Finance Minister Grant Robertson said the Government’s accounts continued to track slightly better than expected in the eight months to the end of February, with the Government surplus nearly $500 million higher than the Treasury forecast in December.
He said the latest financial statements show the Government is sticking to the Budget Responsibility Rules, “which require us to run a sustainable surplus, keep net debt on track to fall to 20% of GDP in 2022 and to ensure that we manage Government spending responsibly by keeping it in line with previous governments.”
Robertson said a strong jobs market has meant employment growth has been higher in recent months than the Treasury expected, meaning PAYE is above forecast. Greater residential investment and private consumption have boosted GST receipts, while a rise in customs and excise duties have also contributed to core Crown tax revenue coming in $692 million better than expected.
“The Treasury has said that most of the positive variance in revenue is expected to remain through the rest of the year. This reflects underlying economic conditions, with surveys of business and consumer confidence pointing to sustainable growth rates of about 3% over the next few years for the NZ economy.
“Core Crown expenses were close to forecast in the eight months to February. The operating balance before gains and losses was $2.85 billion, which was $494 M above what the Treasury had forecast in December. The surplus is $1.4 B higher than the same time last year.”
He said core Crown net debt at the end of February was 21.1% of GDP, which was below the 21.7% expected by Treasury in December.