The operating balance for the seven months ended January was a deficit of $394 million, down $4.2 billion on the forecast $3.8 billion.
Dr Cullen said in a statement the accounts reflected weakness in international financial markets and investor concern about the United States economy.
However, for a long time Dr Cullen had preferred the operating balance excluding revaluations and accounting changes (oberac) as his measure of government accounts.
And while he had done that, the oberac had usually been below the operating balance.
Late last year, the language changed to operating balance excluding gains and losses (obegal), which in January was still a healthy $3 billion, down only $633 million on the forecast $3.7 billion.
Yesterday, Dr Cullen chose to focus on the worst result to push his message of fiscal restraint.
‘‘Today's figures are a timely reminder . . . of the strong need for governments to maintain prudent fiscal policy in small, open trading economies such as our own. We know from our history that international shocks can, and do, negatively impact on our economy from time to time.''
The operating result primarily reflected a $2.5 billion lower than-forecast return on the financial asset portfolios of the New Zealand Superannuation Fund, ACC and the Earthquake Commission.
The second-biggest negative contributor to the accounts was a $1 billion more-than-forecast loss on the revaluation of the ACC claims liability.
Analysis of the accounts showed tax revenue was $700,000 below forecast but when adjusted for timing variances, tax revenue was down only $200,000.
Treasury is still forecasting an operating balance of $7.4 billion in June and an obegal of $6.6 billion.
The accounts indicated that the superannuation fund's operating balance was in deficit by $910 million at the end of the seven months.
Dr Cullen said taxpayers needed to be aware the fund was a significant component of the Crown balance sheet that would continue to grow in size.
The fund's returns for the seven months to the end of January were -6.18%. However, since the fund began investing in late 2003 until the end of January, the rate of return on taxpayers' investment in the fund was 11% on an annualised basis - 4.4% above the rate of return that would have been achieved had the guardians of the fund invested solely in 90-day Treasury bills, he said.
Overseas reports yesterday showed the superannuation fund was not the only one suffering from poor returns as the global credit crunch continued.
United States investors punished hedge funds for their worst-ever returns in January by adding only a small amount of new money to these once red-hot portfolios.
Pension funds, endowments and wealthy individuals put $US2.5 billion ($NZ3.2 billion) into hedge funds in January when hundreds of managers faced the credit crisis, sluggish growth and tumbling global stock markets and posted heavy losses, according to TrimTabs and BarclayHedge, which track flows and performance.
The data will be released officially at the weekend.
January's flows are only a little more than the $US2.3 billion added in December and down from $US21.8 billion put in during November.
In October, investors added $US16 billion after putting in $US18.6 billion in September, the figures show.
‘‘We have seen significant slowdowns in flows over the last six months and it got even weaker in December and January,'' Vincent Deluard, a strategist at TrimTabs, said.
He projected the trend would worsen in February, with investors expected to add ‘‘between zero and $US10 billion to hedge funds''.
Because hedge funds are largely unregulated, managers can keep their data secret, prompting industry analysts to closely watch any data for possible trends.
In January, the average hedge fund lost 3%, the biggest monthly loss since the companies began keeping track in 2000.
That meant the credit crisis had been more harmful for hedge funds than the Internet bubble's collapse and the 2001 terror attacks.
Hedge funds again pulled in the lion's share of new money.
