Govt surplus above forecast as books remain strong

The Government’s accounts continued to perform slightly better-than-expected in the nine months to the end of March, with the surplus $910 million higher than the Treasury forecast in December, Finance Minister Grant Robertson says.

“The financial statements reflect the Coalition Government’s prudent fiscal management and show we are keeping to the Budget Responsibility Rules requiring us to run sustainable surpluses, cut net debt to 20% of GDP within five years and for us to spend responsibly in line with previous governments,” Grant Robertson says.

“The Treasury’s financial statements to the end of March show that corporate and income tax has been stronger-than-expected in recent months. This indicates business profits have been higher than expected and that employment growth has remained strong. This matches figures last week showing the unemployment rate is now at its lowest level since December 2008. GST has been buoyed by residential investment and consumption. The Treasury expects this strength in revenue to continue.

“Core Crown expenses were close to forecast in the nine months to the end of March. The operating balance before gains and losses was $3.3 billion, $910 million above forecast in December. The surplus is $1.8 billion higher than at the same time last year.

Core Crown net debt at the end of March was 21.4% of GDP, which was below the 22.2% expected by the Treasury at the Half Year Economic and Fiscal Update in December 2017.

“These numbers show the Government’s plan to make the responsible investments required for a more productive economy is on track. We came into Government six months ago with different priorities and fresh ideas for how to make our economy more productive and shift the drivers of growth away from population increase and housing speculation. We will have more to say on this plan at Budget 2018 on 17 May.

“We are committed to responsibly managing the Government’s finances so that we can make the investments required to ensure people have access to doctors and modern hospitals when they need to, that our children receive the best education in the world that and every New Zealander has a warm, dry place to call home. These critical public services are the foundations of our economy,” Grant Robertson says.