Finance Minister Bill English continues to ignore the good news buried within the Government accounts prepared by Treasury.
The latest accounts for the 10 months ended April were released yesterday and an analysis of the figures provided a different picture than the one painted by the Finance Minister.
In a statement, Mr English said the Government's "careful management" of its expenses would be even more critical in the coming year as it looked to live within its constrained budget.
Commenting on the Government accounts for the period ending April 30, Mr English said the ongoing dedication to "responsible" cost management was particularly important with company tax revenue coming in $108 million below Budget forecasts for the 10-month period.
However, as has become his way, Mr English focused on the bad news in the Government accounts while failing to highlight any of the good news that was included well through the 37-page document.
While the Finance Minister was correct with talking about the drop in company tax, it was nearly offset by the increase in other individuals' tax which was $106 million (4.7%) higher that forecast.
Company tax was less than 2% below forecast and given Treasury's margin for error, it could be considered well in the realms of a reasonable forecast.
Also in the period, core Crown expenses were $416 million lower than forecasts and there had been savings on social assistance benefits and ACC expenses in the period.
Social assistance benefits were $105 million lower than forecast, mainly due to family tax credits being $36 million lower than forecast.
With individuals' tax moving up $106 million and social assistance falling by $105 million, suggestions that the employment market is improving could be proving true.
The New Zealand Superannuation Fund tax receipts were $85 million higher than forecast, primarily due to higher than forecast investment returns.
ACC insurance expenses were $137 million lower than expected, due to lower-than-expected claims costs.
The 10-month accounts showed the operating balance before gains and losses (obegal) was a deficit of $5.2 billion, compared with a forecast deficit of $5.8 billion.
The operating balance was a deficit of $1.4 billion compared with a forecast of $2.2 billion.
When the annual figures were compared, the obegal was a deficit of $5.2 billion for the year ended April compared with a deficit of $1.8 billion in April 2009.
However, the operating balance showed the benefits of cost cutting and better investment markets coming in at a deficit of $1.4 billion compared with a deficit of $7.7 billion last year - about a $6.3 billion turnaround.
The obegal has been the favourite measure of the Government accounts for finance ministers although former Labour finance minister Michael Cullen switched to the operating balance when it suited.
If Mr English decided to switch his attention to the operating balance, then some room for manoeuvering would be possible.
Mr English said Budget forecasts last month pointed to the economy picking up over the next year which was encouraging for job seekers and businesses looking for opportunities to get ahead.
"But those forecasts also showed that the Government's finances will not return to surplus until 2015-16. That is based on the Government continuing to live within its $1.1 billion annual allowance for extra operating spending and weeding out lower priority spending for high-priority front-line public services.
"I want us to return to surplus as quickly as possible, because as long as we remain in deficit, Crown debt will continue to increase and leave us vulnerable in what remain volatile global financial markets," he said.
But it would be no surprise if around this time next year, the operating balance does move into positive territory - just in time for National to launch its election campaign on a platform of sound fiscal management. dene.mackenzie@odt.co.nz
