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The Government's operating surplus in fiscal 2002/03 continues to track higher, Treasury figures released today show.

The operating surplus for the 10 months to April 30 was $3.258 billion, some $410 million above the track forecast on budget night in May.

The underlying surplus known as the Oberac -- the operating balance excluding revaluations and accounting changes -- improved by a lesser amount, by $267 million to $5.659 billion.

The budget forecast was for the Oberac surplus to be $4 billion.

Revenue in the 10 months of $48.2 billion was $771 million better than expected, while expenses were $361 million more than expected at $45.0 billion.

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Treasury officials said the surplus was only tracking above the May forecast because of timing issues mainly surrounding the collection of tax and it was still expected to end the June 30 financial year around the level forecast in the budget on May 15.

Revenues improved due to sales of goods and services being $450 million higher than forecast, and tax revenue being up $194 million on predictions in the budget.

The Government appears to have been a winner and loser from the autumn rise in wholesale electricity prices.

Higher sales were due to increased revenues from state-owned electricity companies, though this was entirely offset by the higher cost of goods sold increasing expenses.

Investment income was $127 million higher than forecast, reflecting a slight appreciation of assets compared to that expected in May, Treasury said.

Net core government debt, which excludes the debt of state-owned enterprises, was $16.2 billion or 12.8 per cent of gross domestic product, compared to a forecast 13.0 per cent.

Net debt was lower than forecast because of delays in capital projects and extra circulating currency, Treasury said.

The operating balance for the 11 months ending May will be released on July 11.