mr English says. “It will require responsible fiscal management well beyond our return to surplus – something this Government is committed to delivering.”

ENDS

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