Treasury reports budget deficit of NZ$5.9 billion in 10 months to April, which was NZ$1.4 billion better than forecast on higher taxes and lower spending

Treasury has reported the Government's operating budget before gains and losses (OBEGAL) was a deficit of NZ$5.9 billion in the 10 months to the end of April.

This was NZ$1.4 billion better than forecast because core tax revenues were 1.7% above forecast, largely due to better than expected corporate profits and smaller than expected GST refunds.

Spending of NZ$56.1 billion was also 0.6% or NZ$323 million lower than forecast.

See more details below from Treasury and the full results here:

In the ten month period to 30 April, core Crown tax revenue of $45.1 billion was $772 million or 1.7% higher than forecast:

• Corporate tax was $452 million (7.0%) above forecast with 2011 terminal tax assessments and Portfolio Investment Entity (PIE) tax each approximately $200 million above forecast.  There was stronger volume growth in PIE tax than forecast, particularly for KiwiSaver funds and strong investment returns in the March 2012 quarter. 
• Goods and Services Tax (GST) was $313 million (2.7%) above forecast, mainly as a result of smaller-than-expected GST refunds. 

For the same period, core Crown expenditure of $56.1 billion was $323 million or 0.6% lower than forecast.

The operating balance before gains and losses (OBEGAL) deficit for the ten months to 30 April was $1.4 billion (19.2%) lower than forecast at $5.9 billion, largely as a result of the higher-than-expected tax and lower-than-expected core Crown expenses.  In addition, better than expected results across State-owned enterprises and Crown entities contributed approximately $300 million to the lower-than-expected deficit.

At 30 April, net debt stood at $52.0 billion (25.9% of GDP) and gross debt stood at $78.1 billion (38.8% of GDP).