6 Jun 2014

Govt deficit lower than expected

2:06 pm on 6 June 2014

The Government's finances are doing better than expected due to underspending by departments.

Lastest figures, for the 10 months to April, show an operating deficit of $1.4 billion after stripping out investment gains and losses - 10 percent better than the Treasury forecast in May's Budget.

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Photo: PHOTO NZ

Expenses came in $90 million below forecast due to underspending by departments.

That more than offset a lower tax take, which the Treasury says is due to a reduction in GST returns, though it puts that down to timing issues.

The Government's economic advisor points out the tax take of $50.5 billion is still 5 percent higher than the same period a year ago, reflecting a stronger economy.

Finance Minister Bill English said the Government's books remained on target to make a modest $372 million next year.

If investment gains and losses are included, the Crown recorded a better-than-expected surplus of $3.8 billion.