NZ government operating deficit wider than forecast

Wednesday 7th November 2012

The New Zealand government's operating deficit was wider than forecast in the first quarter of the financial year as the Crown took in less tax than expected in a subdued economy.

The operating balance before gains and losses (obegal) was a deficit of $2.1 billion in the three months ended Sept. 30, $449 million, or 27 percent bigger than forecast. Core Crown tax revenue was $13.5 billion, or 2.1 percent lower than expected, the Treasury said.

Source deductions and goods and services tax were $166 million apiece below forecast, reflecting lower-than-expected wage growth and private consumption, it said. Provisional tax was $103 million below forecast.

Core Crown spending was 1.1 percent below forecast at $17.3 billion, with under-spending on welfare, education and finance costs. These were offset by higher-than-expected earthquake expenses.

The operating balance including gains and losses was a surplus of almost $100 million, or $1.2 billion better than expected, reflecting gains from the NZ Superannuation Fund and the Accident Compensation Corp's investment portfolios.

Gross debt amounted to $79.3 billion, or 38.8 percent of gross domestic product. Net debt was $54.9 billion, or 26.9 percent of GDP.

BusinessDesk.co.nz

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