The Crown accounts are continuing to reflect the strong position New Zealand is in to manage the challenging global environment, Minister of Finance, Grant Robertson said today.
For the nine months to the end of March, the Operating Balance before Gains and Losses (OBEGAL) deficit was $8.1 billion, $4.1 billion below that forecast in December’s Half Year Economic and Fiscal Update.
“This result shows the strong position New Zealand finds itself in despite the uncertainty and volatility of the Ukraine war, the pandemic and ongoing supply chain disruptions in critical trading hubs like China. It is further evidence that our strong health response has been the right one for the economy,” Minister Robertson said.
“There is no doubt that there are significant challenges for families and business right now. But we face those challenges with record low unemployment, good growth levels, lower debt than most and the Government books in a strong position.
Tax revenue was $2.7 billion above forecast at $78.6 billion, due to better-than-expected corporate profits and a strong jobs market. This was partly offset by lower GST returns. Core Crown expenses were close to forecast at $92.6 billion.
Net core Crown debt stood at 36.3% of GDP, $155 million less than forecast.
“Our economy has come through the Covid shock better than almost anywhere else. GDP is up 5.6% from a year ago, unemployment is at a record low, and exports are growing. The recovery is gaining momentum and the easing of restrictions and opening up to skilled workers and tourists will help business and the economy rebuild,” Mr Robertson said.
“2022 continues to be a challenging year for many New Zealanders facing the impact of global inflation and our resilience will continue to be tested as the effects of the Omicron outbreak have yet to be fully accounted for and this will affect the current year’s Crown expenses.
“But our fiscal position is strong. Our debt is substantially below most other nations and we are among a handful of countries which have a Triple A credit rating from the leading ratings agencies.
“The investments made by the Government to keep businesses open and Kiwis in work has paid dividends. Projections of 10% unemployment and an economy going backwards were avoided because of the actions we’ve taken, and our strong economic and fiscal position highlight how successful our plan to keep and support New Zealanders has been.
“Our new fiscal rules will ensure we are taking a balanced approach and controlling spending and targeting at those who need it most, keeping a lid on debt and able to make important investments in infrastructure,” the Minister said.