Finance Minister Bill English was positively exuberant
yesterday about the Crown's financial accounts, compared with
other statements he has made over the state of the economy in
the past few years.
The operating balance, excluding gains and losses for the
five months ended November, came in at $3 billion, $203
million lower than expected.
The reported operating balance was in the black at $706
million, $1.2 billion better than the forecast of a $515
''Compared to the first five months of the previous financial
year, we have made good progress in moving towards our target
of getting back to surplus by 2014-15,'' Mr English said.
Core Crown tax revenue was $1.1 billion higher for the first
five months of the financial year, partly as a result of
higher source deductions through wage growth.
At the same time, core expenses were $50 million lower than
the previous year as government spending remained relatively
Overall, the results for the first five months of the year
were in line with forecasts in the half-year update delivered
in December, he said.
''It is important the Government sticks to its programme of
responsible fiscal management so we can get back to surplus
and start repaying debt. At the same time, we will remain
focused on building a more competitive and productive economy
that encouraged investment and supported jobs and higher
That would be the focus of Budget 2013, Mr English said.
An analysis of the accounts showed financial markets
continued to be kind to the Government. Investment gains
continued to be made in the period and were $782 million
above forecast. The New Zealand Superannuation Fund and ACC
investment portfolios year-to-date gains were $207 million
and $689 million higher than forecast respectively. For the
month of November, the super fund made a $384 million gain
and ACC made $169 million.
In addition to the investment gains, ACC recorded an
actuarial gain on its liability for outstanding insurance
claims that were $228 million above forecast, reflecting a
small increase in the discount rate.
Social security and welfare continue to dominate the
Government's spending with more than $9.4 billion spent in
the five months ended November, up 2.8% on the previous
Health spending was up 2.3% to nearly $6 billion.
Spending on environmental protection fell to $184 million in
the period from $500 million in the pcp, a fall of 63.2% at
the same time as the Department of Conservation was
undergoing further restructuring.
Also, spending on housing and community development fell in
the period to $155 million, down 11.4% from $175 million in
New Housing Minister Nick Smith was appointed by Prime
Minister John Key this week to try and wrest some of the
initiative on affordable housing away from Labour and the
At a glance
• Revenue: $24.7 billion
• Expenses: $28.8 billion
• Obegal: ($3 billion)
• Operating balance: $708 million
• Cash balance: ($5.9 billion)