The surplus was $414 million last year and in May’s Budget, Finance Minister Bill English was talking about a surplus of about $700 million for the June financial year.
The Half-Year Fiscal Update will be released on December 8, giving a better idea of how much money the Government will have to play with for the 2017 election.
But, given how inaccurate the Treasury forecasts have been, it will be no surprise if the surplus is well ahead of the December updates when the books are finally balanced in June.
The Government will have the choice of cutting personal and corporate taxes, increasing spending or reducing debt.
Mr English is likely to consider all three equally before making his final decision, although it appears he will have enough money to do all three.
The Crown accounts showed core Crown expenses were below 30% of gross domestic product (GDP) for the first time since 2006, net debt at $61.9 billion had stabilised to 24.6% of GDP and net worth had grown to $89.4 billion in the year under review.
The economy grew by a nominal 4.2% in the year to June to $251.8 billion.
Total wage and salary income grew strongly during the year.
Average wages and employment were both up by more than 2%.
Total hours worked increased by an estimated 3%.
The Treasury said the robust economic growth was reflected in private consumption growth of 3.5%, plus strong contributions to economic growth from residential construction and inbound tourist spending.
The total population grew by 2%, boosted by a net influx of nearly 70,000 migrants in the year.
Mr English said the $1.8 billion surplus, compared with a forecast of $176 million in Budget 2015, was a significant turnaround on the $18.4 billion deficit in 2011, following the global financial crisis and Canterbury earthquakes.
"Government surpluses are rising and debt is falling as a percentage of GDP, which puts us in a position to be able to make some real choices for New Zealanders."
The New Zealand economy had made significant progress over the past eight years, he said.
More jobs and higher incomes had been delivered for New Zealanders, driving a greater tax take to help the Government books.
The Government remained committed to maintaining rising operating surpluses and reducing net debt to about 20% of GDP by 2020.
"The outlook for the economy is positive, the Government’s books are in good shape and we are addressing our toughest social problems.
"However, we also need to bear in mind there are a lotof risks globally and that iswhy it is important to getdebt levels down."
Budget 2017 would make positive long-term choices to strengthen the economy and communities, Mr English said.
Labour finance spokesman Grant Robertson many Kiwi businesses and workers would be asking themselves if they were receiving their fair share of growth in the economy.
Getting an operating surplus was a basic fundamental in the economy and New Zealanders from all walks of life, who had put in the long hours and the hard work to get there, would be pleased to see it.
"It is all well and good to be pleased about a surplus but when there are children living in cars and garages, older New Zealanders in pain waiting for operations and school funding going backwards, the Government needs to take a hard look at its priorities."
At a glance
• Operating surplus $1.8 billion
• Tax revenue was up $3.8 billion from a year earlier at $70.4 billion
• Core Crown expenses were $73.9 billion, below the forecast $74.5 billion
• Tax cuts are likely to be announced next year
