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Government's books remain in surplus

NZ NewswireNZ Newswire 7/04/2016 Jonathan Underhill

The government recorded a surplus in the first eight months of the year, beating the Treasury's forecast for a deficit as higher-than-expected tax revenue helped its books.

The operating balance before gains and losses was a surplus of $398 million for the eight months ended February 29, compared to a forecast deficit of $332 million, the government's financial statements show.

Finance Minister Bill English said while there was often significant fluctuations in the monthly results he was happy that its books had shown improvement.

"We've moved from an $18.4 billion deficit to around balance, and as long as we remain fiscally prudent we are on track to reduce net debt to around 20 per cent of GDP in 2020," he said.

Core Crown revenue of $48.1 billion was $606m more than expected, and included core tax revenue of $44.68 billion, or $828m more than forecast, offset by lower-than-forecast interest income.

Core Crown expenses of $48.4b were $113m more than expected.

The operating balance including gains and losses was a deficit of $5.1b, or $4.6b greater than expected, mainly reflecting higher-than-expected actuarial losses on ACC claims liability and losses on financial instruments because of unfavourable market movements, the Treasury said.

Finance Minister Bill English is scheduled to release his eighth budget on May 26.

In the December Budget Policy Statement, the Treasury projected an deficit of $400m in the year ending June 30, having previously forecast a surplus of $200m.

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