The Government operating surplus for the 11 months to May was $7.46 billion -- $675 million ahead of the forecast in the May 19 budget, Treasury said today.
The higher-than-forecast surplus was due to:
* higher-than-forecast tax revenue of $544m largely due to corporate tax ($368m), net "other persons" ($93m)and source deductions ($61m). Corporate taxes were ahead of forecast largely due to higher-than-expected terminal tax assessments being lodged in May;
* investment income being higher-than-forecast by $79m, reflecting investment gains by the Government Superannuation Fund, NZ Superannuation Fund, Earthquake Commission (EQC) and ACC, on their financial assets portfolios due to movements in global asset markets;
* expenses being $52m lower than forecast due to two offsetting factors: - $330m of core Crown expenditure delays in Health ($116m), Economic and Industrial Services ($90m), Education ($50m) and other ($74m); and
* recognition of a $307m estimated Kyoto liability.
The operating surplus before operating balance excluding revaluations and accounting changes (Oberac) was $7.4 billion, which was $79 million lower than the operating balance, but $596m above forecast, reflecting the removal of investment gains on the investment asset portfolios held by the GSF, NZS Fund, EQC and ACC.
Net cash flow from core operating and investing activity was $3.3 billion -- $708 million higher than forecast, reflecting higher than forecast tax receipts of $418m (primarily corporate tax) and delays in the purchase of physical assets and advances.
Gross government debt was $35.4 billion (24.2 per cent of GDP), at the same level as the revised budget forecast. Net debt was $11.2 billion, which was around $700m lower-than-forecast, reflecting higher than forecast tax receipts, delays in purchases of physical assets and higher issues of circulating currency (not forecast as a matter of policy).
