The pressure is mounting on Finance Minister Bill English to
meet his deadline of returning the government accounts to
surplus in the 2014-15 financial year.
While the accounts are well ahead of the corresponding time
last year, the operating balance before gains and losses
(obegal) for the six months ended December was $380 million
higher than forecast at a deficit of $1.78 billion. At the
corresponding time last year, the obegal was a deficit of
The operating balance of $3.2 billion was double the $1.6
billion forecast. At the corresponding time last year, the
operating balance was $1.7 billion.
Treasury chief financial officer Fergus Welsh said the
deficit of nearly $1.8 billion was mainly due to lower core
Crown tax revenue across most tax types.
''At this stage, it is difficult to determine how much of the
lower-than-forecast tax is temporary versus permanent but we
expect this to become clearer over the next few months.''
Following on the trend in recent months, continued strength
in equity markets resulted in gains recorded on investments
of $3.1 billion, $1.8 billion ahead of forecast.
Net debt was $392 million higher than forecast at $62.3
billion, or 28.8% of gross domestic product (GDP), he said.
Higher debt was mainly due to a higher-than-forecast residual
cash deficit driven by lower core Crown tax receipts and
higher operating payments.
At December 31, total Crown assets were $248 billion and
liabilities were $173.1 billion. The Crown's net worth
strengthened to $70.5 billion.
Mr English said in a statement government spending remained
under control and revenue remained ''somewhat below''
''Given the large size of both the revenue and spending
bases, overall we are still tracking reasonably close to
forecast for the first six months of the financial year.
''We remain on track to surplus in 2014-15. As we've said
many times, this will require ongoing discipline and
responsible fiscal and economic management.''
Picking up the theme of election year, Mr English said New
Zealand did not need irresponsible and expensive spending
promises such as were being seen from other political parties
more than a year before a surplus had been posted.
Social security and welfare, health and education remained
the top three spends for the Government. Social security and
welfare payments rose 2.3% in the period to $11.6 billion,
health payments rose 1.4% to $7.3 billion and education rose
2.1% to nearly $6 billion.