Treasury has reported the Government recorded a NZ$2.51 billion deficit before gains and losses from investments in the first 7 months of the fiscal year to June 30, largely because of higher than expected tax revenues and lower than expected spending.
The budget was in surplus to the tune of NZ$4.171 bln after reported gains by the New Zealand Superannuation Fund and ACC. This was NZ$4.3 billion ahead of forecast because of NZ$1.5 billion of gains from the NZ Super Fund, NZ$0.5 billion of gains by ACC and NZ$1.4 billion of actuarial gains on ACC's outstanding claims liability.
Core Crown tax revenue was NZ$486 million better than expected, partly due to fewer part time workers and relatively more full time workers on higher wages, and therefore paying higher tax rates. Taxes from investment income was also stronger because of stronger stock markets.
Core Crown spending was NZ$282 million below forecast, largely due to delays in settling Treaty of Waitangi claims.
Net debt of NZ$57.3 billion or 27.5% of GDP was NZ$323 million lower than forecast, while gross debt at 40.3% of GDP was in line with expectations.
Finance Minister Bill English has said this week the government is on track to hit its budget surplus target for 2014/15.
The Government is scheduled to release its 2013 budget on Thursday May 16.
The NZDMO successfully sold NZ$200 million worth of inflation-indexed government bonds at an average interest rate of 1.42% on Thursday. The auction was more than three times subscribed. The NZDMO is borrowing NZ$14 billion in the year to June 30, its programme shows.
Finance Minister Bill English said the government continued to control its spending and remained on track for surplus in 2014/15
“Overall, the results are encouraging, but the Government will remain firmly focused on continuing to manage its finances responsibly so we can return to surplus and start repaying debt,” English said.
“We will also press ahead with our programme to build a more competitive economy and support the business investment needed for growth and jobs.”
(Updated with detail, English's comments and chart below)
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1 Comments
Taxes from investment income was also stronger because of stronger stock markets.
Courtesy of ZH: US Households Have Never Been More Reliant On The Stock Market For Their "Net Worth"
...as of Q4 2012, the US household's net worth has never been more reliant on the stock market, which by implication means: Ben Bernanke and his centrally printing colleagues around the world. Because should the central banks pull the $15 trillion in house of cards props, everyone, and especially those whose net worth is concentrated in marked to fantasy financial assets on margin, will be wiped out.
Stockholm syndrome anyone?
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