Lower tax take hits Government's deficit
The Government's deficit is running $169 million higher than forecast at $2.9 billion for the first four months of the financial year.
Treasury today released the Crown's financial statements showing that for the four months to the end of October tax and interest revenue were both lower than expected, partially offset by lower expenses.
Tax revenue of $17.9b was $292m, or 1.6 per cent, lower than expected.
That is little changed from the September result, with most major types of tax revenue below forecast except the "other individuals" category tax revenue.
GST was $253m lower than forecast, driven by private consumption levels that were lower than expected.
Source deductions were $191m below forecast, due to weaker wage growth, and the other individuals' tax revenue was $351m higher than expected, reflecting an increase in the effective tax rate paid by non-incorporated businesses.
Lower-than-expected interest rates saw revenue from that source come in $244m lower than forecast.
Expenditure of $22.9b was $343m, or 1.5 per cent, lower than forecast.
That included health spending ($117m lower), and welfare costs ($108m) because there were fewer beneficiaries than expected.
Education expenses and finance costs were also below forecast, $72m and $69m respectively.
Earthquake expenses were $114m above forecast.
While the deficit before gains and losses (Obegal) was higher than forecast, gains on the Superannuation Fund and ACC's investment portfolios were about $1.4b higher than expected, and an actuarial gain of $228m was also recorded on ACC's claims liability that had not been forecast.
These gains held the operating balance deficit to $34m, $1.9b lower than expected.
Gross and net debt were close to forecast at $81.5b (39.8 per cent of GDP) and $55.5b (27.1 per cent) respectively.
Finance Minister Bill English said the figures confirmed the Government was continuing to control new spending and get better results from existing programmes "as we move towards our target of returning to surplus in 2014/15".
Treasury's new forecast will be released on December 18 in the half year economic and fiscal update.
English said it would include Treasury's latest assessment of the global economic situation and its likely impact on New Zealand.