Government accounts slide further into the red
The government's deficit has climbed again, even though the overall tax take is up on the same period last year.
However, it is well under forecasts, the only consolation being government spending is also down on expectations, although not enough to stop the deficit rising.
Monthly financial data from the Treasury released today shows an operating balance before gains and losses (OBEGAL) deficit $395 million higher than forecast, at $5.5 billion for the eight months of the financial year so far.
The tax take was $1.2 billion below forecast, a drop offset to some extent by $1.4 billion lower spending than expected.
There has also been a $450 million increase in Earthquake Commission-related spending after the December 23 earthquake in Christchurch.
The reduction in tax revenue appears to be the result of a more sluggish than expected economy.
"Source deductions" – mostly wages and salaries – are $200 million below forecast, and GST is $389 million below what was expected, although once the earthquake-related insurance refunds are taken out GST is close to forecast.
Company tax, always the most difficult to forecast, is $193 million below the budget figures because of lower company profits.
However, the issue appears in part to be the accuracy of the forecasts.
Company tax revenue is actually ahead of what it was at the same time last year at $4.732 billion compared to $4.217 billion, despite the overall economy performing better in the recent period than it did for the eight months to February 2011.
Overall, the tax take was actually nearly $2 billion up on the same period last year, at $35.0 billion compared to $33.35 billion.