The better-than-expected Crown accounts released today show the Government’s careful management of the COVID-19 health crisis was the right approach to support the economy.

As expected, the Crown accounts for the year to June 2020 show the operating balance before gains and losses, or OBEGAL, was in deficit. However that result was $5.2 billion better than the Treasury forecast in Budget 2020, due to a stronger-than-expected economy and careful management of Government spending.

Core Crown tax revenue of $85.1 billion was $2.8 billion higher than forecast in the Budget. This also reflects the stronger economy as New Zealand got on top of COVID-19 quickly and opened up the economy to give the recovery a head start.

“The Government’s decision to act swiftly when COVID-19 was taking hold overseas has meant New Zealand’s economy has bounced back better than the Treasury and many economists predicted.

“We were in a good economic position going into the COVID-19 health crisis which helped, but it was also the decisions made during that time which have meant the economy has not collapsed as predicted,” Grant Robertson said.

Net core Crown debt as a percentage of GDP was 27.0% of GDP at 30 June, below the 30.2% forecast in the May Budget.

“The cost of servicing this debt remains very low by historical standards. During the 2019/20 year, the Government borrowed at record low interest rates for long-term infrastructure investments to future-proof the economy, boost productivity and create jobs,” Grant Robertson said.

The Half-Year Economic and Fiscal Update will be released on Wednesday 16 December.

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