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Bill English

20 February, 2013

OBEGAL deficit shows careful stewardship

A marginal improvement in the operating deficit before gains and losses in the six months to Dec 31 reflects the Government’s continuing careful stewardship of its finances, Finance Minister Bill English says.

The Government’s financial statements for the six months ended December 31 were published today showing that both Core Crown tax revenue and Core Crown revenue were slightly lower (0.1%) than forecast, but Core Crown expenses came in $273 million lower (0.8%) than expected, helping reduce the OBEGAL deficit by $158 million to $3.2 billion.

“These figures confirm that the Government’s determination to control its spending and get better value from taxpayers’ money is paying off,” Mr English says.

Core Crown expenditure for the six months to December was 32.8% of GDP, compared with forecasts back at our first Budget in 2009 of 36.3% of GDP by 2012/13.

“The six-month results show we are on track to reducing this further to around 30% of GDP in the next few years,” Mr English says.

Part of the reason for the reduced Crown spending was that two Treaty claims were delayed which has deferred $186 million of spending till later in the year. However, setting aside those, most government departments made savings.

Mr English said the operating balance of $1.7 billion was much higher than the forecast deficit of $541 million, largely reflecting the gains on the investments of ACC and the New Zealand Superannuation Fund.

Mr English said the Crown accounts showed that despite difficult financial conditions globally, the Government’s responsible and prudent fiscal management was reaping a steady gain for the New Zealand economy.

“We are doing the right things to achieve our long-term economic plan.”