End of year audited Crown accounts for the year to June 2021 show the operating balance before gains and losses (OBEGAL) was $4.6 billion in deficit – $10.6b better than the Treasury forecast in Budget 2021.
Core Crown tax revenue came in at $98b which was $12.9b higher than last year and $6.4b higher than forecast in the Budget.
Net core Crown debt was 30% of GDP at the end of June, below the 34% forecast. The average for advanced economies is above 90% net debt.
Finance minister Grant Robertson says a strong labour market and consumer confidence have driven the increase in tax revenue. This included increases in company tax, GST and source deductions (PAYE).
“On almost every indicator the accounts show that the New Zealand economy has performed better than forecast, even as recently as the Budget in May.
“It shows a strong rebound from the first lockdown in 2020, and bodes well for emerging from the current outbreak,” he says.
“The decisions we made during last year’s COVID outbreak with economic support and health measures meant the economy bounced back better than almost anyone predicted.
“That strength has given us the fiscal headroom to support businesses and households when the Delta outbreak struck.
“As all countries around the world have done, we have had to take on some debt to support businesses and workers through this COVID-19 pandemic – any responsible Government would have done the same thing,” Robertson says.
“However the level of debt remains lower than expected and far lower than most of our international counterparts. In addition the cost of servicing that debt also remains very low by historical standards,” he says.
“We will continue to take a balanced approach, investing heavily to support wellbeing, our transition to being a low carbon economy and to improve productivity, while carefully managing our resources with an eye to the long term sustainability of the economy.”
The Budget Policy Statement and Half-Year Economic and Fiscal Update will be released on December 15.
