NZ government operating deficit smaller than Budget forecast on underspend
By Paul McBeth
June 6 (BusinessDesk) - The government posted a smaller operating deficit than expected in last month's Budget forecast
as an underspend in April offset a lagging GST tax-take.
The Crown's operating balance before gains and losses (obegal) was a deficit of $1.37 billion in the 10 months ended
April 30, smaller than the $1.52 billion shortfall estimated in the May 15 Budget economic and fiscal update, and down
from a deficit of $3.99 billion a year earlier. Core Crown expenses were $90 million below forecast at $57.88 billion
with underspends across a number of departments, the biggest of which was at the Ministry of Business, Innovation and
Employment. The tax-take was $111 million below forecast at $50.23 billion due largely to the timing of goods and
services tax refund assessments, which are expected to reverse in May, though still up 4.8 percent from a year earlier.
Last month Finance Minister Bill English confirmed a return to Budget surplus in 2015 at $372 million, wider than the
$86 million projected in the half year economic and fiscal update, with bigger surpluses projected after that as an
accelerating economy helps bolster the government's books.
The corporate tax take was in line with the May forecast at $7.14 billion accrued in the 10-month period, and was up
from $7.09 billion a year earlier. Income tax was $147 million ahead of forecast at $23.43 billion, up from $22 billion
in 2013, while residential withholding tax was $61 million short of expectations at $1.7 billion, and down from $1.75
billion. GST was $194 million below forecast, though still up from $12.41 billion in 2013.
The Crown's residual cash deficit was $138 million below forecast at $6.51 billion, and lower than the $9.64 billion in
2013, due to a smaller than expected wage bill and capital expenditure.
Net debt was in line with the May forecast at $62.25 billion, or 28.1 percent of gross domestic product, while gross
debt was $83.04 billion, or 27.5 percent of GDP.
The operating balance, which includes movements in the Crown's investment portfolio, was a surplus of $3.81 billion,
$252 million ahead of forecast, and up from $2.81 billion a year earlier, with strong equity markets underpinning
unrealised gains in the value of the New Zealand Superannuation Fund.
(BusinessDesk)