Nov. 7 (BusinessDesk) – The New Zealand government’s operating deficit was wider than forecast in the first quarter of the financial year as the Crown took in less tax than expected in a subdued economy.
The operating balance before gains and losses (obegal) was a deficit of $2.1 billion in the three months ended Sept. 30, $449 million, or 27 percent bigger than forecast. Core Crown tax revenue was $13.5 billion, or 2.1 percent lower than expected, the Treasury said.
Source deductions and goods and services tax were $166 million apiece below forecast, reflecting lower-than-expected wage growth and private consumption, it said. Provisional tax was $103 million below forecast.
Core Crown spending was 1.1 percent below forecast at $17.3 billion, with under-spending on welfare, education and finance costs. These were offset by higher-than-expected earthquake expenses.
The operating balance including gains and losses was a surplus of almost $100 million, or $1.2 billion better than expected, reflecting gains from the NZ Superannuation Fund and the Accident Compensation Corp’s investment portfolios.
Gross debt amounted to $79.3 billion, or 38.8 percent of gross domestic product. Net debt was $54.9 billion, or 26.9 percent of GDP.
Banks have reaped an extra $2.1 billion in the past four years by not passing on interest rate cuts to credit card …