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

 

NZ govt spends more than expected, posts 4-month deficit

NZ govt spends more than expected, posts 4-month deficit


By Paul McBeth

Nov. 30 (BusinessDesk) - The New Zealand government spent more than expected in the first four months of the financial year and posted a small deficit in the period.

Treasury reported an operating deficit of $258 million before gains and losses in the four months ended Oct. 31, compared to a deficit of $308 million a year earlier. It had forecast a surplus of $29 million in the period.

The Crown's core expenditure rose 6.4 percent to $28.34 billion, some $344 million more than forecast in the May budget. About $172 million of the difference from forecast was due to accounting adjustments which reflect the way departments use their appropriations rather than their best estimates when setting their forecasts. Core government services spending was $228 million ahead of forecast at $1.34 billion.

Transfer payments and subsidies - such as superannuation, welfare, Working For Families tax credits, and KiwiSaver subsidies - were up 13 percent from a year earlier, although tracking below Treasury's forecast.

The Crown accounts started the year on a stronger footing as the tax-take was bolstered by rising company profits, a bigger working population and increased investment gains. The Treasury will update its forecasts next month at the half-year economic and fiscal update.

"It’s still early in the new financial year and, as with the September results, readings earlier in the year can show an obegal deficit due to the different timings of revenue and expenses," Finance Minister Grant Robertson said in a statement. "It should be remembered that expenses at the end of the previous financial year came in below forecast, meaning there might be reversals early in the current 2018/19 year."

Tax revenue rose to $26.12 billion in the period, up 8.1 percent from a year earlier, and was $197 million ahead of forecast. Strong jobs growth underpinned higher income tax, and residential investment supported GST.

However, company tax revenue was below forecast, with gross corporate tax revenue marginally lower at $3.09 billion. Robertson said the Treasury expects that variance to narrow through the year.

Firms have grown increasingly pessimistic about the economic outlook as the pace of New Zealand growth slows. Surveys have shown companies are concerned about profitability as they face rising costs but feel unable to pass that on to consumers through higher prices.

The Crown accounts show net debt was below expectations at $61.03 billion, or 21.1 percent of gross domestic product, due to the stronger start to the financial year. Residual cash showed a $3.45 billion deficit, some $795 million more than forecast due to higher operating and capital payments than expected. Still, the Crown's net worth was $126.14 billion, ahead of forecast on revaluations to land and state highways.

The government's operating balance, including $1.3 billion of investment losses on entities including the New Zealand Superannuation Fund and Accident Compensation Corp, was a deficit of $4.19 billion. Changes in the discount rates to calculate ACC's long-term claims and the Government Superannuation Fund's long-term liabilities drove $2.7 billion of losses on non-financial instruments which also weighed on the balance.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Government: New Year Border Exception For Seasonal Workers In The Horticulture And Wine Industries

2000 additional RSE workers to enter New Zealand early next year employers must pay these workers at least $22.10 an hour employers will cover costs of managed isolation for the RSE workers RSE workers will be paid the equivalent of 30 hours work a week ... More>>

ALSO:

Grey Power: Is Disappointed To Learn Of More Bank Closures

Many older people are being left without essential services because of cost cutting and the march of modern technology. It is now expected that most banking transactions can occur via the internet or telephone. Jan Pentecost, President of the Grey Power ... More>>

ALSO:

Economy: Supply Chain On Brink Of Overload Says National Road Carriers

The New Zealand supply chain is on the brink of overload and it looks like the upcoming peak imports season may push it over the edge says National Road Carriers Association (NRC) CEO David Aitken. “Worldwide supply chains are in disarray,” says Mr Aitken. ... More>>

Stats NZ: Annual Goods Trade Surplus At 28-Year High

New Zealand’s annual goods trade surplus reached a 28-year high of $2.2 billion as imports tumbled in the year ended October 2020, Stats NZ said today. “This is the largest annual surplus since the July 1992 year, driven mainly by much lower ... More>>

ComCom: How Real Is That Bargain?

The Commerce Commission urges retailers and consumers to think hard about the bargains being offered as ‘Black Friday’ and Christmas draw near. Black Friday has now overtaken Boxing Day in terms of retail spending, according to data from electronic ... More>>

Stats NZ: Births And Deaths: Year Ended September 2020

Births and deaths releases provide statistics on the number of births and deaths registered in New Zealand, and selected fertility and mortality rates. Key facts For the year ended September 2020: 57,753 live births and 32,670 deaths ... More>>

ALSO:


Forest & Bird: Kākāpō Wins Bird Of The Year 2020

The nation has voted and Aotearoa New Zealand has a new Bird of the Year. New Zealand’s moss-colored flightless parrot has climbed to the top-spot for the second time in Forest & Bird’s annual Te Manu Rongonui o Te Tau/Bird of the Year competition. ... More>>