The government's books are $800 million in the red - $1.7 billion lower than forecast - in the wake of the global financial meltdown, according to crown accounts out today.
The government's financial statements shows the crown operating balance was $800m in deficit at September 30, against a forecast surplus of $900m.
Treasury deputy secretary Peter Bushnell said the main reason for the worse than expected result was unrealised losses on government investments as a result of severe turbulence on global sharemarkets.
Those losses were $1.8b greater than expected.
There was also a $400m loss as a result of a drop in the discount rate used for valuing ACC's outstanding claims liability.
The losses were offset by $500m more in taxes than expected, but the overall tax picture was a mixed bag.
Dr Bushnell said corporate tax and GST were $200m and $100m respectively higher than forecast, but that was due to reversals in accruals relating to an earlier period.
Once they were taken out of the mix the GST take was static and corporate tax was about $200m lower than expected.
The operating balance excluding gains and losses (Obegal), which strips out unrealised investment changes, was $900m, $500m higher than expected.
The books show a cash deficit of $3.2b, about $1.1b better than expected. That was put down to $300m in extra petrol taxes as a result of high prices and delays in transferring $700m set aside for the Government's Fast Forward research fund.
Gross debt was $1b higher than forecast at $31.9b, but net debt was $1.4b lower at $2.6b.
