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New Zealand has had a relatively soft landing from the pandemic, according to the latest Crown accounts.
The accounts, which span the five months ending November 30, 2020, still show an OBEGAL deficit of $ 4.3 billion, but that’s a total of $ 1.9 billion better than the deficit forecast in the Treasury’s latest set of forecasts, the Mid-Year Fiscal and Economic Update. or HYEFU.
Those forecasts were also finalized on November 30, 2020, which means that by the time they were released in December, they were already off target by billions of dollars. However, this could change as the year progresses and expenses increase.
It is not the first time that the strength of New Zealand’s recovery has defied expectations. Last year, the Crown accounts exceeded previous Treasury forecasts, printed in BEFU and PREFU (the Pre-Election Budget and Economic and Fiscal Updates).
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The Crown’s net core debt stands at 31.1% of GDP or $ 98.9 billion, which is $ 860 million better than expected.
The difference between the economic forecasts and what actually happened is due in large part to a strong economic recovery, which has made tax collection higher.
ROBERT KITCHEN / Things
Finance Minister Grant Robertson. Government accounts are billions of dollars better than anticipated.
Core tax revenue for the Crown over the five months was $ 37.6 billion, a $ 700 million better than expected. The biggest contributors to that were GST and corporate tax revenue, which came in at $ 400 million and $ 300 million above forecast.
Meanwhile, Crown’s core expenses were $ 44.4 billion, $ 500 million below the forecast. The Treasury has said that part of this could be because some of the government’s spending programs were delayed.
“The variation was divided among several entities, with expenses lower than expected mainly due to the delays experienced in the work programs that have been affected by the Covid-19 pandemic,” said the Treasury.
Finance Minister Grant Robertson praised the accounts.
“Government support for New Zealand businesses and workers during the Covid-19 pandemic has helped the economy recover quickly.
“This year we are focused on continuing that momentum, while tackling some of the long-term challenges New Zealand faces: housing, climate change and child poverty,” said Robertson.
“The country is in a stronger fiscal position compared to other developed nations, and we will carefully prioritize our spending to balance short-term needs and long-term requirements.
“New Zealanders trusted us to keep them safe last year, and we will continue to make the tough decisions necessary to do so, while keeping the economy moving in the right direction,” he said.
