Delays to Treaty of Waitangi settlement costs and New Zealand's aid programme have been offset by higher than expected costs from rebuilding Canterbury's infrastructure. Photo / Mark Mitchell
The New Zealand government had a smaller operating deficit than expected in the first eight months of the financial year as it took in more income tax and tax from source deductions than it had forecast.
The operating balance before gains and losses (obegal) was a deficit of $3 billion
in the eight months ended February 28, 16 per cent smaller than forecast in the December half-year economic and fiscal update.
Core Crown tax revenue was $37.6 billion in the first eight months of the year, which was $719 million, or 2 per cent higher than forecast. Source deductions were $266 million above forecast, which the Treasury said showed underlying strength in the economy.
See the latest Government financial statements released this morning here.
Employment and wages data also showed that while aggregate labour incomes were close to forecast, employment was lower, especially for those at the low end of the income scale. The net effect was that the same amount of income was earned by fewer workers, lifting the average tax rate, the department said. Other individuals' tax was $326 million above forecast.
