New Zealand's better than expected economic performance delivered the Government a $8.7 billion operating surplus for the 2006/2007 financial year, but Finance Minister Michael Cullen says it is still uncertain when any tax cuts will be announced.
Treasury said when the Government wrote the budget for the year
ending June 2007 it had not expected the longest growth period in 40 years to keep going, and as result more tax had filled the coffers.
After taking into account bookkeeping changes, investments and capital purchases, Dr Cullen was left with a cash surplus of $2.6b.
At the beginning of the financial year Treasury initially predicted the Government would be left with a cash deficit of $1.5b - a turn around of $4.1b.
Besides bringing in more tax, big spending departments such as health and education also spent less money than budgeted or delayed spending until the current financial year.
Gross debt rose slightly to $36.2b, but was down as a proportion of GDP to 21.7 per cent.
Taking into account all assets - including the New Zealand Superannuation Fund - the Crown's net financial asset position was in the black to the tune of $9.6b.
Dr Cullen said the Government had delivered a "strong and sustainable" fiscal position which left New Zealand in a good position to deal with future challenges, such as the ageing population, as well as any other unexpected shocks.
Dr Cullen said the cash surplus which had come as a "surprise" since this year's budget amounted to $500 million and this was likely to go into capital investment.
The future forecasts showed there would be some room for more spending or "revenue reduction", but it would be December before a clearer picture became available about how much room there was to move and decisions would be taken as part of next year's budget.
Dr Cullen agreed the healthy books put him in a strong position for an election year budget.
Treasury was continuing to predict that surpluses will fall and that the cash surplus would dry up in the coming years, but said it was continuing to work on the accuracy of its forecasting, as it made difficult for Governments to write budgets.
- NZPA
