Lower corporate tax and GST received
in the five months ended November took some shine off the
Government accounts, although the figures released yesterday
by Treasury are still well ahead of the previous
Treasury chief financial officer Fergus Welsh said the the
operating balance excluding gains and losses (obegal) was in
deficit by $2.3 billion in the five months ending November,
about $400 million more than expected.
''At this stage, our assessment is the majority of this
variance in core Crown tax revenue is timing in nature and
will reverse out in coming months.''
The accounts showed corporate tax was $259 million, or 8.3%,
below forecast. About a third of the variance related to a
few large taxpayers revising down their current-year
provisional tax assessment. Most of the rest was likely to be
to do with timing as a few large taxpayers had been expected
to have filed provisional tax assessments but had not yet
done so, Mr Welsh said.
GST was $174 million, 2.7% below forecast, with around $50
million relating to earthquake refunds.
''At this stage, it is unclear whether the rest of the
variance is due to timing or underlying weakness,'' Mr Welsh
Continued strength in equity markets saw gains recorded on
financial investments of $2.8 billion, $2 billion ahead of
forecast. As a result, the operating balance was $1.6 billion
higher than forecast at $2.3 billion.
Finance Minister Bill English said the accounts reinforced
the need for discipline.
''We remain on track to surplus in 2014-15 but, as we have
said many times before, this remains quite a challenge.
''In particular, we need to remain focused and disciplined
and now is certainly not the time to get loose with spending
and fiscal policy - as some political parties are
Labour finance spokesman David Party said National's
much-hyped ''rock-star'' economy appeared to have hit a blip.
''Corporate tax revenue is less than forecast, meaning
companies aren't making as much money as expected. That means
the economy isn't going as well as [Prime Minister] John Key
and Bill English like to trumpet.''