The Government’s books were stronger than expected as the economy continues to recover post COVID lockdown, the Finance Minister Grant Robertson says.
The Crown Accounts for the three months to the end of September show a lower than forecast deficit due to a better than expected tax take.
“Tax revenue was $2.1 billion above the PREFU 2020 forecast. $1.2 billion of that total came from GST showing consumers were spending, reflecting their confidence in the economy.
“The Treasury also reports source deduction revenue was better than forecast as salary and wage income for the period was better-than-expected, helped by the extension of the Government’s Wage Subsidy Scheme.
“Core Crown expenses were $1.1 billion below forecast, and the operating balance before gains and losses (OBEGAL) was $3.3 billion less than forecast,” Grant Robertson said.
“Net core crown debt was 30.5% of GDP, also better than the PREFU forecast of 31.7% of GDP. This compares to the average for advanced economies before COVID of about 80%. Debt servicing costs remain low and are forecast to stay that way.
“The Government’s decision that the best economic response to the COVID-19 pandemic was a strong health response has proved time and again to be the right one.
“There was no playbook for this health crisis, and we acted swiftly as the situation unfolded to support our businesses and workers. Those decisions helped us keep kiwis in jobs and mean we are now in a strong position to drive the economic recovery,” Grant Robertson said.