New Zealand Government 9-Month Operating Deficit Wider Than Forecast As Tax Revenues Fall
First Published Monday, 7th May 2012 11:54 pm - © 2012 Dow Jones
--NZ government 9-month operating deficit before gains and losses at NZ$6.1 billion
--NZ Finance Minister says important NZ returns to surplus
(Adds comments from Finance Minister Bill English in the sixth and seventh paragraph)
By Lucy Craymer
Of Dow Jones NEWSWIRES
WELLINGTON -(Dow Jones)- The New Zealand government's operating deficit for the nine months ended March 31 widened more than forecast as tax revenues continued to be lower than expected, the Treasury said in a statement Tuesday.
The operating deficit before gains and losses was NZ$6.1 billion ($4.8 billion) in the nine-month period, NZ$787 million wider than forecast in an October pre-election update.
The Treasury said lower-than-expected revenues were primarily due to lower tax revenue, but a boost to tax revenue is expected in the fourth quarter due to a stronger performance by some corporate taxpayers. Tax revenues in the first nine months were 3.8% below its forecasts.
Offsetting the fall in tax revenue was a reduction in core government expenditure that came in NZ$1.75 billion below forecast levels, the Treasury said.
The New Zealand government is committed to returning to surplus by June 30, 2015. However, this remains a challenge with Treasury forecasts in April indicating that if the government continues on its current path it will record a NZ$640 million deficit for that period.
"These statements are consistent with preliminary budget forecasts which show a $1 billion deterioration since the Budget Policy Statement in February," New Zealand Finance Minister Bill English said.
Returning to surplus is important because New Zealand is one of the most indebted countries in the world as measured by the country's net international investment position, he said.
-By Lucy Craymer, Dow Jones Newswires; +64-4-471-5990; firstname.lastname@example.org