The Government has recorded an operating surplus of $1.8 billion for the eight months ending February, but re-valued liabilities will slash that after this year's Budget.
Finance Minister Michael Cullen said the Crown Accounts showed the Government was meeting its fiscal targets and running structural surpluses. This was due to atax take $617 million ahead of forecasts, combined with lower-than-expected expenses and higher dividend returns.
But Dr Cullen repeated earlier warnings that "liabilities of the Government Superannuation Fund and the Accident Compensation Corporation are likely to be revised up sharply this year, partly because of the drop in interest rates."
"The extent of the increase is not yet known. We don't have a projection yet for the GSF. But ACC's current estimate is for a negative revaluation of $875 million compared with the DEFU [December Economic Fiscal Update].
"This is in contrast to the 1999-2000 year, when the ACC valuation came through as a positive."
Dr Cullen said a 1 per cent increase in interest rates boosted ACC's liability about $400 million.
There had also been a $400 million rise in its liability for the long-term seriously injured. This was caused by higher costs from court rulings and broader entitlements.
The final valuations for ACC and the super fund will not be calculated until June 30. The Budget will be presented on May 24.
Dr Cullen said Treasury was working on excluding the one-offs from the underlying balance.
