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

 

NZ govt's operating deficit in line with expectations

NZ govt's operating deficit in line with expectations in first three months; debt below forecast

By Paul McBeth

Nov. 7 (BusinessDesk) - The New Zealand government posted a small operating deficit in line with expectations in the first three months of the 2018 fiscal year while debt was below forecast, giving the new Labour-led administration more headroom for big-ticket spending items.

The operating balance before gains and losses (obegal) was a deficit of $90 million in the three months ended Sept. 30, $3 million below forecast, and compared to a surplus of $222 million a year earlier. Tax revenue rose 3.9 percent to $18 billion, largely matching forecast, with a bigger take on income tax offset by lower than expected customs and excise duties.

"Obegal can fluctuate from month to month as the recognition of tax revenue does not happen uniformly throughout the year (peak months tend to be April/May), while expenditure is fairly static on a monthly basis before peaking in June," the Treasury said in a statement. "As a result it is not unusual for obegal to be a small surplus or deficit in the first part of the financial year."

A bigger inflow of provisional tax receipts than expected led to a smaller residual cash deficit than forecast at $1.2 billion, which contributed to net debt of $61.1 billion, or 22.8 percent of gross domestic product, some $3.07 billion below forecast. Lower gross debt of $87.5 billion, or 32.7 percent of GDP, was the other leg to the lower net debt position.

New Zealand's Debt Management Office yesterday deferred a 10-year bond tender until next year, saying it was flush with cash and wanted the chance to see what the new government had in store when the half-year economic and fiscal update was released.

The Labour-led administration campaigned on reducing government debt at a slower pace and running smaller operating surpluses than its rival National to revive what it claimed was a run-down public service and fast-track big-ticket items such as three free years of tertiary education and the KiwiBuild housing programme.

"The government is committed to the fiscal parameters we outlined before the election, which include reducing government net debt to 20 percent of GDP within five years of taking office, maintaining government expenditure to within the recent historical range of spending to GDP, and delivering a stable obegal surplus throughout the Treasury’s Budget forecast period," Finance Minister Grant Robertson said in a statement. "I do note that readings of business confidence during the government formation process reflected the temporary uncertainty at the time, which had been expected by economists no matter what the outcome of the coalition negotiations."

The Crown accounts showed the operating balance, which includes movements in the government's financial assets, was a surplus of $1.57 billion, some $969 million ahead of forecast, due largely to gains in the New Zealand Superannuation Fund's investment portfolio.

The government's net worth was $112 billion, $11.45 billion more than forecast, and up from $91.6 billion a year earlier due to the bigger operating surplus and an upward valuation of Crown land, largely in the housing stock and state highway network at $17.86 billion and $10.89 billion respectively.

(BusinessDesk)


© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Auckland Transport: Successful Bridge Repair Opens Two Additional Lanes To Traffic

The opening of two additional lanes on the Auckland Harbour Bridge this morning will help relieve some motorway congestion for motorists heading home to the North Shore tonight. More>>

ALSO:

Statistics New Zealand: COVID-19 Sees Record 12.2 Percent Fall In New Zealand’s Economy

Gross domestic product (GDP) fell by 12.2 percent in the June 2020 quarter, the largest quarterly fall recorded since the current series began in 1987, as the COVID-19 restrictions in place through the quarter impacted economic activity, Stats NZ said ... More>>

ALSO:

Climate: Scientists Release ‘Blueprint’ To Save Critical Ecosystems And Stabilize The Earth’s Climate

A group of scientists and experts produced the first comprehensive global-scale analysis of terrestrial areas essential for biodiversity and climate resilience, totaling 50.4% of the Earth's land. The report was published in Science Advances ... More>>

ALSO:

MPI: Independent Review Launched Into Assurances For Safe Transport Of Livestock By Sea

The Ministry for Primary Industries (MPI) has launched an independent review of the assurances it receives for the safe transport of livestock by sea. MPI Director-General Ray Smith says Mike Heron QC has been appointed to lead the review, which is expected ... More>>

ALSO:


Computers: New Zealand PC Market Grows Nearly 40% Due To Work From Home Demand

COVID-19 had large impacts on demand for PCs as businesses prepared for lockdowns by purchasing notebooks to mobilise their workforce. In the second quarter of 2020, New Zealand's Traditional PC market experienced a 39.7% year-on-year (YoY) growth ... More>>

ALSO:


University Of Auckland: Whale-Watching By Satellite – Follow Their Travels Online

Scientists have successfully attached satellite tracking tags to six New Zealand southern right whales, or tohorā, and are inviting the public to follow the whales’ travels online. Part of a major research project involving the University of Auckland ... More>>

Commerce Commission: Kiwibank Admits System Failures And Agrees To Pay Customers $5.2 Million

Kiwibank has entered into a settlement agreement with the Commerce Commission after reporting that it failed to have in place robust home loan variation disclosure policies, procedures and systems. In a settlement dated 27 August 2020, Kiwibank admitted that ... More>>

Ministry of Health: Public Transport Distancing Requirements Relaxed

Physical distancing requirements on public transport have been reviewed by the Ministry of Health to determine whether they are still required at Alert Level 2 (or below). The Ministry’s assessment is that mandatory face covering and individuals tracking ... More>>

ALSO:

NZHIA: New Zealand Hemp Industry Set To Generate $2 Billion Per Annum And Create 20,000 Jobs

A new report says a fully enabled hemp industry could generate $2 billion in income for New Zealand by 2030, while also creating thousands of new jobs. Written by industry strategist Dr Nick Marsh, the report has prompted calls from the New Zealand Hemp ... More>>

ALSO:

Stats NZ: One In 14 Employed People Report High Risk Of Losing Jobs

About one in 14 workers say they expect to lose their job or business by mid-2021, Stats NZ said today. A survey of employed people in the June 2020 quarter showed 7 percent felt there was a high or almost certain chance of losing their job or business ... More>>

ASB Quarterly Economic Forecast: NZ Economy Doing Better Than Expected, But Challenges Remain

August lockdown estimated to have shaved 8% off NZ’s weekly GDP, and 0.5% off annual GDP Economy now expected to shrink 5% (year-on-year) by end of 2020 Unemployment rate now expected to peak at 7.2% The latest ASB Quarterly Economic Forecast is less ... More>>

ALSO: