The audited version of the Government’s financial statements for the year to June align closely with the unaudited version, published in the Pre-Election Economic and Fiscal Update (Prefu) on September 12.

The effects of inflation heavily affected the economy and therefore the Crown accounts during the year.

The slowing economy (which was partly the result of central banks around the world raising interest rates to curb inflation) saw the Crown’s corporate tax take come in $2.4 billion (or 11.8 per cent) below what the Treasury forecast at the May Budget.

This under-performance was slightly offset by the Crown collecting more income tax revenue than expected, resulting in the Crown’s overall tax take coming in 1.6 per cent below forecast.

Lower-than-forecast tax revenue is largely what prompted the Opposition to attack the Government for having a supposed “fiscal hole”.

On the other side of the ledger, the Crown’s expenses aligned with what was forecast at the May Budget.

Total Crown expenses were 7.2 per cent higher than they were in the year to June 2022, while total Crown revenue was 8.0 per cent higher.

While the Government spent less in the year to June on Covid-related support, the Treasury put much of the cost increase down to high inflation and interest rates, and the severe weather events in the North Island.

The Treasury also pointed to the cost of welfare payments, pegged to wage inflation, which was very strong throughout the year.

Overall, the Crown reported a $9.4b deficit in the year to June - a $600 million improvement on what was reported in the unaudited results released last month.

This difference can partly be attributed to a technical change to the accounting treatment of the Reserve Bank’s Funding for Lending Programme.

The operating balance before gains and losses was $9.7b in deficit in the year to June 2022.

Finance Minister Grant Robertson said: “We are turning a corner towards better economic times.

“We had the second strongest growth in the OECD last quarter and now the final audited annual accounts are $600 million better than expected.”

Jenée Tibshraeny is the Herald’s Wellington Business Editor, based in the Parliamentary press gallery. She specialises in government and Reserve Bank policymaking, economics and banking.