A month after releasing new budget forecasts, the New Zealand government is tracking above them.
The government posted an operating deficit before gains and losses (obegal) of $3.025 billion in the five months ended November 30, which was $203 million better than the $3.228 billion deficit forecast in the half-year economic and fiscal update released on December 18.
The government is trying to get its books back in the black in the 2014/15 financial year after taking serious hits from the global financial crisis and Christchurch earthquakes. In the update just before Christmas, Treasury forecast an obegal surplus of just $66 million in the 2014/15 financial year, down from the $197 million buffer flagged in the May budget.
In the accounts for the five months to November 30 released today, core Crown spending was 0.1 per cent above forecast at $28.8 billion, and core tax revenue of $22.5 billion was $127 million, or 0.6 per cent, higher than forecast.
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Net gains recorded by the New Zealand Superannuation Fund and Accident Compensation Corp, pushed the operating balance to a $706 million surplus, a $1.2 billion turnaround on the forecast deficit of $515 million.
Net debt of $56.4 billion was $317 million below forecast and is equal to 27.1 per cent of gross domestic product.
The government's ambitious plan to return to surplus in the 2014/15 fiscal year hasn't convinced many, with the Reserve Bank, Fitch Ratings and a survey of financial institutions picking the books to stay in deficit for at least another year.
The Treasury is forecasting an obegal deficit of $9.2 billion in the 2011/12 year, falling to $7.3 billion and $2 billion in the following two years before turning into surpluses.
"It's important that the government sticks to its programme of responsible fiscal management, so we can get back to surplus and start repaying debt," Finance Minister Bill English said.
"At the same time, we will remain focused on building a more competitive and productive economy that encourages investment and supports jobs and higher incomes.
"That will be the focus of Budget 2013 later in the year," English said.