The Government remains on track to return its accounts to
surplus by 2015 and Finance Minister Bill English says the
result for the year ended June was considerably better than
In the year ended June, the Government's operating balance,
excluding gains and losses (obegal) was a deficit of $4.4
billion, down from the $6.3 billion deficit forecast in the
Budget this year and the $7.9 billion deficit forecast in
The obegal has more than halved from the $9.2 billion deficit
reported in June last year and is substantially down on the
$18.4 billion deficit reported in June 2011.
The operating balance, which includes the substantial
investment gains made by the New Zealand Superannuation Fund,
ACC and the Government Superannuation Fund, recorded a
surplus of nearly $7 billion, well ahead of the $1.8 billion
forecast in May.
The NZ super fund recorded a gain on investments of $4.4
billion and ACC recorded a $1.8 billion gain.
Mr English said the Government had consistently examined how
public services were delivered, allowing it to reduce costs.
''The annual accounts confirm we are making good progress in
putting the Government's finances on a stronger footing and
in getting back to surplus.''
However, Labour Party finance spokesman David Parker said the
Government was creating a two-speed economy that was hurting
too many New Zealanders.
Property speculators were creaming huge profits while the
door was slammed shut on the home-ownership dreams of
thousands of first-home buyers.
''We see speculator industries succeed while manufacturers
and exporters lay off workers.''
The two-speed economy was also one where neglected regions
haemorrhaged jobs and skilled people because the Government's
eye was only on Auckland voters and the Christchurch rebuild,
Mr Parker said.
Despite the progress being made, Mr English warned there was
no room for complacency.
In the past financial year, the Government was still
borrowing a net $110 million a week, compared to nearly $260
million a week in 2010-11.
Once surplus was reached, the Government had choices about
reducing debt and investing more in priority public services
The consequences of too much government debt were clear in
Europe and the United States, where public services and
pensions had been cut and higher taxes implemented, he said.
Treasury's Budget 2013 forecasts showed net core Crown debt
was expected to increase from $10.3 billion in June 2008 to
more than $70 billion by June 2017.
Mr English said an active approach to managing the
Government's finances needed to continue to get debt below
20% of GDP by 2020.
In the year to June, core Crown tax revenue increased by $3.6
billion to $58.7 billion, driven by higher incomes and
consumption. Core Crown expenses increased by $1.2 billion to
$70.3 billion, in large part due to costs around student
Expenses were about $3.4 billion below Budget 2012 forecasts,
partly as a result of lower-than-forecast Canterbury
The Crown accounts showed the Government received $1.685
billion from the sale of 48.2% of Mighty River Power.
After the cost of sales ($22 million) and the estimated cost
of the bonus share issue were deducted, the net proceeds from
the sale were $1.638 billion.
When the proceeds were compared to the interest in the net
assets sold, the Crown made a gain on the partial sale of