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Finance Minister Bill English was positively exuberant yesterday about the Crown's financial accounts, compared with other statements he has made over the state of the economy in the past few years.
The operating balance, excluding gains and losses for the five months ended November, came in at $3 billion, $203 million lower than expected.
The reported operating balance was in the black at $706 million, $1.2 billion better than the forecast of a $515 million deficit.
''Compared to the first five months of the previous financial year, we have made good progress in moving towards our target of getting back to surplus by 2014-15,'' Mr English said.
Core Crown tax revenue was $1.1 billion higher for the first five months of the financial year, partly as a result of higher source deductions through wage growth.
At the same time, core expenses were $50 million lower than the previous year as government spending remained relatively flat.
Overall, the results for the first five months of the year were in line with forecasts in the half-year update delivered in December, he said.
''It is important the Government sticks to its programme of responsible fiscal management so we can get back to surplus and start repaying debt. At the same time, we will remain focused on building a more competitive and productive economy that encouraged investment and supported jobs and higher incomes.''
That would be the focus of Budget 2013, Mr English said.
An analysis of the accounts showed financial markets continued to be kind to the Government. Investment gains continued to be made in the period and were $782 million above forecast. The New Zealand Superannuation Fund and ACC investment portfolios year-to-date gains were $207 million and $689 million higher than forecast respectively. For the month of November, the super fund made a $384 million gain and ACC made $169 million.
In addition to the investment gains, ACC recorded an actuarial gain on its liability for outstanding insurance claims that were $228 million above forecast, reflecting a small increase in the discount rate.
Social security and welfare continue to dominate the Government's spending with more than $9.4 billion spent in the five months ended November, up 2.8% on the previous corresponding period.
Health spending was up 2.3% to nearly $6 billion.
Spending on environmental protection fell to $184 million in the period from $500 million in the pcp, a fall of 63.2% at the same time as the Department of Conservation was undergoing further restructuring.
Also, spending on housing and community development fell in the period to $155 million, down 11.4% from $175 million in the pcp.
New Housing Minister Nick Smith was appointed by Prime Minister John Key this week to try and wrest some of the initiative on affordable housing away from Labour and the Green Party.
At a glance
• Revenue: $24.7 billion
• Expenses: $28.8 billion
• Obegal: ($3 billion)
• Operating balance: $708 million
• Cash balance: ($5.9 billion)