Unexplained tax revenue drop for govt
A $301 million drop in expected tax revenue has pushed the government's deficit higher.
A $301 million drop in expected tax revenue has pushed the government's deficit higher.
Figures for the first three months of the governments financial year, released this morning, show an operating balance with a deficits of $2.5 billion, $210 million more than expected.
The main reasons are a $154 million drop in GST revenue, a $63 million drop in corporate tax, and a $85 million drop in other tax revenue. The drop in GST is because price inflation is lower than forecast, according to the financial statement released by the Treasury.
There is also increased volatility due to changes in consumer spending patterns not forecast by the Treasury - including lower spending and higher savings - and also deferred spending from Christchurch residents until long awaited insurance payments come through.
"The variance could increase before shrinking again," says the report.
There are few explanations available for the other drops. Corporate tax usually dips in September, but this was supposedly accounted for in the forecasts. The report notes that since the end of September a number of New Zealand firms have issued profit downgrade announcements, but others have unveiled increases.
"Preliminary data indicates that this negative variance may reduce in October," the report says.
Core Crown expenses are, however, broadly in line with forecasts.
Rob Hosking
Thu, 10 Nov 2011
Thu, 10 Nov 2011
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Unexplained tax revenue drop for govt
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