New Zealand Government Accounts Released

April 9, 2010 New Zealand Taxation

Government Building @ WellingtonThe New Zealand Government has released documents showing that the national budget deficit is narrower than projected, despite tax collection falling below expectations.

On April 9th the New Zealand Government released its Financial Statements for the eight months ended February 28th 2010. The new statements show the Government’s operating deficit for the period to be NZD 4.49 billion, 11.2 percent below the 2009 Half Year Economic and Fiscal Update. The difference was attributed to lowered Government spending and a once-off payment to the Government from its structured financing legal settlements. An unexpected surge in retail sales caused also Goods and Service Tax (GST) collections to reach NZD 389 million, over 5.3 percent higher than projected. The positive results were partially offset by lowered Core Crown Tax Revenues which were reported to be NZD 32.6 billion, approximately 361 million below projections. Additionally, the Government reported Core Crown Revenues of only NZD 36.2 billion, nearly NZD 348 less than expected.

Bill English, New Zealand Finance Minister, applauded the overall results and the Government’s ongoing efforts to pursue positive fiscal results. The Minister said that the National-led Government has made it clear that the large increase seen in public spending over the previous five years were unsustainable and imposed too great an effort on tax payers. He continued on to say that the latest results are a product of the Government’s successful cutting of over NZD 2 billion worth of low quality spending. In the face of several years of upcoming deficits, the upcoming Budget release will mandate similar cutbacks in order to minimize the effects of future shortfalls. Indicating the possibility of similarly positive yearly fiscal results in the future, Bill English said, “We are working hard to get back into surplus and get the Government’s debt under control.”

Photo by Remon Rijper