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The Treasury yesterday released the Crown accounts for the year ended June, reporting an operating balance before gains and losses (obegal) of nearly $4.1billion for the period.
The Treasury had forecast a surplus of only $1.6billion in Budget 2017.
The operating balance, including gains and losses from investments held by Crown entities, such as the New Zealand Super Fund and ACC, was a surplus of more than $12billion, compared with a forecast of $9.5billion.Tax revenue was up 8% on 2016 at $75.6billion. The Treasury said all tax revenue types increased in the period. PAYE revenue, corporate tax revenue and goods and services tax were particularly strong, making up 84.2% of the year-on-year change.
As a share of the economy, core Crown tax revenue was 28.2% of GDP, up 0.4% from last year.
Initial coalition talks between NZ First and National and NZ First and Labour began yesterday.
In what could be his last statement as Finance Minister, Steven Joyce said the Government had achieved its third fiscal surplus in a row.
Next month, when the Crown accounts are released, New Zealand may have a new finance minister.
Mr Joyce said the 2017 accounts were a direct demonstration of the hard work of New Zealanders since the global financial crisis and the benefit of a strong economic plan delivering consistent growth.
The final obegal result for the year was $363million better than forecast by the Treasury at the time of the pre-election fiscal update and largely due to core Crown expenditure being $502million less than forecast.
"This better result should be seen as a one-off. The Treasury advises much of this expenditure reduction reflects timing differences and is likely to reverse out in the years ahead."
Net debt had reduced in nominal terms by $2.4billion from last year to $59.5billion. Net debt had dropped to 22.2% of GDP, Mr Joyce said.
The full-year result should be interpreted with caution and not seen as automatically flowing through into higher surpluses than forecast in years ahead.The Treasury had based its forecasts on current economic settings and some "reasonably solid" growth predictions for the years ahead, he said.
Several commentators had noted a softening of growth indicators in recent days.
In a final plug to remain as finance minister if NZ First goes into an agreement to keep National in power, Mr Joyce said future surpluses would be needed to meet the cost of the investments the National-led government had committed to as part of the next four Budgets, including its $32.5billion infrastructure programme.
Included in the accounts was an update on costs associated with the Kaikoura earthquakes. EQC estimated claims would cost nearly $600million and another $200million recognised so far on the rail and transport link. Additional expenditure was expected in the current financial year as work on the transport infrastructure continued.
The New Zealand Super Fund recorded investment gains of $5.5billion in the year, reflecting rising global markets.
At a glance
• Surplus of $4.lbillion, ahead of forecast $1.6billion
• Tax revenue up 8% to $75.6billion
• Finance Minister Steven Joyce plays down the increased surplus
• Net debt falls to 22.2% of GDP