Crown accounts again better than forecast

The economic recovery from COVID-19 continues to be reflected in the Government’s books, which are again better than expected.

The Crown accounts for the eight months to the end of February 2021 showed both OBEGAL and the operating balance remain better than forecast in the Half Year Economic and Fiscal Update (HYEFU) released in December last year.

The operating balance before gains and losses (OBEGAL) deficit at $4.5 billion was $3.7 billion better than forecast in the HYEFU.

Tax revenue was $60.9 billion, $2.3 billion above forecast due to higher than expected GST revenue and corporate tax.

“This result reflects the resilience of the economy and confidence in the recovery,” Grant Robertson said.

“We do need to remain aware that we are still in a volatile and uncertain global economic environment. There will still be challenges ahead this year, and some sectors and regions will be particularly tested.

“We will consider these economic conditions alongside improved revenue in Budget 2021, which will be delivered on Thursday 20 May. Budget 2021 will include a strong focus on making sure spending continues to be carefully prioritised and targeted at the areas and people that require it the most.

“The significant resources we have put into the recovery and rebuild will be supplemented by further investment over coming Budgets, but quite clearly we need to strike a balance with rebuilding and maintaining a strong fiscal position.”

Core Crown expenses were $68.9 billion, $0.5 billion below forecast, partly due to higher than expected repayments of the COVID-19 Wage Subsidy.

Net core Crown debt was 32.6% of GDP, $4.4 billion less than forecast.