Budget to rein in deficit, set path to surplus
The Budget next week will set a credible path back to budget surplus, after Government financial statements today
confirmed a $10.2 billion operating deficit before gains and losses for the nine months to 31 March, Finance Minister
Bill English says.
The deficit includes the Earthquake Commission's $1.5 billion estimated share of costs for the February earthquake in
Christchurch. However, it does not include the Government's support package for AMI policyholders, which was signed
after 31 March.
"Compared to the December forecasts, the accounts for March were broadly in line with February's results," Mr English
says.
"The Budget next week will confirm a very large deficit for the current year, including the immediate costs of
rebuilding Christchurch.
"But it will also confirm significant improvements in the fiscal position over the next few years, before we return to
surplus and start repaying debt To achieve that, the Government has completed a careful and balanced review of its
spending priorities, which we will outline in the Budget.
"It's essential that the Government gets its own finances in order as quickly as possible, so it can join households and
businesses in lifting national savings and reducing New Zealand's vulnerability to foreign lenders."
The Government's accounts for the nine months to March show the $10.2 billion operating deficit before gains and losses
compared with an $8.9 billion deficit forecast in the Half Year Update in December. EQC's costs for the February
earthquake accounted for most of the difference.
At $3.3 billion, the operating deficit included gains and losses was $3.8 billion better than forecast, mainly
reflecting gains from share investments by the New Zealand Super Fund and ACC, along with actuarial gains on ACC and
Government Super Fund liabilities.
The cash deficit was close to forecast at $12.4 billion for the nine months.