New Zealand snared $600m more tax than expected in the second half of 2017, according to statements released by Treasury today.
With the government books opened today it reveals the Labour administration has inherited a booming economy.
This includes a slightly larger than expected operating surplus of $1.1 billion for the last six months of 2017.
This was more than three times the $311 million surplus predicted and up from a wafer-thin $9 million surplus a year earlier, the latest government accounts show.
When combined with higher than expected Crown entity results, the surplus was $800 million more than forecast, Treasury said on Tuesday.
Core Crown tax revenue was $37.2 billion for the six-month period and was $597 million ahead of forecast, due largely to source deductions tracking $300 million ahead of expectations and GST $200 million ahead. Treasury officials said they expect some of those gains to remain through to the end of the financial year on June 30.
Overall core Crown tax was $600m higher than what was expected in the Government's half-year economic and fiscal update, released in mid-December.
Tax sent straight to IRD was $300m more than expected and the GST take was and $200m more than expected.
Core Crown expenses were $39.6b - slightly higher than the $39.5b forecast.
Net debt was $64.82 billion, or 23.2 percent of gross domestic product, $515 million below forecast and down from $65.34 billion a year earlier. That was due to having more currency in circulation, which bolsters available financial assets, and higher valuation gains than anticipated. The core cash deficit of $5.95 billion was in line with expectations, widening from $3.91 billion a year earlier.
Finance Minister Grant Robertson said the figures were positive signs for the economy.
"We've seen consumer confidence improve over the past month, while businesses' confidence in their own activity – which is more closely correlated to economic growth than headline business confidence – has also been positive," he said.
"At this point in the year these results indicate the economy is tracking well. The Government is committed to seeing this continue and ensuring that we have sustainable growth and a fair share in prosperity for all New Zealanders."
The New Zealand economy will slow this year as labour constraints, changes in government infrastructure investment and lower dairy prices bite, economic research group Infometrics said this month.
"Lower levels of business and consumer confidence could also negatively affect business investment and household spending during 2018," said Infometrics chief forecaster Gareth Kiernan.
Infometrics now sees GDP growth slowing through the year to 2.6 per cent by early next year - compared with earlier forecasts of accelerating growth.
Prior to this latest report Infometrics had been forecasting GDP growth averaging 3.4 per cent a year during this year and next.
While far from apocalyptic, that could put New Zealand's growth track below that of global expectations of around 3.1 per cent this year which could have implications for investment and the New Zealand dollar.
The Crown's net worth was $114.09 billion, some $826 million more than expected, and up from $95.55 billion a year earlier.
- Additional reporting from BusinessDesk.