The government’s finances are in much better shape than expected as strong domestic spending and company earnings underpin the tax take.
Official figures show a deficit of $4.3 billion for the five months ended November, $546 million less than forecast in the December fiscal update.
The lift in consumer spending continued, but at a slower rate, with GST revenue $400m above forecast.
Income and corporate tax revenue were also $300m higher than expected.
“This indicates that the 2020 income tax year was not as adversely affected by the Covid-19 pandemic as was expected, which the Treasury said showed companies had not been as hard hit by Covid-19 as expected,” Treasury said.
The net debt level grew to $98.9b, 30.9 percent of the value of the economy compared to a forecast 31.1 percent.
The December update forecast a budget deficit of $21.6b for the year ended June.
“The country is in a stronger fiscal position compared with other developed nations, and we will carefully prioritise our spending to maintain the balance between short-term needs and long-term requirements,” Finance Minister Grant Robertson said.
“This year our focus is on continuing that momentum, while also tackling some of the long-term challenges facing New Zealand – housing, climate change and child poverty.”