Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search


Govt accounts show strong position

Hon Grant Robertson

Minister of Finance

31 October 2019



Govt accounts show strong position, impact of tax timing changes

The Government is in a strong position to help the economy counter international headwinds, according to the first set of accounts for the new financial year.

“It’s becoming clearer that issues like the US-China trade war are affecting confidence overseas and in New Zealand. Our wariness of the global situation has been reinforced by talks I’m having with global counterparts in Japan and Vietnam,” Grant Robertson said.

“Last year’s strong surplus means the Government’s current net debt position of 20.3% of GDP is lower than the 21.0% expected at the Budget. The low debt gives us space for further opportunities to invest to strengthen the economy against global headwinds.”

The Treasury today released the Crown accounts for the first three months of the new 2019/20 financial year. The underlying numbers show we are in good shape.

“However, some figures, like the new year’s OBEGAL to date, have been temporarily affected by timing issues related to Inland Revenue’s upgraded computer system.

“When we announced the surplus for 2018/19, the Treasury said changes to Inland Revenue’s system meant some tax previously expected to be recognised in the 2019/20 accounts was bumped forward into 2018/19.

“The new system has also changed when monthly tax revenue is recognised in the accounts within the current financial year, particularly for corporate tax.

“The timing issues are highlighted by today’s accounts. They show recognised tax revenue in the first three months of the year was $1.5 billion below forecast at $20.4 billion. However, the Treasury says this variance is set to reverse out over the year as the timing issues even out.”

Because the OBEGAL always starts again in each new financial year, revenue coming in lower than expenditure means the new year’s OBEGAL is in deficit at this point.

It’s not unusual to have a deficit in the first three months of a financial year. This is because expenses are more evenly spread across the year, while revenue increases towards the end. There was a deficit at the start of the last year which later reversed out.

“Other measures in the accounts not affected by timing issues show we are in good shape,” Grant Robertson said.

“These include the lower-than-forecast net debt position at 20.3% of GDP. Also, the corporate tax ‘receipts’ measure – which tracks the actual amount of cash coming in – was $356 million (10%) higher than forecast, indicating stronger business profits over the past year.

“This fits with other real data like the low unemployment rate of 3.9%, which indicate the fundamentals of the economy are strong.”


© Scoop Media

Parliament Headlines | Politics Headlines | Regional Headlines

Madrid Climate Talks: Decade Ending 2019 Likely To Be Hottest On Record

Exceptional global heat driven by greenhouse gas emissions mean this decade will most likely go down as the warmest on record, according to the World Meteorological Organization...

The agency also finds that 2019 is on track to be the second or third warmest year in history, with the global average temperature during January through October, roughly 1.1 degrees Celsius above the pre-industrial era.

“If we do not take urgent climate action now, then we are heading for a temperature increase of more than 3°C by the end of the century, with ever more harmful impacts on human wellbeing.” More>>


NZ First Conflicts Of Interest: New Details Around Timeline

New information has emerged showing it was the New Zealand First chief of staff who identified potential conflicts of interest between a forestry company and two senior government ministers, sparking a series of declarations. More>>



Five New Cancer Meds In Six Months: Pharmac Funds More Cancer Medicines, Faster Assessment

PHARMAC has confirmed that two new medicines – olaparib for ovarian cancer and fulvestrant for breast cancer – have been approved for funding... Rituximab and bortezomib, which are already funded, have also been approved for widened access following successful commercial proposals from new suppliers. More>>


Gordon Campbell: On Stoking Fears About Cannabis Law Reform

It was always going to be hard to have a rational debate on cannabis reform. Far easier for politicians to win votes by stoking alarm... More>>


Tūhoronuku Mandate Recognition Ends: "New Opportunity" For Ngāpuhi Treaty Negotiations

The Crown is providing an opportunity for the hapu of Ngāpuhi to rebuild its framework from the ground up for collective negotiations to deal with its historical Treaty claims... More>>


Pike River: Next Phase Of Recovery Underway

“Fresh air will be pumped into the Pike River Mine drift this week, following acceptance of the plan for re-entry beyond the 170m barrier by New Zealand’s independent health and safety regulator WorkSafe." More>>


Peters Stoic: Russia On Afghan Firing Range Deaths

The foreign minister won't be calling in the Russian ambassador concerning comments made about New Zealand soldiers in Afghanistan. In a media briefing late last month, Russian Foreign Ministry spokesperson Maria Zakharova said New Zealand must investigate crimes against civilians. More>>


Christchurch Call: Online Crisis Response Workshop In Wellington

Governments and tech companies are holding a two-day workshop, hosted by YouTube/Google in Wellington, to test the Christchurch Call Shared Crisis Response Protocol. More>>





InfoPages News Channels