Government surplus above $9 billion

Treasury has reported the Government had an operating surplus of $9.4 billion for the 10 months ending April, but is still predicting this will fall back before the end of the year.

Finance Minister Michael Cullen has taken exception to media headlines about the size of the Government's surplus saying it does not take into account wider investment he has to make such as putting money into the New Zealand Superannuation Fund.

The books show the tax take was $2.8 billion higher than the comparable period from the previous financial year - growth of 7.1 per cent.

This growth reflected strength in the labour market, growth in companies tax driven by strong returns, and growth in goods and services tax.

Treasury officials said they were sticking to their Budget day forecasts with all measures of the surplus falling back slight in the last two months of the financial year.

Treasury said there had been delays in capital spending on District Health Boards and purchases of physical assets including Defence equipment and Corrections facilities.

"A portion of this delay in investment is expected to reverse in the coming months," Treasury said.

The surplus is still expected to fall back to $8.5 billion by the end of the financial year in June.

The Crown accounts update May's budget and says by the end of April the $9.4 billion surplus was $0.1 billion higher than the Budget day forecast.

Treasury said after stripping out revaluations and investment gains, such as Meridian Energy sale of Australian assets, the surplus was $7.4 billion.

After taking into account investments and capital spending, the Government's cash surplus was slightly ahead of forecast at $3.2 billion.

Government spending was $4.8 billion, or 13.3 per cent, higher than the comparable period from the previous financial year.

- NZPA