Govt operating balance better than forecast

Friday 3rd July 2009

The New Zealand government's operating balance was better-than-forecast in the 11 months through May, helped by investment gains by the NZS Fund and Accident Compensation Corp.

The operating deficit was $7.16 billion in the period to May 31, smaller than the $8.33 deficit predicted in the May budget, according to a release from the Treasury today. The NZS Fund had higher-than-expected investment gains of $1.2 billion while ACC’s was $500 million in April and May. Their funds remain in a loss position for the year to date.

The investment gains offset a $700 million loss in value of financial assets and liabilities held by the Reserve Bank and Debt Management Office, the report said.

Tax revenue was in line with forecasts though company tax receipts were $400 million lower than expected, as provisional tax payments were dented by sinking corporate earnings.

The operating balance before gains and losses, or OBEGAL, was a deficit of $1.2 billion, less than the NZ$1.6 billion forecast.

Net government debt was $15.69 billion, or $547 million higher than forecast, amounting to 8.7% of gross domestic product, against a forecast of 8.4%.

Core Crown residual cash was in deficit at $7.13 billion, versus a forecast deficit of $8.18 billion.

Businesswire.co.nz

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