ACC, Super Fund prop up govt books; tax take falls
ACC and Super Fund prop up govt books as tax revenue dwindles
By Paul McBeth
Dec. 4 (BusinessWire) – The investment portfolios of ACC and the New Zealand Superannuation Fund continued to prop up the government’s books as corporate and personal tax revenues dwindled, according to the Treasury.
The Crown operating balance, including net gains and losses from government entities, was a deficit of $1.27 billion for the four months ended Oct. 31, according to Treasury financial statements, compared to a forecast $1.32 billion deficit.
“Higher-than-forecast investment returns reported by the NZS Fund and ACC - $1.3 billion and $0.6 billion respectively – were partly offset by investment losses by the Reserve Bank and an actuarial loss on the ACC claims liability,” said deputy secretary Colin Lynch in a statement. “Indications suggest that lower 2009 profitability will flow through to lower-than-expected 2010 tax revenue than was forecast at Budget 2009.”
The two investment funds have taken advantage of the strong rebound in assets as global markets pick themselves up from their lows at the start of the year following the global financial crisis.
The NZ Super Fund boosted its assets to $14.51 billion ahead of the $13.23 billion forecast and has brought its annualised return in the year to date to 11.74%. ACC’s investment portfolio rose to $14.3 billion compared to the projected $13.56 billion.
Tax revenue for the period was $15.27 billion, lagging behind $16.86 billion forecast as corporate tax came in 42% below projections at $1.43 billion.
The operating balance before gains and losses was a $3.27 billion deficit compared to the $2.05 billion forecast.
The government received dividend income was $394 million more than forecast as Mighty River Power and Meridian Energy paid out more than expected, while Petroleum royalty revenue was $156 million above expectations.
Net government debt remained in line with forecasts at $21.5 billion, or 11.9% of gross domestic product.
Tobacco excise tax revenue was 25% lower than expected at $49 million for the four month period, though its receipts collected was in line with forecasts at $55 million.
Personnel and operating costs were $510 million more than forecast due to $392 million higher payments than predicted for third-party health providers.
The Treasury boosted its provisions for the retail deposit guarantee scheme $$36 million to $899 million in the four month period from the quarter through September as the prospect of more finance company failures grows. Some 73 institutions are covered by the scheme, with deposits totalling $133.1 billion, of which about $5.5 billion is in the non-bank sector.