Red ink for Government accounts

VERNON SMALL
Last updated 10:37 24/01/2014

Relevant offers

Industries

Durex owner Reckitt Benckiser barred from buying Johnson & Johnson’s K-Y Sprawling Matamata animal safari for sale Tower Insurance rebuild programme 'at full capacity' Uber increases Auckland fares to attract drivers Top executives at Christchurch firm Mercer Group quit Auckland Port row comes to a head Hamilton Airport's revenue at 'rock bottom' Contractor numbers cut as EQC home repair programme downsizes Tiwai Point profitable despite tough conditions Grants agency and publisher still at loggerheads

The Government's Budget was $400 million further in the red than forecast at the end of November, Treasury said today.

The operating deficit before gains and losses was $2.3 billion for the first five months of the financial year show.

Officials said the variation was mainly due to tax revenue being $514m lower than expected but that was tipped to reverse in coming months.

Continued strength in share markets around the world saw big gains for the Government's financial investments of $2.8b, which was $2b ahead of forecast..

That took the operating balance to a surplus of $2.3b - $1.6b higher than forecast. .

Net debt at $59.6b or 27.6 per cent of gross domestic product was close to forecast.

The figures included the sale of Air New Zealand shares which raised $365 million and saw a gain on disposal of about $52m.

When ACC and NZ Superannuation Fund investments in Air NZ are removed from the equation the estimated gain on disposal reduced to $46m.

Finance Minister Bill English said the books were still on track to reach surplus in the 2014-15 year, "but, as we have said many times before, this remains quite a challenge" .

"In particular, we need to remain focused and disciplined and now is certainly not the time to get loose with spending and fiscal policy - as some political parties are advocating," he said.

Ad Feedback

- Fairfax Media

Special offers

Featured Promotions

Sponsored Content