Government Tax Income below Expectation
February 23, 2009 New Zealand Taxation
The Governmental spending power is lower than the forecast pre-election figures, a lower tax revenue is blamed.
According to the financial statements released by the New Zealand Government under the Public Finance Act 1989, the government is operating with a much lower monetary amount than previously predicted. Chief blame behind this rest with the lowered tax revenue experienced by the government, with figures of $29,344 million as opposed to the December forecast of $30,529 million. Similarly the Crown’s core expenses were almost one billion dollars higher than expected.
ACC contributed a nearly $2.4 billion dollar extra loss to the government budget, on top of the tax lowering. Another serious contributing factor is some “unforeseen losses” with Mortgage Backed Securities that the Government held.
At the initial release of these figures on Friday 20th of February, when asked about upcoming tax cuts and their effects on the Government budget, John Key is said to made furlong and melancholy replies. The gloomier than expected numbers can easily attributed to this, although no committed word was given as to the fate of the promised tax cuts.