Updated accounts from the Treasury release this morning show the operating balance before gains and losses for the five months to November was $4.48 billion, which was $252 million (6.0%) higher than forecast.
The government's books are running a deeper shade of red than forecast.
Updated accounts from the Treasury released this morning show the operating balance before gains and losses for the five months to November was $4.48 billion, which was $252 million (6.0%) higher than forecast.
Add the gains and losses in and the figure is higher: $9.92 billion, a whopping $2.83 billion (39.9%) higher than forecast.
That is due to some large losses on the government's financial bodies: a $1.04 billion loss on the Government Superannuation Fund and a $898 million increase in Accident Compensation Corporation liabilities.
Although corporate tax revenue is running ahead of forecast - by $210million or 7.1% - this is offset by a lower tax take from personal income tax and GST.
"Source deductions" - a combination of personal income and related taxes - are $394 million (4.4%) below forecast, while GST is $309 million, or 5.1%, lower than expected.
These forecast figures are taken from the pre election economic and fiscal update (PREFU) which were lower than the forecasts in budget 2011, delivered in May.
Yesterday Prime Minister John Key indicated the government might not reach its target of returning to surplus by the end of the 2014/15 financial year.
The commentary from the Treasury which accompanied this morning's figures says some of the current shortfall in tax revenue may reverse out by the end of the financial year but not all of it will.
"The source deductions and GST revenue variances were mainly timing‐related and are expected to reverse; however there is a risk that some of the GST variance may not reverse by year end," says the commentary.
About half the GST drop is due to the timing of refunds to insurance companies relating to the Canterbury earthquakes, the Treasury says.
The higher corporate tax take reflects higher corporate profitability over that period, but this will drop as GDP for the December quarter was lower than forecast in the PREFU.
Core government spending, meanwhile, is $399 million or 1.4%, below forecast, but much of this is expected to reverse out over coming months as it is mostly due to deferments of expected outlays for Waitangi settlements and transport projects.
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