Finance Minister Bill English was yesterday provided with a near-perfect platform to release his cost-cutting Budget next week when the latest Government accounts were released.
The Crown's operating balance before gains and losses was a deficit $10.2 billion for the nine months ended March, nearly 15% higher than forecast in the December half-year fiscal update, figures released by Treasury showed.
The $10.2 billion deficit was nearly 93% higher than at the end of March last year and had included an extra $1.5 billion of earthquake-related costs.
Analysis of the accounts showed the reported deficit of $3.3 billion, which was $3.8 billion lower than forecast, would have been much higher were it not for significant unforeseen gains in Crown investments through the New Zealand Superannuation Fund and ACC.
The super fund reported gains on its investments $2.22 billion higher than forecast. ACC and the Earthquake Commission also had higher-than-expected gains on their investments of $644 million due to strong equity markets.
Also, ACC and the Government Superannuation Fund appeared to have fewer claims than expected. ACC had a paper gain of $1.15 billion in the period - $1.98 billion higher than the forecast loss of $837 million. GST had a gain of $287 million, $144 million higher than forecast.
The financial impact of the $500 million AMI support package was not included in the latest financial statements.
Mr English said the Budget on May 19 would set a credible path back to budget surplus.
"The Budget next week will confirm a very large deficit for the current year, including the immediate costs of rebuilding Christchurch.
"But it will also confirm significant improvements in the fiscal position over the next few years before we return to surplus and start repaying debt."
To achieve that, the Government had completed a careful and balanced review of its spending priorities which it would outline in the Budget, he said.
