Covid puts further $1b dent in Government coffers in October
The cost of supporting businesses through the Delta outbreak contributed to a further $1 billion dent in the Government’s accounts in the month of October, an update provided by the Treasury shows.
Its latest statements show the Crown’s operating balance before gains and losses (Obegal) was a $7.8b deficit in the four months to the end of October, which was just over $1.8b higher than forecast at the time of the Budget in May.
Of the $1.8b of unexpected extra debt, $782m had been previously disclosed in the Crown’s accounts for the three months to the end of September, with the remaining $1b new in October.
* Higher-than-expected tax revenue plugs most of the cost of the Delta outbreak
* Government accounts continue to outperform forecasts, up $3.1 billion from December forecast
* The Government is $5 billion better off than expected, as Covid-19 economic bounceback continues
The Treasury said the increase in Covid alert levels and the community transmission of Covid had now resulted in core Crown expenses for the four months to the end of October coming in $4.9b higher than forecast in the Budget.
That was partly offset by taxes and other revenues being $3b higher than forecast during the four-month period.
Net core Crown debt stood at $116b at the end of October, or 34.2 per cent of GDP.
That remained better than the Budget forecast of a $125b debt, thanks to debt being much less than expected in the two months to the end of June – before the Delta outbreak caused the more recent slide in the accounts.
Finance Minister Grant Robertson said the accounts continued to reflect “an economy that has performed better than expected” in the wake of the Delta outbreak.
“As the country transitions to the new Covid Protection Framework and the fewer restrictions that go with it, the prospects are strong for the economy to support the recovery and deal with long-standing challenges such as climate change, housing and child wellbeing,” he said in a statement.