The sharp increase in business confidence has given the Government's accounts a shot in the arm, lifting the Budget surplus $834 million ahead of Treasury's December forecast.
In the seven months to January 31 the operating balance - the excess of income over expenditure - was $1.578 billion in the black, up from an expected $744 million.
Treasury Deputy Secretary Iain Rennie said extra tax of $484 million was the main reason for the improvement. Expenses were $108 million below forecast and surpluses from State Owned Enterprises and Crown entities were $108 million better than expected.
GST was $54 million lower than forecast, but company tax was up $149 million due mainly to improved business confidence which prompted companies to increase tax assessments, Treasury said.
The buoyant returns come at a time when New Zealand's growth outlook is healthier than our major trading partners.
Japan and Australia are facing recessions and there are storm clouds gathering in the US where the Federal Reserve has cut interest rates to fight off a downturn.
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