The "brittle fiscal position" facing the Government is underscored by figures published today showing tax revenue lower than forecast for the nine months to March, Finance Minister Bill English says.Without one-off gains from structured finance
The "brittle fiscal position" facing the Government is underscored by figures published today showing tax revenue lower than forecast for the nine months to March, Finance Minister Bill English says.
Without one-off gains from structured finance transaction settlements with the banks, underlying tax revenue was $900 million -- or 2.4 percent -- below forecast in the nine months, Mr English said.
"This shows through across company tax, provisional tax payments by individuals and source deductions.
"We now expect this revenue to remain below forecasts throughout the rest of the current fiscal year -- and probably into the 2010/11 year," he said.
"Just two weeks out from the budget, it underscores the brittle fiscal position faced by the Government and how finely balanced the situation is."
A "slightly better" economic outlook would take time to feed into the Government's books, Mr English said.
It would not bring any dramatic changes to the budget's fiscal forecasts.
"There may be slightly stronger revenue from some areas and slightly lower spending on income support, but nothing that significantly eases our medium term fiscal pressures -- namely several more years of budget deficits."
The Crown accounts showed the operating balance excluding gains and loses (Obegal), which strips out unrealised investment gains or losses, for the nine months to March 31 was a deficit of $5.27 billion, or 9 percent better than the forecast in December's fiscal update for a deficit of $5.79b.
The Treasury said the smaller deficit was largely because government expenses were 1.7 percent below forecast, while total revenue fell only 1.4 percent.
Corporate tax take was 8.2 percent down on forecast although that was partly offset by a 3.7 percent rise in the indirect goods and services tax.
The net operating balance was a deficit of $1.33b, $2b or 60 percent less than forecast, on higher investment returns.
Net government debt stood at $25.63b, which was 13.8 percent of gross domestic product and fractionally higher than forecast.
The Treasury said gross debt of $50.4b was NZ$2.4b lower than forecast, largely because the issuance of Treasury bills was reduced to meet lower market demand.
