Government finances improve on last year

Firm control of the Government’s expenses and an improvement in revenue has kept the Crown’s financial position broadly on track with forecasts in the five months to 30 November, Finance Minister Bill English says.

“Compared to the first five months of the previous financial year, we have made good progress in moving towards our target of getting back to surplus by 2014/15,” he says.

“The operating deficit before gains and losses has come in at $3 billion for the five months to 30 November. That’s a $1.5 billion improvement on the $4.5 billion deficit for the same five months last year.

“Core Crown tax revenue was $1.1 billion higher for the first five months of this financial year, partly as a result of higher source deductions through wage growth.

“At the same time, core Crown expenses were $50 million lower than the previous year, as government spending remained relatively flat.

“Overall, the results for the first five months of the year were in line with forecasts in the Half-Year Update last month.

“It’s important that the Government sticks to its programme of responsible fiscal management, so we can get back to surplus and start repaying debt.

“At the same time, we will remain focused on building a more competitive and productive economy that encourages investment and supports jobs and higher incomes.

“That will be the focus of Budget 2013 later in the year,” Mr English says.