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Govt’s accounts better than expected in May
July 3rd, 2009The eleven month accounts published today by the Treasury show that its financial situation improved somewhat in May.
The total Crown operating balance improved from a deficit of almost $7.7 billion in April to under $7.2 billion in May, an improvement of more than $0.5 billion for the year.
OBEGAL, the operating balance excluding portfolio gains and losses, improved even more – from a deficit of $1.8 billion to $1.2 billion at the end of May.
The main reasons for these improvements are that benefit claim levels have not been as high as projected – not yet anyway – and that The NZS Fund and ACC have reported higher‐than‐forecast investment gains.
Tax revenues from individuals is close to expectations, but tax revenues from companies is down noticeably as profitability vanishes from many firms.
Similarly, tax revenues from interest payments is not growing as it once did. It is now level pegging with the same period last year, as the impact of lower interest rates, and tax-advantaged PIE accounts both limit withholding tax revenue growth.
Tags: ACC, Crown accounts, Cullen Fund, NZS, OBEGAL, Operating balance, Treasury
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July 3rd, 2009 at 11:36 am
Tax revenues from individuals is close to expectations, but tax revenues from companies is down noticeably as profitability vanishes from many firms.
Most of the corporate dairy farmers balance to May, so their accounts and tax work is only just starting now. Once the IRD has to start refunding the provisional tax many will have paid based on the 2008 year (unless many have changed to estimates), and there will be no provisional tax needed to be paid for many in respect of 2010, the government may be in for a bit of a shock. And this may surely be the same across many industries, including tourism, manufacturing, etc …
I will be interesting to hear the results in another quarter.
July 3rd, 2009 at 11:42 am
It will be interesting … (typo correction).
July 3rd, 2009 at 12:04 pm
“and that The NZS Fund and ACC have reported higher‐than‐forecast investment gains.”
So now our goverment funding is dependent on Stock market fluctuation?
Geez…this is scary, to think that my financial and economic wellbeing is dependent on stock market investments.
Guess what will happen if this is really a “dead cat bounce”??
July 3rd, 2009 at 4:45 pm
Bit old but I found this guy (Hugh Hendry) interesting…
http://www.youtube.com/watch?v=fb2-Zo5ng9A&feature=related
FTSE might continue to drop for 10 years…(clip 3/8)