Hon Bill English

Minister of Finance

8 April 2016

$398 million surplus in year to February

The $398 million operating balance before gains and losses (OBEGAL) surplus for the eight months to 28 February was $730 million better than Treasury forecast at the Half-Year Update in December, Finance Minister Bill English says.

Mr English says the result has helped reduce net debt which, at 25.3 per cent of GDP, is more than $1.5 billion lower than expected in Treasury’s latest forecasts.

“The monthly results can fluctuate significantly – the February OBEGAL surplus was $500 million less than in January – so we don’t put too much stock into any particular month’s results.

“What is more pleasing is the overall trend in the Government’s books. We’ve moved from an $18.4 billion deficit to around balance, and as long as we remain fiscally prudent we are on track to reduce net debt to around 20 per cent of GDP in 2020,” he says.

The operating balance – which includes gains and losses – was $4.6 billion worse than expected. This was driven by the Super Fund recording a $1.8 billion loss due to unfavourable market conditions, and falling interest rates and an increase in claim volumes have contributed to a $3.1 billion increase in ACC’s outstanding claims liability.

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