26 Jan 2016

Govt deficit higher than expected

11:49 am on 26 January 2016

The government has recorded a higher-than-expected budget deficit.

New Zealand Beehive; parliament

The Beehive Photo: RNZ / Alexander Robertson

Excluding investment gains and losses, the Treasury said the operating deficit stood at $1.624 billion for the five months to the end of November, compared with the $1.241b shortfall that had been forecast.

Treasury said the result is due to a weaker tax take from business, and lower interest income.

Core Crown tax revenue was 0.8 percent below forecast at $26.4b, with corporate tax $167 million below forecast, mainly as a result of weaker-than-forecast provisional tax in November, although Treasury said about a quarter of that was timing related.

Source deductions were $110m, or 1 percent, below forecast as a result of a larger-than-forecast seasonal decline in the November month, although this variance is expected to reverse out over the coming months.

Core Crown expenses stood at $30.5b, close to what was forecast.

Net debt stood at $63.5b, or 26 percent of gross domestic product.

After posting a $414m surplus last year - the first in seven years - the Treasury has forecasted a small deficit of $400m in 2016 due to the slowing economy and subdued inflation.

Get the new RNZ app

for ad-free news and current affairs