WELLINGTON: New Zealand has reported that tax receipts in December were above forecasts, contributing to a reduction in the budget deficit during the six months to December.
New Zealand’s Finance Minister, Bill English, said that the gap between revenues and expenditure – known as the operating balance before gains and losses (OBEGAL) deficit in New Zealand – narrowed to NZD381m (USD285.9m). This was substantially lower than earlier projections that pointed to a deficit of NZD1.37bn. Revenues were NZD323m higher than expected, primarily due to strong corporate tax receipts, which were up 3.1 percent on forecasts.
Goods and services tax (GST) receipts were 1.7 percent ahead of forecasts, and customs and excise duties were also up 1.8 percent. English said: “Although GST and corporate tax were both ahead of forecast for the six months to December, these latest figures underscore the difficulty in forecasting the difference between two large numbers. It remains to be seen whether the higher-than-expected growth in revenue continues through the rest of the financial year.”
“The Government still considers that the strong economy and responsible fiscal management can deliver a surplus when the final accounts are published in October. The smaller than expected OBEGAL deficit reinforces that message. “The Government is continuing to responsibly manage its finances. Crown expenditure for 2014/15 is forecast to be NZD4.1bn lower than forecasts made when we first set the surplus target back in 2011. The challenge is coming from revenue, which the Government has much less control over,” he said.
