The Government's financial position continues to improve, although Crown gross debt remains stubbornly high, the Treasury figures released yesterday show.
The operating balance before gains and losses (obegal) - the key indicator as Finance Minister Bill English aims to get the country back into surplus by 2015 - was in deficit by just under $4 billion in the 10 months ended April.
The figure was $663 million lower than the forecast finalised just before the May Budget.
The operating balance, which takes into account such things as investment returns, was $2.8 billion, $142 million below forecast.
In addition to the $664 million lower obegal deficit, there was a $759 million improvement in the Crown's investment portfolios, the New Zealand Superannuation fund recording gains of $737 million above forecast.
Looking at the annual comparisons, the obegal of just below $4 billion compared with one of just below $6 billion in April last year, a 32.9% improvement.
The operating balance of $2.8 billion compared with a nearly $9 billion deficit last year.
Core Crown revenue was $52.7 billion this year, compared with $49.3 billion in April last year.
However, net debt, which excluded the NZ super fund, student loans and other advances, grew 15.4% in the year to $60 billion from $52 billion. Net debt is 29.7% of GDP, compared with the 28.9% forecast before May's Budget.
Gross debt has risen to nearly $80 billion and is now 38.1% of GDP. A year ago, gross debt was $78 billion.
The Treasury said the higher debt was mostly because of the Reserve Bank's financial liabilities being higher than forecast at $763 million as part of its normal liquidity management activities.
Treasury chief financial officer Fergus Welsh did not this month talk about a readjustment of the labour market as he discussed higher tax receipts. In the past two months, he talked about the composition of the labour force changing through a decrease in the proportion of low-income workers.
Tax receipts were $258 million, or 0.6%, higher than forecast, GST and other direct taxes being higher than forecast at $112 million and $111 million respectively.
There were lower-than-expected operating payments because of cash underspends, the largest - of $155 million - by the Ministry of Education.
BNZ senior economist Craig Ebert said much of April's result reflected higher-than-expected corporate tax. That was partly to do with the well-performing equity markets over recent times, which had boosted the returns of fund managers and others.
The much-higher-than-anticipated corporate tax was also partly a timing issue, according to the Treasury, relating to earlier filings of the increasingly important private sector ''tax poolers'', he said.
''These guys help manage the tax, timing and liquidity obligations of New Zealand businesses in a cost-effective manner, while satisfying the IRD on the other side of the arrangement.
''The IRD is happy to devolve this quasi-banking function to the private sector as the cost savings outweigh any penalty interest it charged on late tax payments.''
Tax poolers tended to report in the June quarter, for the calendar year just gone, but seemed more bunched in April this year, Mr Ebert said.
But even with the timing and financial market fillips, there was clearly a positive trend in corporate tax. That implied corporate profitability had improved noticeably over recent years, he said.
Mr English said a stronger economy was underpinning tax revenue. That, combined with spending control, kept the deficit below $4 billion in the period.
''A number of indicators confirm that New Zealanders can look to the future with some well-earned confidence and optimism. The economy is growing more strongly, new jobs are being created, unemployment is coming down and business and consumer confidence has picked up.
''The Government is supporting these positive trends with a common-sense economic programme focused on giving businesses the confidence to invest, grow and create new jobs.''
The plan was working and the benefits were starting to show in the Government's finances, Mr English said.
He forecast that net debt would be reduced to no more than 20% of GDP by 2020.
Neither Labour nor the Greens commented on the latest accounts.
