The New Zealand government posted a smaller operating deficit than forecast in the May budget in the first three months of the financial year as it reaped a bigger tax take than expected, and didn't have to book expenses as early as it predicted.
The operating balance before gains and losses (obegal) was $1.29 billion in the three months ended September 30, smaller than the $1.67 billion forecast in the Budget economic and fiscal update in May, and down from a shortfall of $2.12 billion a year earlier.
Core Crown tax revenue was 1.1 per cent ahead of forecast at $14.36 billion, primarily from a bigger intake of personal tax, while core expenses were 1.4 per cent below expectations at $17.52 billion due to delays in earthquake and Treaty of Waitangi spending.
Accrued corporate tax was 4.5 per cent short of expectations at $1.69 billion due to provisional tax falling short of forecasts.
"At this stage it is too early to tell whether this month's result was due to profits being weaker than expected or whether it is a timing difference that will reverse out in later months," the Treasury said in analysis accompanying the release.
Last month the government said the 2013 operating deficit was smaller than forecast due to a bigger corporate tax take and cheaper costs stemming from the Canterbury earthquake, and Finance Minister Bill English affirmed his expectation the books will be in black in the 2015 financial year.
The government's operating balance, which includes movements in its investment portfolios and actuarial adjustments, was a surplus of $539 million, ahead of the forecast deficit of $1.16 billion. That was down to investment gains being $800 million more than expected, mainly from the New Zealand Superannuation Fund, and a reduction in long-term ACC liabilities of $812 million.
The Crown's residual cash deficit of $3.71 billion was ahead of forecast on the bigger tax take, larger dividend receipts, cheaper operating costs and lower capital spending.
Net debt of $60.12 billion, or 28.2 per cent of gross domestic product, was below the forecast $60.45 billion, or 28.4 per cent of GDP, because of the improved cash position.