Red ink for Government accounts

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

Relevant offers

Politics

Prime Minister John Key has confidence in OIO despite Onetai farm sale 'mistake' Labour's Chris Hipkins schools up on having a baby 'Alarming' non-voting levels of NZ youth must change: Winston Peters Pressure on water bottlers to pay up John Key's lawyer linked to 'sham' trust involved in failed Auckland property development Spotlight on possible John Key visit to Marlborough's theatre Heat on Maori Television chief executive Paora Maxwell over staff turnover Ted Cruz supporter 'feels like wind sucked out of our sails' as campaign ends NZ unemployment jumps to 5.7 per cent despite strong job growth Pharmac has been given a $50m total funding boost between Government and DHB funding

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
Opinion poll

Should the speed limit be raised to 110kmh on some roads?

Yes

No

Vote Result

Related story: 110kmh limit moves closer

Featured Promotions

Sponsored Content