But risks to the financial position remain with taxation revenue continuing to fall and expenses rising.
Some of the growth in expenses is because of policy introduced in the 2008 Budget by the previous Labour-led government.
Treasury yesterday released figures showing the super fund investments grew by $800 million, ACC by $500 million and the commission by $200 million.
Those improved returns helped the operating balance come in at $1.1 billion ahead of forecast.
However, tax revenue fell nearly $2 billion to $44.7 billion in April from the previous corresponding period (pcp).
Total Crown revenue was down $2.1 billion at $48.8 billion.
Treasury said the decrease was primarily in corporate and other individuals' tax and was partly offset by increases in GST and source deductions.
The fall in both corporate and other individuals' tax was because of the 2008 tax cuts, one less provisional tax due date during the period, declining profits and falling terminal tax assessments.
Growth in source deductions was driven by continued strong wage growth, although overall growth in those deductions had fallen considerably following the October 1 tax cuts.
Total core Crown expenses rose by $4.2 billion (9%) on the corresponding period last year.
The significant movements were social security and welfare rising $1.1 billion (indexation of welfare benefits), health up $800 million (2008 Budget), education up $800 million (higher demand-driven expenses from roll growth), core government services up $400 million, economic and industrial services up $300 million (KiwiSaver) and other expenses up $800 million (mainly because of policy from the 2008 Budget).
The operating balance excluding gains and losses amounted to a deficit of $1.8 billion compared with a $6 billion surplus in the pcp, a $7.86 billion turnaround.
After excluding the gains and losses, the operating balance was a deficit of $7.7 billion, compared with a $3 billion surplus last year.
Fitch Ratings agency yesterday said New Zealand's huge current account deficit posed a major concern and was a weak spot despite healthy public finances.
A team of Fitch analysts are in New Zealand reviewing the country's AA-plus rating and stable outlook in the wake of the Government's Budget released last week.
"For us, public finances in New Zealand have been a substantial strength. We don't rate New Zealand a triple A, but public finances in our opinion are triple A," Fitch Ratings sovereign credit head David Riley told Radio New Zealand.
"The concern we have about New Zealand is the level of AA-plus-rated Ireland, where the Government has had to bail-out banks."
New Zealand won a reprieve from Standard and Poor's last week after moving to contain its budget deficit - partly by scrapping tax cuts and partly by suspending borrowing to fund future superannuation.
S&P's, which warned earlier this year it could downgrade New Zealand, revised the outlook on its AA-plus rating to stable from negative.
Moody's Investors Service also reaffirmed its ratings outlook as stable.
Mr Riley said New Zealand would need a weaker currency to help narrow its huge current account deficit, but the recent rise in the currency could make the process harder.
The New Zealand dollar has risen about 30% since it touched a six-year low in early March, partly because of a broad US dollar weakness.
Treasury secretary John Whitehead said that deterioration in the Crown fiscal position was hard enough to address on its own, but it also created other risks and pressures.
"New Zealand's large current account deficit and high external indebtedness mean we are very exposed to further global financial shocks.
"Notwithstanding last week's Budget, international investors and credit rating agencies will continue to keep a watchful eye on us, and we need to maintain New Zealand's rating and market credibility if we are to avoid significantly higher credit costs or lower investment."
