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New Zealand’s economy continues to defy gravity with government accounts showing its books at $ 4.8 billion better than expected.
The economic carnage of Covid-19 meant that the government expected to post a deficit of $ 8.6 billion, as higher unemployment led to lower tax revenue and higher spending.
Instead, the deficit for the four months through the end of October was just $ 3.8 billion.
ROBERT KITCHEN / Things
Deputy Prime Minister and Finance Minister Grant Robertson will celebrate the better than expected numbers.
Core tax revenue for the Crown was $ 29.9 billion, $ 2.9 billion more than anticipated. GST was the big tax winner, as higher-than-expected spending meant that GST’s collection of $ 8.3 billion for those four months was $ 1.6 billion above forecast.
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The expenses are also much lower. The Government has spent $ 35.7 billion in the last four months, $ 1.6 billion less than it expected.
This was mostly due to the cost of the wage subsidy, which was $ 1.4 billion below the forecast.
Finance Minister Grant Robertson said the accounts reflected positive signs in the economy.
“Overall, government accounts are holding up well, which is the result of government action to support the New Zealand economy through a once-in-a-lifetime economic shock,” said Robertson.
Today’s accounts released by the Treasury are the latest in a series of better-than-expected economic data.
Although New Zealand is still mired in a major economic crisis, the unemployment data and the crown accounts have not suffered as much as expected.
Credit card spending has remained high and the unemployment rate, 5.3 percent, is well below forecast.
The Treasury will release its Semiannual Fiscal and Economic Update later this month, which will have more up-to-date and realistic forecasts on the economy going forward.
