Hon Grant Robertson

Minister of Finance

The Government’s books are in good shape to meet the challenges ahead and support New Zealanders facing cost of living pressures and extreme weather events.

For the six months to the end of December, the Operating Balance before Gains and Losses (OBEGAL) recorded a deficit of $2.8 billion, $39 million above that forecast at the Half Year Economic and Fiscal Update in December 2022 and $5.2 billion lower than for the same period a year ago. Net debt was slightly above expectations.

“The Government has redoubled its focus on what matters to New Zealanders such as the cost of living, including extending fuel tax reductions and half price public transport fares till the end of June to help take some off the pressure on household budgets and business costs,” Grant Robertson said.

“The extreme weather that New Zealand has experienced recently is putting families and businesses under even more pressure, with some losing their homes and livelihoods. We are committed to continuing to support them through these difficult times.

“New Zealand is in a strong financial position to do so thanks to the Government’s careful and prudent management of the books. The impacts of flooding in Auckland in late January and now Cyclone Gabrielle have yet to be fully known and the Treasury is currently accessing the economic and fiscal impact.

“We know that this is a significant event affecting families and businesses as well as the country’s roads, bridges and energy networks and it will have a sizable impact on the economy. Insurance will cover significant elements of the event, but the Government will need to step up with significant resources to fix broken infrastructure. This will affect the Government’s operating and capital spending plans in the current year and subsequent years and is being factored into planning for the Budget.”

Core Crown tax revenue was $375 million or 0.7 percent below forecast at $54.5 billion, while core Crown expenses were $411 million, or 0.7 percent, above forecast at $60.5 billion.

Net debt was 21.6 percent of GDP, slightly above the forecast of 21.3 percent of GDP.

“New Zealand has shown its resilience through the Covid pandemic due to our strong economic and financial management. Our debt levels are among the lowest in the OECD and well below the Government’s debt ceiling of 30 percent, ensuring we are well positioned to handle the impacts of Cyclone Gabrielle and future economic shocks,” Grant Robertson said.

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