The Government's deficit for the first quarter of the 2011-12 financial year was NZ$2.5 billion, which is NZ$210 million worse than expected, Treasury says, due to lower tax revenue than forecast.
Treasury released the Government's financial statements for the three months to September 30, 2011 today.
The operating balance before gains and losses (OBEGAL) was a deficit of NZ$2.5 billion. Compared with monthly forecast tracks based on the 2011 Pre-election Economic and Fiscal Update (PREFU), which was published on October 25, over the quarter this deficit was NZ$210 million greater than expected.
"The key driver of this difference was core Crown tax revenue, which at NZ$13 billion was NZ$301 million (2.3%) lower than forecast," Treasury said.
The main variances were:
GST revenue was NZ$154 million (4.2%) below forecast;
Other individuals’ tax was NZ$85 million (13.2%) below forecast; and
Corporate tax was NZ$63 million (3.2%) below forecast.
Treasury noted that monthly flows of tax revenue can be quite volatile and said with only one month of new data since completing the PREFU forecasts it's likely the volatility will reduce in coming months.
"For example, since completing the PREFU forecasts there have been a range of corporate profit announcements, both positive and negative," Treasury said.
It said the operating balance deficit was close to forecast at NZ$7 billion. This included forecast losses on the valuation of long-term liabilities of the Government Superannuation Fund and Accident Compensation Corporation - NZ$1.9 billion - and losses on investment portfolios of NZ$2.7 billion.
"We have forecast for these investment losses to reverse during the year but returns on global equity markets are currently volatile."
12 Comments
"likely the volatility will reduce"....this gift of spin was 'written' up some time ago before Mr Market decided the game was up in Europe.
In fact the volatility will likely increase..as it has since the above comment was written...leading to further reductions in tax take on paye and gst and profits.
The fact is...gst is killing activity....govt needs to slash state costs...cut gst on all building sector and labour components involved in building and renovation work. Cut it to 10% and do it before the election.
We cannot carry on with state bosses sucking down half million dollar salaries and that is just one of many examples of the waste and stupidity in the state sector.
"We have forecast for these investment losses to reverse during the year but returns on global equity markets are currently volatile."
Is this 'egg on face' time for TSY?
It is time someone asked Key, Goff and all the party leaders whether they really, honestly, believe TSY's forecasts. All the political parties have been making spending promises based on TSY forecasts that are so overly optimistic that their veracity doesn't hold up after just one month.
Nearly egg on face time. Wait 'till the dow cracks below 9k, watching this market suddenly ignore all rumors, and completely rout is hilarous (not for those who are long paper, it's pretty sad really).
In reality, they can forcast whatever the hell they want, the sheep will believe them, and there is no downside to being wrong. Who would vote for someone who was quoting the IMF saying "dangerous times ahead."
Wolly you are going soft. What about this:
1 GST at 8% on all goods and services (including food, interest, rents). No special favours for the banking sector.
2 State Sector pay targets - maximum 8 times median pay. (Okay this is a bit wooly I know but some hard hitting measures are needed).
3 No deduction of interest as expense, not for anyone or anything.
4 100% deprececiation on day one for all capital items.
5 Radical rewrite of planning laws - automatic rezoning if economic benefit outweighs environmental cost. $30 000 sections.
6 Ratepayers have some sort of option to not pay rates if they think the local council are profligate (ie if they build stadia but block rezoning or mining). There is no effective feedback system here.
Yes it messes up my carefully laid plans too, like everyone else they are based on the present daft system.
You want the whole shooting match RW...you know just getting one simple step in the right direction will be 'pulling teeth' without the needle.
They will first destroy with their idiocy before they claim it's the fault of others and then demand support to put right the mess.
When an economy is failing !
Yes PM – we keep 51% ownership – dream on !
A German trading and services company has agreed to buy Kiwi fruit and veg marketer Turners & Growers for $137 million creating one of the world's leading suppliers of fruit.
http://www.stuff.co.nz/business/5942103/137m-Turners-and-Growers-takeover-bid
When an economy is failing !
..because our government doesn’t have a clue about manufacturing/ production.
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10765066
PM – where are the 170’000 new jobs coming from, when you are constantly importing things in the billions ?
PM – in what industries are Kiwis, particularly, NZyouths going to be employed, when your government constantly taking away interesting, skilful jobs to overseas workforces ?
PM – why do we have in this country youth education programs costing taxpayers money millions, when there are no decent jobs and our youngsters are forced to move overseas ?
PM – how can we have a solid, more complex, better coordinated production sector, covering our needs, when you import them in the billions ?
When an economy is failing !
...because a government has megalomaniac spending plans not adapting to the world situation, but pushing the NZpublic and later the state into insolvency.
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