With the Budget just over a week away, the Government’s books look to be in healthy shape, according to numbers from Treasury.
But the Opposition has used the strength of the numbers to criticise its spending priorities.
In the nine months to March, the operating balance before gains and losses (OBEGAL) was a surplus of $3.3 billion - $910 million higher than expected.
The surplus is $1.8 billion higher than the same time last year.
The numbers also show the Government’s tax take was $1.1 billion higher than had been expected over the period, rising to $57.5 billion.
"Corporate tax was above forecast by $0.3 billion mainly owing to provisional tax assessments being stronger than expected. GST and source deductions were both above forecast by $0.2 billion and $0.1 billion, primarily as the levels of employment and residential investment were above forecast. Customs and excise duties were also above forecast by $0.2 billion. Much of this variance can be expected to remain until year end," Treasury says.
National’s Finance Spokeswoman Amy Adams says the numbers show there is “absolutely no justification” for going back on election promises.
During the election campaign, Labour promised cheaper GP visits from July 1 this year.
But that date has been pushed back, with Health Minister David Clark saying the policy would instead have to be phased in.
“[Labour] promised everything to get elected and they simply can’t hide behind some excuse that there is not enough money to do it,” Adams says.
When asked about the broken promise in light of the much larger than expected surplus, Finance Minister Grant Robertson told reporters to “wait until Budget day.”
“You’ll see next Thursday that there is an ambitious programme that the Government is putting forward. We also need to deal with a range of social and infrastructure deficits we were left by the previous Government,” he says.
The Treasury figures show Core Crown debt is also lower than expected, coming in at 21.4% of GDP ($60.8 billion) compared to a forecast 22.2%.
This adds up to the Government owing $2.2 billion less than it had previously expected.
In its half-yearly economic and fiscal update (HYEFU), Treasury expected Government debt to be 21.7% in the year to June.
Asked if the Government will meet the HYEFU target, Robertson again took the wait and see approach, but did say “clearly the trend is that it will be significantly better than HYEFU.”
Under its fiscal responsibility rules, the Government promised to reduce net Core Crown debt to 20% of GDP by 2021/22.
Core Crown tax revenue – $57.5 billion ($1.1 billion higher than forecast).
Core Crown expenses – $59.1 billion ($100 million lower than forecast).
Surplus – $3.3 billion ($910 million higher than forecast).
Core Crown residual cash – $1.6 billion deficit ($1.4 billion lower than $3 billion deficit).
Net debt - $60.8 billion ($2.2 billion lower than forecast).
Read the Government’s full financial statements here.