The latest Crown accounts, posted by Treasury, showed the superannuation fund made a $1.2 billion gain in the 11 months to May.
"Today's figures show the super fund is on the road to recovery and making sizeable gains on its assets.
The decision by National to cut contributions to the fund was short-sighted and puts the super of future generations at real risk."
Treasury figures showed that the volatility of the world financial markets did contribute to a better-than-expected improvement in New Zealand's operating deficit, which was $7.16 billion, or 14% below the forecast made in May's budget of a deficit of $8.33 billion.
The super fund made a gain of $1.2 billion and ACC reported a gain of $500 million in the period.
Corporate tax was $400 million lower than forecast, mainly due to lower-than-forecast provisional tax payments.
That indicated business profitability in the current year was weaker than expected, Treasury deputy secretary Peter Bushnell said.
The operating balance, excluding gains and losses, came in 26% better than forecast at $1.2 billion, but Finance Minister Bill English warned people not to read too much into the figures.
"We are facing large structural deficits that are forecast to continue for the next 10 years. It's entirely appropriate that the Government plays its part in helping New Zealanders through the recession."
To do that, the Government was borrowing an extra $30 billion over the next four years to preserve welfare entitlements, invest in productive infrastructure and prepare the economy for recovery, he said.
There would be a need for ongoing restraint on government spending increases to ensure that future taxpayers were not burdened with higher debt.
"It's important that we get back into surpluses in less than 10 years because surpluses give us choices. As long as we are running deficits, we don't have those choices," Mr English said.
Spending on core government services continued to rise in the year.
Education rose the highest in the year ended May, at 9% to $9.74 billion.
Health rose 8.7% to $11.2 billion and social security and welfare rose 7.5% to $17.4 billion.
