The New Zealand government's operating surplus was 9 percent above forecast in the 11 months to the end of May but higher-than-expected Crown entity insurance claim costs offset some of the gains.
The operating balance before gains and losses (obegal) was a surplus of $5.23 billion in the 11 months ended May 31 versus a forecast of $4.78 billion in the budget economic and fiscal update, published May 17. That update projected an obegal surplus of $3.14 billion for the year ended June 30.
The obegal result, however, was offset by the Accident Compensation Corporation’s higher than forecast insurance expenses. Total insurance expenses were $4.62 billion versus a projected $4.40 billion. Of that, the majority is related to ACC.
Adding gains and losses to the obegal, the operating balance was a $7.91 billion surplus, which was $475 million below forecast. The net worth attributable to the Crown came in at $118.58 billion, $389 million below forecast.
Net debt was $57.49 billion versus a forecast of $58.57 billion. It was 20.1 percent of gross domestic product and is forecast to be 20.8 percent of GDP for the full year. Gross debt was $87.39 billion versus a forecast of $86.51 billion.
Core Crown tax revenue at $73.49 billion for the 11 months was close to forecast and Treasury officials said source deductions were $300 million above forecast, with recent data indicating the labour market may be stronger than was forecast in the 2018 Budget. Corporate tax was below forecast by $200 million, mainly owing to seasonal fluctuations in provisional tax assessments, which are expected to reverse in June, it said.
Core Crown expenses were $439 million lower than forecast at $73 billion. The variance was spread across a number of different departments.