A third of the way through the Government's financial year, the fiscal deficit is wider than forecast on Budget day, as weaker than expected wage growth and private consumption took a $444 million bite out of forecast tax revenues.
The operating balance before valuation gains and losses for the four months ended October 31 was a deficit of $2.87 billion, which is $169 million larger than forecast at the time of the May Budget.
The Treasury is due to publish updated forecasts on December 18.
Because the deficit is the difference between two very big numbers - $20 billion of revenue and $23 billion of spending at this stage of the year - and because timing issues can affect the monthly out-turns, markets pay little notice. But the reasons for the variation can be illuminating.
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An unexpectedly weak September quarter has seen the GST take come in $153 million below forecast and the PAYE take $191 million below - consistent with weak retail sales and a jump in the unemployment rate.
That was largely offset, however, by tax revenue from the self-employed outstripping forecasts by $351 million.
"It's good to see Inland Revenue's tighter collection and enforcement policies resulting in higher effective tax rates for non-incorporated businesses," Finance Minister Bill English said.
Government spending also undershot the forecast, by $343 million or 1.5 per cent.
"Most areas recorded under-spends, with delays in some health spending ($117 million), and lower than expected welfare costs ($108 million) reflecting lower beneficiary numbers than anticipated," the Treasury said.
Education expenses and finance costs were also below forecast at $72 million and $69 million respectively.