Treasury reported the Government's surplus was $910 million better than expected in the nine months to March 2018, largely because solid economic growth drove higher corporate tax receipts, higher income taxes and higher GST receipts. Treasury said tax revenues were $1.1 billion better than it forecast in December and this was expected to hold for the rest of the financial year.
Finance Minister Grant Robertson said the numbers were positive going into his first Budget next week.
“These numbers show the Government’s plan to make the responsible investments required for a more productive economy is on track. We came into Government six months ago with different priorities and fresh ideas for how to make our economy more productive and shift the drivers of growth away from population increase and housing speculation,” he said.
The surplus was comprised of higher core Crown revenue of $57.5 billion ($1.1 billion higher than forecast) and lower core Crown expenses, which were $59.1 billion ($0.1 billion lower than forecast). The better figures are on top of $1.4 billion worth of cost savings and extra revenues from tax policy changes that Robertson identified last week.
The accounts also show declining core Crown debt. Core Crown debt was 21.4 percent of GDP, below the 22.2 percent forecast in HYEFU.
Net debt was $60.8 billion at 31 March 2018, $2.2 billion lower than forecast.
The Government has come under increased pressure to loosen its self-imposed Budget responsibility rules to allow more borrowing. The rules commit the Government to reducing core Crown debt to 20 percent of GDP by 2021/2022.