The New Zealand government eked out a tiny surplus in the first six months of the fiscal year as growth in domestic consumption lifted the goods and services tax take, while uncertainties over the Kaikoura earthquake costs meant expenses were less than expected.
The operating balance before gains and losses was a surplus of $9 million in the six months ended December 31, compared with a forecast deficit of $666m in the Treasury's Half Year Fiscal and Economic Update (HYEFU). That was largely due to core Crown revenue being 0.9 per cent more than forecast at $35.4 billion while core Crown expenses were 0.8 per cent below forecast at $38.1b.
The tax take has been rising in an economy which is outpacing many of New Zealand's trading partners. The Treasury said today that GST revenue was 1.9 per cent, or $173m above forecast, "consistent with the higher than forecast growth in domestic consumption through the September quarter". Core Crown expenses were $303m less than expected, with the Treasury said mainly reflected "forecast expected costs in relation to the Kaikoura earthquakes which have yet to be quantified with enough certainty to include in the actual results".
"Over time, as reasonable estimates are able to be made, these costs will be recognised in the actual results, reducing the variance," the department said.
The actual operating balance was a surplus of $6.1b compared with a HYEFU forecast of $2.47b. Net gains in the fiscal first half of $5.9b, were $2.9b higher than forecast, primarily related to an actuarial gain of $3.1b ($2.8b higher than forecast) of the ACC liability, the Treasury said.