The Government said this week that the first set of Crown financial statements for the 2018/19 year show accounts are tracking in line with the Budget 2018 forecasts.
Finance Minister Grant Robertson said Treasury released the financial statements of the Government for the September quarter as the first three months of the new financial year.
“As with other years, these initial readings early in the financial year can be variable due to differences in the timing of revenue and expenses, and corporate reporting structures,” Robertson said.
“The operating balance before gains and losses (OBEGAL) was close to forecast at a $0.3 billion deficit over the three months.
“A small deficit is normal at the start of the financial year. This is because monthly tax revenue ramps up as the year progresses, while expenses are more evenly spread out.”
Robertson said Treasury advises that the early deficit is set to reverse out into a surplus in the coming months.
“Core Crown expenses were close to forecast, at 1% below expectations, while core Crown tax revenue was within 0.6% of the Budget forecast.
“Within revenue, we saw some of the typical early-year variations. While source deductions and GST were slightly above forecast, in line with the strong labour market and stronger-than-forecast residential investment, corporate tax revenue – using the reported ‘accrual’ measure – was 12.3% below forecast.”
Treasury said the September quarter accrual corporate tax result was affected by timing and accrual movements, and that the early reading is not necessarily a reliable indicator of underlying corporate profitability.
The less-volatile ‘receipts’ measure of corporate tax was on forecast and is up 8.2% on the same period last year.
“Net core Crown debt stood at 20.9% of GDP at September 30, below the Budget forecast of 21.7% of GDP. The Government is focussed on keeping net debt under control, with the Budget Responsibility Rules committing us to reducing net debt to 20% of GDP within five years of taking office.
“At the same time, we are making record investments in infrastructure and public services like health, education and housing. This is a careful balance between making the important investments NZ needs while making sure we’re not burdening future generations,” Robertson added.