Sharechat Logo

NZ operating deficit smaller than predicted

Tuesday 4th June 2013

Text too small?

The New Zealand government reported a smaller operating deficit than predicted in last month's Budget forecasts as improving corporate profitability underpinned a bigger company tax take.

The operating balance before gains and losses (obegal) was a deficit of $3.99 billion in the 10 months ended April 30, smaller than the $4.65 billion shortfall projected in the Budget Economic and Fiscal Update, according to the Crown's latest accounts. Core tax revenue was $486 million ahead of expectations at $48.2 billion in the period, with corporate tax ahead of forecasts. Core expenses were $103 million short of predictions at $57.83 billion, due to a fewer students in demand driven programmes and underspending in the Defence Force.

"Just over half this variance is through to be the result of higher corporate profitability, partly resulting from continued strength in equity markets," Treasury chief financial officer Fergus Welsh said in a statement. "The remainder is a timing difference with some large taxpayers filing returns in April, earlier than expected."

The government is sticking to its pledge to return to budget surplus of $75 million in 2015 by putting on a new spending cap and further delaying contributions to the New Zealand Superannuation Fund.

The Crown reported a smaller operating surplus of $2.81 billion compared to the expected $2.95 billion, saying low interest rates resulted in a lower discount rate being used at the end of April to value the long-term cost of the Accident Compensation Corp's future liabilities.

That led to an $830 million paper-loss in the actuarial valuation of ACC's liabilities, compared to an expected surplus of $686 million. The government's ACC liability was valued at $32.88 billion as at April 30.

Personal income tax accrued was $140 million less than forecast at $22 billion in the 10 month period, and the goods and services tax take was in line with expectations at $12.41 billion.

The government's gross debt of $79.68 billion was ahead of expectations because the Reserve Bank held more financial liabilities than forecast as part of its normal liquidity management activities, but netted out as debt neutral because of the bank's increased holdings of financial assets. The Crown had net debt of $60.06 billion, or 28.7 percent of GDP, as at April 30.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Steel & Tube Fy20 Trading Update
Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020

IRG See IRG research reports