Finance Minister Nicola Willis,
Photo: RNZ / Samuel Rillstone
The government’s finances were better than expected nearly half way through the financial year as a fall in expenses offset a lower tax take.
Treasury figures, excluding ACC finances (OBEGALx), showed a deficit of $5.6 billion for the five months ended November, $1.1b lower than outlined in an updated forecast issued in the December half year update (HYEFU).
The deficit including the ACC finances (OBEGAL) was $1.05b lower than forecast at $5.9b.
Treasury said all the main financial indicators were better than forecast.
The core tax take was $200m lower at $49.1b, with company tax about $300m lower, and GST down $200m, which was partly offset by a rise in other individuals’ tax revenue.
State owned enterprises and other crown entities earned more, and strong financial markets boosted the value of the NZ Superannuation Fund and other assets.
Crown spending was more than $1.1b lower than forecast at $59.8b, driven by reduced spending on core government services, health, and a fall in the cost of carbon credits.
However, Treasury said some of the reduced spending was likely to be because of the timing of programmes and might be reversed later in the financial year.
Net debt was $900m lower than expected at $183.1b, about 41.6 percent of the value of the economy.
The December HYEFU forecast an OBEGALx deficit of $13.8b for the year ended June 2026.
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