Figures indicate Bill English could record first full year surplus

Latest figures indicate English could yet record the full year surplus he was targeting. Photo / Mark Mitchell

Finance Minister Bill English may yet get his maiden surplus after the latest monthly Crown accounts showed a larger than expected surplus for the past 11 months.

The Crown accounts for the 11 months to May recorded a $1.2 billion surplus, almost $1 billion more than was forecast in the Budget for the same point.

The figures indicate English could yet record the full year surplus he was targeting, despite May's Budget forecasting a $684 million deficit.

The full year figures will be known in October and Mr English was not counting his chickens early.

"There is always some volatility in the monthly Crown accounts and we won't know for some time if there will be a full-year surplus in 2014/15."

He said the important factor in the accounts was it indicated the Government was on track to anchor Crown debt levels at low, sustainable levels.

He said the results were a reward for "careful stewardship" of the Government's finances.

It was a turnaround from the same point last year when a $1.1 billion deficit was recorded.

He said the Government had committed to manage taxpayers' money carefully and was not afraid to try new approaches to delivering the public services.

"That is why we set ambitious targets for departments to deliver real, measurable benefits to New Zealanders. That is why we monitor performance against targets and publish the results - steps that assist to promote accountability and encourage us to do better."

Treasury said the $1.2 billion surplus was predominantly due to higher tax revenue than expected, including $395 million more in corporate tax and $112 million in individual's tax.

However, GST was $205 million lower than expected. The Government had also spent $433 million less than forecast, including $205 million in education.

Total Crown revenue was $87 billion and Crown expenses were $85.5 billion.

National campaigned on a return to surplus in last year's election and was mocked by the Opposition when the Budget delivered a forecast deficit.

Green Party co-leader Metiria Turei described the recorded surplus as a 'blip' which was likely to be short-lived.

"This is a short-term fiscal result linked to the Government's short-term thinking, but the medium-to-long-term economic outlook is less rosy.

Declining business confidence, collapsing dairy prices, stagnant wages, and the possible slow-down of the Chinese economy mean the Government may soon need to start spending again to avoid a recession."

Earlier this week, Prime Minister John Key said the Government was prepared to spend on infrastructure if the economy worsened but did not believe it was that point yet.