8 Dec 2015

Govt deficit smaller than expected

12:58 pm on 8 December 2015

The Government has recorded a smaller-than-expected budget deficit.

No caption

Photo: 123rf.com

Excluding investment gains and losses, the Treasury said the operating deficit stood at $478 million for the four months to the end of October, compared with the $1.165 billion shortfall that had been forecast.

The department said the result was due to a stronger tax take and a better performance from the ACC.

Tax revenue rose 1.7 percent to $22.1b with source deductions and corporate tax exceeding expectations.

ACC results were $263m higher than expected, mainly due to lower insurance expenses as a result of a decrease in the outstanding claims liability.

Core Crown expenses stood at $24.5b, close to forecast.

The operating balance, which included investment gains and losses, recorded a deficit of $867m, $757m lower than forecast due to volatile global equity markets with hit the New Zealand Superannuation Fund.

Net debt stood at 62.2 billion, or 25.9 percent of gross domestic product.

The government posted a modest surplus in the June financial year for the first time in seven years, though some economists said it was likely the country's finances would fall back into the red, due to the slowing economy and low inflation.

Get the new RNZ app

for ad-free news and current affairs