Heat on Govt's figures

The Government's economic credibility goes on the line this morning when the Treasury issues its pre-election fiscal update and the much anticipated return to surplus becomes election fodder.

The Treasury updates can be notoriously inaccurate and even forecasts issued with the May Budget out of date consistently on tax data.

Also, by the time the figures for the 11 months ended May were released last month, the forecasts were, in some cases, well off the mark.

The operating balance before gains and losses (obegal) was in deficit by $1.1 billion for the 11 months ended May, $332 million more than expected.

Core Crown expenses of $64.2 billion were 0.1% less than forecast and core Crown tax revenue of $56.5 billion was 0.8% less than forecast.

The operating balance (including gains and losses) was in surplus by $4.3 billion.

Continued strength in equity markets saws gains recorded on financial investments of $4.8 billion, which was $1.4 billion ahead of forecast.

Finance Minister Bill English will be hoping the figures for the end of June confirm the wafer-thin surplus of $372 million forecast in May's Budget is still included in the figures released today.

The surplus is within a margin of error.

Labour finance spokesman David Parker said there were clear signs the so-called ''rock star economy'' had fallen off the stage, with plummeting prices for raw commodity exports.

New Zealand had become ever more reliant on raw commodities such as milk and logs while non-primary manufacturing exports and other industries struggled.

Overall exports had fallen from 33% of gross domestic product (GDP) to 29% of GDP under National, a far cry from the promise of increasing exports to 40% of GDP, he said.

''Analysts will be checking Treasury forecasts to see how much further exports are now predicted to fall,'' Mr Parker said.

The Treasury is likely to revise down the expectations for economic growth which underpinned the Budget.

The Green Party has commissioned Business and Economic Research Ltd (Berl) to analyse parts of the May Budget.

Berl chief economist Ganesh Nana, Council of Trade Unions economist Bill Rosenberg and Green co-leader Russel Norman release the findings of the report today, before the release of the Treasury pre-election update at 10am.

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