Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ govt posts surprise budget surplus in first 9 months

NZ govt posts surprise budget surplus in first 9 months

By Jonathan Underhill

May 10 (BusinessDesk) - The New Zealand government posted a budget surplus in the first nine months of the financial year, against a Treasury forecast for a deficit, reflecting tax revenue that rose faster than Crown expenses.

The operating balance before gains and losses (obegal) was a surplus $167 million in the nine months ended March 31, compared with a forecast deficit of exactly the same amount, $167 million, in the half-year economic and fiscal update, the government's financial statements show.

Finance Minister Bill English is scheduled to release his eighth budget on May 26 and based on the Treasury's forecasts back in December, is facing an obegal deficit of $400 million in the year ending June 30. The Treasury had previously projected a surplus of $200 million, but with little inflation, income tax, GST and resident withholding tax are down against historical trends. Still the better-than-forecast nine-month figures mark the third straight month that the cumulative data has exceeded expectations.

“Budget 2016 will reflect this government’s continued commitment to responsible fiscal management," said English in a statement accompanying the Crown accounts release. "At the same time, it will build on the good progress we’ve made over the previous seven Budgets, with further investment in a growing economy and public services."

Core Crown revenue was $54.2 billion in the nine-month period or $206 million more than forecast. The variance reflected tax revenue that was $702 million, or 1.4 percent above forecast, and interest and dividend revenue that was $456 million below forecast, the Treasury said. The higher tax take was made up of source deductions (1.5 percent above forecast), GST (1.8 percent above) and customs and excise duty (2.9 percent above).

By contrast, core Crown expenses were just $134 million, or 0.2 percent above the Treasury's projection at $54.7 billion. The Treasury said this reflected a $170 million undershoot for the Ministry of Justice related to timing issues with Treaty settlements, delays in spending on land acquisition and anchor projects related to the Christchurch rebuild of $154 million, education expenses that were $127 million below forecast, some $88 million of timing differences in grants and benefits, and delays in the start of projects because of unfavourable weather, which accounted for $88 million.

The operating balance, a measure that includes non-cash balance sheet items, was a deficit of $3.8 billion, which was $3.47 billion worse than expected and reflected $3.6 billion of larger-than-expected actuarial losses on the ACC and Government Superannuation Fund liabilities related to changes in valuation.

Gross debt was $84.5 billion, or 34.3 percent of gross domestic product, which was $1.8 billion below forecast. Net debt was $1.3 billion below forecast.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Contact: Business Drops, New Generation On Hold

New Zealand’s second-largest energy company Contact Energy (‘Contact’) released its full year financial results for the 12 months to 30 June 2020 (‘FY20’) this morning. More>>

Mining: OceanaGold Announces Receipt Of WKP Mining Permit

MELBOURNE, Australia, Aug. 6, 2020 /CNW/ - OceanaGold Corporation (TSX: OGC) (ASX: OGC) (the 'Company') is pleased to announce it has received the mining permit for Wharekirauponga ('WKP') on the North Island of New Zealand. ... More>>


Economy: COVID-19 Lockdown Has Widespread Effects On Labour Market

In the June 2020 quarter, the seasonally adjusted unemployment rate fell to 4.0 percent, down from 4.2 percent last quarter, while underutilisation rose, Stats NZ said today. More>>


NZ Post: New Research By NZ Post Shows Online Shopping Grew 105% In Alert Level 3

New research by NZ Post into how the COVID-19 response has impacted the way Kiwis shop online, shows online shopping increased 105%* when the country moved into Alert Level 3, and may have changed the way Kiwis shop permanently. Online spend peaked ... More>>


Banking: Westpac NZ Lowers Merchant Fees For Small Businesses

Westpac NZ is rolling out a new merchant fee pricing structure that will lead to cost savings for more than 10,000 small and medium Kiwi businesses, and could make contactless transactions more widely available for customers. On 1 September, most ... More>>

REINZ: Million Dollar Plus Property Sales Increase 11.7% Nationally

The number of properties sold around the country for one million dollars or more during the first half (H1) of 2020 increased by 11.7% compared to H1 2019, with 5,426 million-dollar plus properties sold (up from 4,858 in H1 2019) according to the Real ... More>>

Antarctica NZ: Ice-Olation

Antarctica New Zealand is gearing up for a much reduced season on the ice this year and a very different deployment to normal! Before they head to one of the remotest places on the planet, all personnel flying south with the New Zealand programme will ... More>>


QV Valuations: July House Price Index Illustrates Market Resilience

According to the July 2020 QV House Price Index (HPI) results out today , property values recorded a marginal increase, up 0.2% over the month. This is somewhat of a turnaround from June, after the national index edged 0.2% lower. More>>


Property: Queenstown Rents Experience Biggest Drop In Seven Years

Rental prices in the Queenstown-Lakes district saw the biggest annual percentage drop in seven years after falling 28 per cent on June last year, according to the latest Trade Me Rental Price Index. Trade Me Property spokesperson Aaron Clancy said ... More>>

Seismology: The Quiet Earth

As many daily activities came to a halt during lockdown, the Earth itself became quiet, probably quieter than it has been since humans developed the technology to listen in. Seismologists have analysed datasets from more than 300 international ... More>>

RNZ: James Shaw Says Kiwibank, Not Ministers Should Decide On Investors

Climate Change Minister James Shaw says Kiwibank's decision to stop doing business with companies dealing in fossil fuels is the right one. More>>


FMA: Kiwis Confident Financial Markets Will Recover From COVID-19, Plan To Increase Investments

Despite the majority (60%) of investors experiencing losses as a result of COVID-19, the outlook on investing remains positive, according to a Financial Markets Authority (FMA) survey. Most Kiwis (71%) were optimistic that the pandemic will pass eventually ... More>>

FIRST Union: Warehouse Using Covid For Cover As Extensive Restructure Makes Everyone Worse Off

(FIRST Union comments on The Warehouse consultation and proposed restructure) 'Unfortunately the Warehouse have done the disappointing thing and used Covid-19 to justify a bunch of operational business decisions that will leave hundreds of workers without jobs ... More>>