Lower tax revenue sees government coffers erode by $2.2b
The government’s books are getting progressively worse with latest figures showing tax revenue tracking below forecast by $1 billion.
Treasury deputy secretary Peter Bushnell says that apart from investment losses, there was actually little difference between the results today and previous estimates in October and December – but the difference is set to widen over the coming months.
The operating balance before gains and losses (Obegal) is $0.1 billion, $1.1 billion lower than forecast, and the residual cash deficit is negative $8.3 billion, $0.9 billion lower than forecast.
Including gains and losses the operating balance of -$6.2 billion is $8.4 billion lower than the October Pre-Election forecast of a $2.2 billion surplus (and approximately $2.4 billion lower than forecast in the December Update).
The main reasons for the deficits according to Treasury are tax revenue being $1 billion lower than forecast, investment losses being $4.9 billion higher than forecast, and $2.4 billion in losses recorded by ACC because of a change in the discount rate used to measure the ACC unfunded liability.
However, net core Crown debt remains lower than forecast at $5.5 billion even though gross debt is higher than forecast owing to unforeseen issues of Residential Mortgage Backed Securities and Treasury Bills as well as higher than forecast derivative liabilities.
Signup to free NBR email alerts here
Back to home
Back to top
Print
Email
Share
Delicious
Digg
StumbleUpon
Reddit
Google
Yahoo
Technorati
Scoopit
NBR SERVICES
SUBSCRIPTIONS
Sign up for NBR subscriber content or email alerts
Latest
Comments and questions6
Re:
"unforeseen issues of Residential Mortgage Backed Securities and Treasury Bills as well as higher than forecast derivative liabilities."
What is the govt. doing dabbling in exotic financial instruments like these? Have they turned themselves into an Investment Bank since Mr. Key took over?
Why can't they just stick to letting us keep our taxes to a minimum instead of blowing it at the bankers derivative betting shops?
I'm sure that if you look properly into the current state of affairs you will see that it was the previous Labour lead govt. that has positioned us so very nicely for where we now stand. The $4.9b relating to options taken by Labour as with the ACC $2.4b loss that Labour also managed to hide away until they were no longer able to.
There's a fine line between rationalisation and defense. How long will the new government and its supporters blame the old government? Let's see some action!
BTW, a financial crisis seems entirely the wrong time for Key to cancel the Buy NZ Made campaign?
And the clock that ticks towards the day NZ is owned by Australia slowly edges towards 12. Time is not on your side NZ.
It didn't happen in the 30's, or 80's, and it won't happen now.. or anytime soon.
It might seem like the Ozzy banks are having their way here, but it only seems that way.
I'm sorry, Realist, but since when was the Treasury Bill an exotic security?
And for that matter, as far as my knowledge extends, a mortgage based security ain't that obscure either. While there are interesting secondary mortgage markets, they aren't prelevant in NZ and I doubt that they are what is being referred to.
Post new comment or question
To share this article, click on a service below