Grant Robertson says books in good shape to weather coronavirus

Finance Minister Grant Robertson. Photo / File

Finance Minister Grant Robertson says the latest government accounts are in good shape, however the outbreak of coronavirus is expected to knock the economy in coming months.

The government's operating balance before gains and losses was a surplus of $400 million in the six months ended December 31, down from a $1.1 billion surplus in the same period a year earlier. Still, that was an improvement on the $100m deficit forecast in the December half-year economic and fiscal update.

"At the halfway point of the year, the books are in good shape. There is normally movement in these numbers across monthly accounts, but that will be exacerbated in the second half of the year by the impact of coronavirus," Robertson said in a statement.

"Agencies are currently assessing the potential economic impact of the coronavirus outbreak and while that work is not yet completed it is clear that there will be some impact on the New Zealand economy."

The total tax take at $43.07b was up 7.7 per cent from a year earlier, and 0.6 per cent higher than forecast. The government said that was mainly due to higher than forecast tobacco duties of $1.7b, about $155m more than expected.

Government spending was slightly below expectations at $45.6b, which Treasury said largely reflected timing issues. That figure was down 7.9 per cent from a year earlier.

The Treasury's forecasts have been pushed around by the Inland Revenue Department's new IT system, which recognises tax receipts more consistently throughout the year rather than the relying on year-end assessments as in the past.

This is most evident in the fluctuation in the corporate tax take, which was up 17 per cent at $5.29b in the six months compared to a year earlier, and 2.1 per cent lower than expected.

Personal income tax for the first half of the fiscal year was 1.3 per cent above forecast at $20.1b, and up from $18.83b a year earlier. The annual personal income tax-take is forecast to rise 4.9 per cent to $40.6b this year.

The GST collection rose 5.9 per cent to $11.49b, which officials said was due to increased consumer spending. Annual GST collection is expected to rise 4.9 per cent to $22.93b.

The government's net debt of $64.46b, or 21 per cent of gross domestic product was close to expectations and the residual cash deficit of $7.7b was $400m smaller than forecast.

The operating balance, which includes movements in the fair value of its investment portfolios and actuarial adjustments, was a surplus of $5.4b in the six-months, compared to a forecast deficit of $100m. That was largely driven by changes in the value of ACC's outstanding claims liability.

The government's net worth of $144.5b, or 47.1 per cent of GDP, was $5.49b more than forecast, and 3.9 per cent higher than a year earlier.

Treasury will next release its interim financial statements for the seven months ended Jan. 31 on February 28.