The government's books for the first 11 months of the year are in better shape as the tax take came in higher than expected.
The Crown accounts show the operating balance before gains and losses was in surplus by $7.0 billion for the 11 months to May 31. That's $2.5b more than forecast in the May budget and $1.7b higher than the same time last year.
"There are some large differences across most key fiscal indicators, some of which are likely to persist until year-end. These differences are primarily a result of underlying strength in the tax take and changes in assumptions used to value the Government's long-term liabilities," Treasury said.
However, while it said there is underlying strength in tax revenue it also noted that in the month of June expenses are normally higher than revenue "therefore the year-end results are likely to weaken from the May position and do not necessarily indicate a deviation from the full-year expected result."
Treasury is forecasting the operating balance before gains and losses to be $3.5b surplus for the 12 months to June 30.
The Crown's tax take was $79.7b, 2.8 per cent or $2.2b higher than forecast in the May budget. Other persons' tax revenue - which was $900 million higher than expected - is likely to be attributable to stronger-than-expected taxable income for the 2019 tax year and the transition to the new Inland Revenue processes used to calculate tax revenue, Treasury said.
Corporate tax revenue - $700m higher - was mostly due to stronger-than-forecast taxable corporate profits and higher-than-expected Portfolio Investment Entities profits.
GST - $300m higher - was likely driven by a combination of stronger growth coming from GST revenue estimates and stronger-than-expected residential investment. it said.
On the other side of the ledger, core expenses were 0.3 per cent below forecast at $78.4b.
Core Crown residual cash was a deficit of $200m, which was $900m narrower than forecast, mainly due to core Crown tax receipts being $600 million higher than forecast. It compared to a deficit of $2.8b in the same period a year ago.
Net core Crown debt of $57b, or 19.3 per cent of GDP, was $1.4b less than forecast.