Incremental improvement in Crown finances

The Government’s finances showed some incremental improvement in the six months to December 31, due to a number of factors – including some one-off gains, Finance Minister Bill English says.

However, the longer-term challenge of getting the Government’s books in shape remains as substantial as ever.

“As I’ve been saying for more than a year now, the combination of responsible fiscal and economic management over the next few years is the only way we can get on top of this challenge.

“We’ve made it clear that the Budget on May 20 will provide most government agencies with no new money, because we’re already borrowing $240 million a week and we simply don’t have it available.

“At the same time, we need to increase our economic growth, so families can get ahead. It’s simply unacceptable that the economy grew by a meagre 0.9 per cent a year in the three years to 2008, when the rest of the world was virtually booming.”

The financial statements issued today show the operating deficit before gains and losses, at $3.7 billion in the six months to December 31, was $800 million better than forecast.

This reflected a combination of slightly higher tax revenue and lower expenses.

The accounts included $300 million in extra revenue from Inland Revenue’s settlement with banks late last year over their structured finance transactions. Some $1.4 billion had already been recognised in the accounts, and the extra $300 million reflects the net balance of this settlement.


ENDS

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