The Government’s accounts for the five months to November 2017 show revenue and expenses tracking above the latest Half Year Economic and Fiscal Update (HYEFU) forecasts, Finance Minister Grant Robertson says.
Core Crown tax revenue of $30.4 billion came in $530 million above forecast. Corporate tax, income tax and the GST take all came in slightly above the forecasts in the Treasury’s HYEFU published in December. The November statements are the first to be compared against the HYEFU forecasts,” Grant Robertson says.
“While it’s too early to fully establish whether all of this positive variance will remain through the year, some of it is expected to remain. The numbers are an initial sign of how businesses have been performing and how consumers have been spending in recent months.
“The Government accounts released today follow a number of economic surveys in recent weeks, including the Westpac McDermott-Miller Employment Confidence Index, which showed NZ workers are saying job availability is the best it’s been in nearly 10 years, and that they expect this will continue to improve over the next year.
“Also in the news have been a number of business confidence surveys. Behind the headlines, these surveys show that measures of firms’ own activity – which are more closely correlated to future GDP growth than headline business confidence readings – are holding up and pointing to a sustainable growth rate in line with the Treasury’s HYEFU forecasts.
“Core Crown expenses of $33.3 billion during the five months to November were slightly above the $33.1 billion forecast. Treasury says this is because some expenditure was recognised earlier in the year than had been expected.
“The Government accounts show the Operating Balance Before Gains and Losses (OBEGAL) was a surplus of $125 million, compared to a forecast deficit of $457 million. Core Crown net debt was 22.2% of GDP at the end of November 2017, slightly below the 22.5% of GDP expected.
“This Government has committed through its Budget Responsibility Rules to the target of reducing Core Crown net debt to 20% of GDP within five years of taking office. This is a responsible move to ensure that we, and future generations, have the capacity to withstand economic shocks.
“By committing to a slightly slower debt reduction track than the previous Government, we are also freeing up capacity for urgently needed investment to close the social and infrastructure deficits that opened up in New Zealand in recent years,” Grant Robertson says