The most recent Crown Accounts reveal a strong outcome amid difficult global economic conditions, reflecting the Government’s meticulous bookkeeping.
The Operating Balance before Gains and Losses (OBEGAL) deficit for the eleven months ending in May 2022 was $7.7 billion, $5.5 billion less than that anticipated in May’s Budget.
Core Crown costs fell $1.4 billion short of expectations. Core Crown tax collection exceeded expectations by 3%. Higher than anticipated business tax ($1.6 billion), net other individuals’ tax ($0.7 billion), and PAYE ($0.6 billion) were the main contributors to this.
The OBEGAL deficit will be lower than anticipated at the May Budget, according to the Treasury, who predicts that a large portion of this improved result will be reflected in end-of-financial-year numbers.
The amount of net debt, 16.6% of GDP, was $4.3 billion greater than expected. The New Zealand SuperFund and ACC derivatives’ financial portfolio is being negatively impacted by the worsening market conditions, which are the main cause of this.
The new net debt figure would be more erratic than the old measure, the Treasury has previously highlighted. This debt level is still among the lowest in the OECD.
“While results at the aggregate level remain solid, we know that for many New Zealand households and businesses they are finding it tough going at the moment.
“The global economy is facing a number of challenges, triggered by the ongoing effects of the COVID-19 pandemic,” Grant Robertson said.
“Countries around the world are grappling with higher inflation that they have been used to, supply chain disruptions are feeding into that along with the ongoing war in Ukraine.
“The Government is doing what it can to shield New Zealanders from the impacts of the global headwinds, including reducing fuel excise and road user charges, and introducing a temporary cost of living payment that will begin from next month.
“We are doing this while also carefully managing the Government accounts as we have throughout this COVID pandemic,” Grant Robertson said.
In October, the yearly audited crown accounts for the fiscal year that ended on June 30th will be made public.
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