Sharechat Logo

NZ govt operating deficit smaller than forecast on improving tax take, delayed expenses

Friday 8th November 2013

Text too small?

The New Zealand government posted a smaller operating deficit than forecast in the May budget in the first three months of the financial year as it reaped a bigger tax take than expected, and didn't have to book expenses as early as it predicted.

The operating balance before gains and losses (obegal) was $1.29 billion in the three months ended Sept. 30, smaller than the $1.67 billion forecast in the Budget economic and fiscal update in May, and down from a shortfall of $2.12 billion a year earlier.

Core Crown tax revenue was 1.1 percent ahead of forecast at $14.36 billion, primarily from a bigger intake of personal tax, while core expenses were 1.4 percent below expectations at $17.52 billion due to delays in earthquake and Treaty of Waitangi spending.

Accrued corporate tax was 4.5 percent short of expectations at $1.69 billion due to provisional tax falling short of forecasts.

"At this stage it is too early to tell whether this month's result was due to profits being weaker than expected or whether it is a timing difference that will reverse out in later months," the Treasury said in analysis accompanying the release.

Last month the government said the 2013 operating deficit was smaller than forecast due to a bigger corporate tax take and cheaper costs stemming from the Canterbury earthquake, and Finance Minister Bill English affirmed his expectation the books will be in black in the 2015 financial year.

The government's operating balance, which includes movements in its investment portfolios and actuarial adjustments, was a surplus of $539 million, ahead of the forecast deficit of $1.16 billion. That was down to investment gains being $800 million more than expected, mainly from the New Zealand Superannuation Fund, and a reduction in long-term Accident Compensation Corp liabilities of $812 million.

The Crown's residual cash deficit of $3.71 billion was ahead of forecast on the bigger tax take, larger dividend receipts, cheaper operating costs and lower capital spending.

Net debt of $60.12 billion, or 28.2 percent of gross domestic product, was below the forecast $60.45 billion, or 28.4 percent of GDP, because of the improved cash position.

 

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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report