Although the accounts remained in deficit for the five months ended November, the deficit was nearly $1billion less than forecast at $768million.
The Treasury yesterday released the accounts, which showed the operating balance excluding gains and losses (obegal) was a nearly 55% improvement on the forecast. The operating balance, which includes the gains or losses government agencies such as ACC and the New Zealand Superannuation fund make with investments, was a surplus of $4.7billion, up $3.5billion on the forecast.
Net gains were $5.4billion, $2.6billion higher than forecast, mostly as a result of a decrease in ACC claims liability due to an increase in the discount rate used to convert future cash flows.
In November 2015, the obegal was a deficit of $1.6billion and the operating balance a deficit of $497million, meaning the 2016 balance was nearly $5.2billion better than the same time last year.
Mr Joyce said stronger economic growth was flowing through to the Government’s tax take. Tax revenue for the five months to December was $460million ahead of forecasts in the half-year update and $1.4billion ahead of Budget 2016 forecasts.
Like his predecessor Prime Minister Bill English, Mr Joyce was cautious in his comments.
"It is appropriate to remain very cautious in terms of what the increases tax receipts might mean for the full-year financial result."
The Treasury’s half-year update forecast was for a $473million surplus for the whole 2016-17 year but it was too early to say whether the surplus would be achieved, he said.
The accounts included the first tranche of the Government’s expenses related to the Kaikoura earthquake and just under $700million of the EQC estimates were included. The full cost of the recovery would not be known for some time.
The earthquake again demonstrated the importance of the Government’s prudent financial management, Mr Joyce said.
"Getting back to surplus and repaying debt in the good times means we are in a position to support communities at times like this when they’re in need."
More generally, the accounts underlined the importance of strong fiscal discipline as New Zealand continued to build up its financial resilience in a "relatively uncertain world". The Budget 2016 had only a small surplus forecast for the full financial year, Mr Joyce said.
No Opposition MP made any statement about the Crown accounts.
