NZ government 10-month operating surplus tops forecast but insurance claims weigh

The government's operating surplus was just above forecast in the first 10 months of the year. Photo by Lynn Grieveson

The New Zealand government's operating surplus was just above forecast in the first 10 months of the year but the result was weighed on by higher-than-expected insurance claim costs.

The operating balance before gains and losses (obegal) was a surplus of $3.41 billion in the 10 months ended April 30 versus a forecast of $3.25 billion in the budget economic and fiscal update, published May 17. That update is projecting obegal surplus of $3.14 for the year ended June 30.

Core Crown tax revenue at $65.3 billion for the ten months was close to forecast and core Crown expenses were $259 million lower than forecast at $66.1 billion.

The obegal result, however, was offset by the Accident Compensation Corporation’s higher than forecast deficit due to higher than expected claims related expenditure. Total insurance expenses were $4.28 billion versus a projected $3.95 billion. Of that, the majority is related to ACC.

Adding gains and losses to the obegal, the operating balance was a $6.54 billion surplus, which was $4 million above forecast. The net worth attributable to the Crown came in at $117 billion, close to forecast.

Net debt was $62.5 billion, $229 million below forecast. it was 22.1 percent of GDP and is forecast to fall to 20.8 percent of GDP for the full year. Gross debt was $87.48 billion versus a forecast of $87.65 billion.