Core Crown tax revenue was 0.4% weaker than forecast, partially due to weakness in the corporate tax take.<\/p>\n
This fell by 3.5% year-on-year. While the economy was weak over this time, Treasury said the drop also reflected the impact of the Government\u2019s Investment Boost policy, which enables businesses to claim 20% of the cost of new assets as an expense, then claim depreciation as usual on the remaining 80%.<\/p>\n
Overall, core Crown tax revenue was 1.5% higher than the same period the prior year, as higher wages and more spending saw people pay more income tax and GST.<\/p>\n
However, core Crown expenses were 3.6% higher. <\/p>\n
The jump was largely due to the cost of healthcare and welfare (including New Zealand Superannuation) rising.<\/p>\n
Treasury noted the accounts were also negatively affected by the New Zealand Superannuation Fund and the ACC\u2019s very large investment portfolios not performing as well as expected.<\/p>\n
At the end of March, net core Crown debt was worth $187.8b, or 42.2% of GDP. This was 1.8% less than expected.<\/p>\n
Net debt to GDP has broadly been on an upward trajectory since the Covid-19 pandemic. Before 2020, it fell to below 20% of GDP.<\/p>\n
The accounts to March are the last set to be published ahead of the Budget on May 28.<\/p>\n
Speaking to media on April 23, Finance Minister Nicola Willis said the war meant New Zealand\u2019s economic recovery had been \u201cdelayed, not derailed\u201d<\/a>. <\/p>\n She noted that uncertainty was such that Treasury was redoing its forecasts pretty late in the piece, ahead of the Budget.<\/p>\n Jen\u00e9e Tibshraeny is the Herald\u2019s Wellington business editor, based in the parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.<\/p>\n