5 Jul 2013

Govt operating deficit lower than forecast

2:54 pm on 5 July 2013

The Government's operating deficit for the 11 months to the end of May was $763 million lower than forecast. The deficit, excluding investment gains and losses, was $3.3 billion.

The Treasury said on Friday that the result was largely due to more tax income than expected.

Once investment gains are included, the Government's books look in even better shape.

Investment returns were $1.7 billion above forecast. That took the operating balance to $6.48 billion, nearly 60% higher than forecast.

The sale of shares in state-owned Mighty River Power are included in the latest statements and the Treasury said the sale price of $1.7 billion was higher than the amount included in earlier forecasts.

Finance Minister Bill English said the latest financial statements confirm that the Government is on track to get back into surplus in 2014-15. He said tax income is up and the improving economy suggests that will last.

Mr English said because the Government will continue to limit spending over the next few years, the pick-up in the tax revenue will help it to balance the books.