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Govt surplus balloons to $800m more than forecast

Author
NZ Herald,
Publish Date
Tue, 13 Feb 2018, 10:25AM
Core Crown tax revenue was $37.2 billion for the six-month period, Treasury said. (Photo / Getty)
Core Crown tax revenue was $37.2 billion for the six-month period, Treasury said. (Photo / Getty)

Govt surplus balloons to $800m more than forecast

Author
NZ Herald,
Publish Date
Tue, 13 Feb 2018, 10:25AM

New Zealand snared $600 million more tax than expected in the second half of 2017, according to statements released by Treasury today.

With the government books opened today it reveals the Labour administration has inherited a booming economy.

This includes a slightly larger than expected operating surplus of $1.1 billion for the last six months of 2017.

When combined with higher than expected Crown entity results, the surplus was $800 million more than forecast, Treasury said on Tuesday.

Core Crown tax revenue was $37.2 billion for the six-month period.

Overall core Crown tax was $600m higher than what was expected in the Government's half-year economic and fiscal update, released in mid-December.

Tax sent straight to IRD was $300m more than expected and the GST take was and $200m more than expected.

Core Crown expenses were $39.6b - slightly higher than the $39.5b forecast.

The New Zealand economy will slow this year as labour constraints, changes in government infrastructure investment and lower dairy prices bite, economic research group Infometrics said this month.

"Lower levels of business and consumer confidence could also negatively affect business investment and household spending during 2018," said Infometrics chief forecaster Gareth Kiernan.

Infometrics now sees GDP growth slowing through the year to 2.6 per cent by early next year - compared with earlier forecasts of accelerating growth.

Prior to this latest report Infometrics had been forecasting GDP growth averaging 3.4 per cent a year during this year and next.

While far from apocalyptic, that could put New Zealand's growth track below that of global expectations of around 3.1 per cent this year which could have implications for investment and the New Zealand dollar.

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