Hon Bill English

Minister of Finance

9 June 2015

April surplus highlights volatility in fiscal numbers

The Government’s $448 million OBEGAL surplus in the 10 months to 30 April – around $1 billion better than the $555 million deficit forecast in the Budget – highlights the inherent volatility in monthly fiscal results, Finance Minister Bill English says.

“We’ve always said small differences between large revenue and expenditure numbers can lead to swings of several hundred million dollars in the OBEGAL balance,” he says. “From the Government’s point of view, what matters is the quality of our spending, the results we get from that spending and clear improvement in our overall fiscal direction.

“We won’t know whether we will make surplus for the full year until we see the final accounts in October. But it’s clear it will be a close run thing.”

April was the second month this financial year where the Government has achieved a surplus, following a $77 million surplus in the seven months to 31 January.

The April surplus was the result of core Crown tax revenue being $437 million ahead of Treasury’s budget forecasts, core Crown expenditure being $420 million below forecast and results from State Owned Enterprises and Crown entities being $172 million better than forecast.

“The Treasury advises that, based on the April results, there is now some upside risk in both tax revenue and Crown expenses,” Mr English says. “However, it’s not yet clear how much of this latest overall improvement will carry through to the full year’s result.

“Whatever happens, the Government will continue with its responsible and balanced economic and fiscal programme, which is taking New Zealand in the right direction.”

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