NZ books on track despite blowout
A smaller than expected tax take is being blamed for the shortfall in the Crown’s operating balance before gains and losses (OBEGAL).
It was in deficit to the tune of $NZ1.1 billion in the seven months to January 31, $NZ637 million more than forecast in the Treasury’s half year economic and fiscal update in December.
“At this stage, it is difficult to determine how much of t Air Max Shoes Air Max Shoes g>he lower than forecast tax is temporary versus permanent, but we expect this to become clearer over the next few months,” the Treasury’s acting chief government accountant Fergus Welsh said.
Core tax revenue was $NZ876m below forecast at $NZ34.98b.
Finance Minister Bill English said the result was inconsistent with strong economic growth indicators but reinforced the need for the government to keep a tight rein on the economy.
“This makes it even Air Max Shoes more important for the government to continue carefully managing its spending as we target a return to surplus next year.
“We remain on track to surplus in 2014/15 but, as we’ve said, this is a challenging goal and we need to remain disciplined,” he said.
Mr English said the smaller than forecast revenue was at odds with other economic indicators that were in line with December’s forecast.
Over the same period a year earlier the deficit was $NZ2.5b.
The smaller tax take was across the board, with GST 3.7 per cent below forecast and total corporate tax falling short of expectations by $NZ135m.
Treasury officials said timing issues, including an imbalance between GST refunds and receipts and some large corporate tax payments yet to be made, are likely to see the gap narrow by the year end.
Operating balance surplus was $NZ629m higher than expected at $NZ3.4b.
The government expects to post an OBEGAL deficit of $NZ2.3b this financial year ending J Air Max Shoes une 30 before returning a surplus of $NZ86m the following year.