Hon Grant Robertson

Minister of Finance

The latest update on the government accounts shows New Zealand is in a solid position to meet global economic challenges and support New Zealanders facing cost of living pressures.

For the five months to the end of November, the Operating Balance before Gains and Losses (OBEGAL) recorded a deficit of $2.4 billion, $61 million lower than forecast at the Half Year Economic and Fiscal Update in December 2022 and $5.9 billion lower than for the same period a year ago. Tax revenue came in slightly above expectations.

“The Government knows that the cost of living is top of mind for New Zealanders every time they visit the supermarket or pay their mortgage. We have provided significant support to households and businesses through programmes such as the fuel excise duty cut and half price public transport. We are committed to continuing to support Kiwis through what will be a difficult year,” Grant Robertson said.

“The Government is also playing its part by being fiscally responsible. Now that the emergency COVID response is behind us we are returning spending to more normal levels. The Treasury is forecasting real Government consumption will fall by 8.2 percent over the next couple of years, which they say indicates that fiscal policy is supporting monetary policy in dampening inflationary pressures.

Core Crown tax revenue was $78 million above forecast at $45.4 billion, due to higher-than-expected corporate tax offsetting lower GST returns.

Core Crown expenses were $742 million above forecast at $51.7 billion, due to higher interest costs and more health spending, including funding being provided to Health New Zealand/Te Whatu Ora earlier than anticipated.

Net debt was 19.2 percent of GDP, which was below the forecast of 20.3 percent of GDP due to better-than-expected market conditions affecting the New Zealand Super Fund’s financial portfolio.

“These are tough times for many people. New Zealand is in a strong starting position to face the deteriorating global economy, with low unemployment, growing exports, a rebound in tourist numbers and more people arriving to live and work in New Zealand long term than leaving, helping ease worker shortages. Our economic plan is working for Kiwis,” Grant Robertson said.

“Our debt levels are among the lowest in the OECD and well below the Government’s debt ceiling of 30 percent, ensuring we are well positioned to weather further economic shocks.

“We are taking a balanced approach that has worked for New Zealand through the pandemic and the economic aftermath that we are still experiencing. We are focused on prioritising our spending without adding to inflation pressures and returning to surplus in 2024/25, which would be a year earlier than the National Government did after the Global Financial Crisis,” Grant Robertson said.

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