No alarm bells as Books are on track with forecasts
Wellington, December 5, 2017
The Government’s financial statements for the four months to October 31, 2017 indicate that the books are tracking along with Treasury’s Budget forecasts.
Core Crown tax revenue during the first four months of the year came in near expectations, at $24.2 billion. Core Crown expenses of $26.6 billion were slightly ahead of forecast as some expenditure was recognised earlier in the financial year than previously expected.
The Government’s Operating Balance Excluding Gains and Losses (OBEGAL) was a deficit of $308 million, close to the forecast deficit of $217 million. As Treasury notes, it is not unusual for the OBEGAL to be in a small deficit or surplus in the first part of the financial year.
With investment gains and losses added to the OBEGAL, the Crown’s operating balance after the four months was $2.1 billion – $1.4 billion above forecast.
Net core Crown debt stood at 22.9% of GDP at the end of October.
This Government has committed to a responsible target of reducing net debt to 20% of GDP within five years of taking office. This is two years slower than the previous government, and is essential for investing in key areas such as health, education and housing as we look to close the social and infrastructure deficits which have appeared in recent years.
Monthly Economic Indicators
Treasury on Monday also released its Monthly Economic Indicators, which included reports on engagement with the business community last month, with a focus on construction and tourism. This government is dedicated to ramping up construction skills training, and will also ensure businesses facing genuine skills shortages will be able to access skilled migrants to fill those gaps through a more targeted immigration system.
I look forward to further engaging with the business community on this Government’s plans. We will be an active partner in the economy, boosting infrastructure investment, skills training, and research & development.
Auckland Chamber Meeting
I will be speaking further on our plans in an address to the Auckland Chamber of Commerce on December 11, 2017. This will come ahead of the Treasury’s latest forecasts for the Government’s finances and the economy at the Half Year Economic and Fiscal Update (HYEFU) on December 14, 2017.
The Government will also release a Budget Policy Statement at the same time, highlighting our priorities as we work towards Budget 2018.
Grant Robertson is Finance Minister of New Zealand.