NZ operating deficit in 1st-qtr worse-than-forecast

Thursday 10th November 2011 1 Comment

New Zealand’s operating deficit was bigger than expected in the first three months of the fiscal year, on below-forecast tax revenue.

The operating balance before gains and losses deficit was $210 million more than expected at $2.5 billion in the three months ended Sept. 30, according to the Treasury.

The operating deficit was about $7 billion, close to the department’s forecast and reflecting losses on the value of the Government Superannuation Fund and Accident Compensation Corp. of $1.9 billion and losses on investments of $2.7 billion.

"While the deficit is tracking towards the forecast $10.8 billion for the year to 30 June, 2012 – down from $18 billion last year – this is still too high for comfort, especially in the face of ongoing global economic uncertainty," said Finance Minister Bill English.

The Treasury said losses on investments are expected to reverse during the year though global equity markets are volatile.

Core tax revenue was $301 million, or 2.3 percent below forecast, at $13 billion though the Treasury noted the tax revenue data flows tend to be volatile.

Core government expenses were $115 million less than forecast at $17.3 billion.

BusinessDesk.co.nz

Comments from our readers

On 11 November 2011 at 12:17 pm howie said:

spending $200 million a week more than we earn, not the way to go.