Increased government spending in the eight months to February did nothing to help reduce the Government's operating deficit which ballooned out by $4.7 billion to nearly $9.2 billion in the period.
Core Crown revenue increased slightly in the eight months to $36.6 billion compared with $36.2 billion in the previous corresponding period.
The accounts released by Treasury yesterday showed core Crown expenses increased by 7.2%, or nearly $3 billion, to $44.3 billion.
The operating balance excluding gains and losses (obegal) was $9.2 billion compared with $4.5 billion in the previous period.
Investment markets helped the accounts substantially. Total gains for the period were $6.5 billion, a gain of $3.7 billion on the previous corresponding period.
That left the operating balance at $2.5 billion, still up 53.1% on the previous period, but not as much as it could have been without the New Zealand Superannuation Fund and ACC investments benefiting from booming international markets.
Social security and welfare remained the largest expenditure by the Government, rising 3.6% in the eight months to more than $14 billion.
Health spending rose 4.5% to $9.1 billion and education rose 1.2% to $7.5 billion.
Core government services rose nearly 18% to $2.5 billion, transport and communications spending rose 15.1% to $1.5 billion and primary services spending rose 101.2% to $1.3 billion.
GST was down $61 million (0.7%) from forecasts, reflecting continued subdued household spending.
The operating deficit was $1.7 billion higher than forecast, with the February earthquake adding net costs of $1.5 billion being provided for by the Earthquake Commission.
The New Zealand Superannuation Fund reported gains on its investment nearly $2.3 billion above forecast. ACC and the EQC also experienced gains on their investments of $788 million due to strong equity markets.
Also, ACC and GSF experienced favourable changes in claims and the discount rate to calculate the present value of the future expected payments.
Those two factors resulted in a gain for ACC of more than $1 billion, $1.9 billion higher than a forecast loss of $853 million, and a gain for GST of $288 million, $144 million higher than expected.
