The government department yesterday released figures for the seven months ended January which showed the Government's operating balance was a $5.52 billion loss for the period compared with a pre-election forecast surplus of $2.6 billion - an $8.1 billion turnaround or a 311.8% variance with the pre-election update.
Treasury was closer to predicting core Crown revenue coming in at $34.9 billion, down 2.4% on its pre-election update.
Expenses were almost right on target with only a 0.2% variance in predictions.
However, the New Zealand Superannuation Fund operating balance came in at a $2.8 billion loss compared with a forecast surplus of $549 million.
Treasury deputy secretary Peter Bushnell said tax revenue and receipts were tracking more in line with the December update, but below the pre-election update.
"We expect to continue to track more closely with the December update through the 2008-09 fiscal year as the continued deterioration in the world economic situation flows through to the New Zealand economy."
Finance Minister Bill English said the recession and a further deteriorating in ACC's outstanding claims liability showed through in the Crown's accounts.
"It is encouraging to see tax revenue and receipts tracking more in line with the December update than they were in the previous month.
"We expect the deteriorating global economic and fiscal situation to be reflected in the Crown's finances through 2009."
The budget in May would take a responsible approach to managing the position the Government had inherited and would set out a credible plan for the medium to long term, he said.
In notes to the accounts, corporate tax revenue was reported as $412 million (7.8%) lower than forecast in the pre-election update.
The variance largely related to less-than-forecast terminal tax assessments due to lower-than-expected final profits generated in the previous tax years.
GST revenue was $193 million (2.7%) lower than forecast and tax revenue from the super fund was $209 million lower than forecast, due to the fund's performance.
The super fund's investment return for the month of January was 3.24%. The fund's annualised return since inception in September 2003 was now 3.27% compared with 6.88% for the risk-free Treasury bills.
ACC and the Earthquake Commission both suffered losses on their investments that were larger than expected. ACC lost $252 million in the period and the commission lost $102 million. ACC also recorded a $3.1 million loss in the valuation of its outstanding claims liability.
The Government Superannuation Fund recorded a $989 million loss arising from a valuation of its assets and liabilities.
Social security and welfare payments continued to rise in the year ended January, reaching nearly $11 billion, up 6.5% on the previous corresponding period.
Health expenses rose 9.6% to $7 billion and education expenses rose 9.5% to nearly $6 billion.
Core government services rose 17.3% to $992 million, economic and industrial services rose 23.3% to $1.84 billion and primary services rose 25% to $309 million.
