Government finances on track in latest figures

The Government’s finances are largely in line with Budget forecasts in the ten months to 30 April, Finance Minister Bill English says.

The operating balance before gains and losses (OBEGAL) deficit was $1.371 billion for the period – $148 million lower than forecast in Budget 2014.

“These results confirm Treasury’s Budget forecasts which showed that we are on track to a modest surplus of $372 million next year, increasing to $3.49 billion in 2017/18,” Mr English says.

“Sound fiscal policy is essential for sustaining economic growth over the medium term. By keeping on top of government spending we can also help interest rates stay lower for longer.”

Core Crown tax revenue continued its trend of below forecast outturns. It was $111 million below the Budget 2014 forecast. This was largely offset by higher than expected non-tax revenue. Overall, core Crown revenue was $12 million below forecast.

The financial statements show core Crown tax revenue was $2.3 billion or 4.8 per cent higher than at the same time last year, reflecting stronger growth in source deductions, GST and corporate tax.

Core Crown expenses for the ten months were $90 million below forecast, and were the main driver of the lower than anticipated OBEGAL deficit.

“In the next four years, the Government will continue to focus on achieving better results as the main way of restraining future government spending, and increasing the surplus,” Mr English says. “We’re already making good progress. Crime and reoffending are falling, and educational achievement is on the rise.

“Returning to surplus will allow us to repay debt, and give us better choices in how we support New Zealand families and households.”

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