Finance Minister Nicola Willis. Photo: RNZ / Samuel Rillstone
- Budget deficit larger than expected at end of October
- Tax take lower than forecast on lower company, provisional receipts
- Expenses also marginally lower
- Forecasts to be updated on 16 December in half-year economic update
The government's finances were slightly worse than expected a third of the way through the financial year as the tax take fell more than expenses.
Treasury figures, excluding ACC finances (OBEGALx) showed a deficit of $4.9 billion for the four months ended October, about $700m higher than forecast in May's budget. The deficit including the ACC finances (OBEGAL) was $439m higher than forecast at $5.2b.
The department said the finances were mixed, continuing the trend of recent months.
The core tax take was $600m at $39.5b.
"Corporate tax and other individuals' tax revenue were both below forecast (by $0.3 billion and $0.2 billion, respectively) driven by weaker than expected provisional tax, partly offset by stronger-than-forecast terminal tax," Treasury said.
Crown spending was also a mixed bag of overs and unders, coming in at $48.5b, about $200m above forecast.
The costs of the abandoned iReX Cook Strait ferries project occurred earlier than expected and contributed to a $500m overspend on transport expenses, with extra spending also on education policies.
However, they were offset by lower write offs of tax debts, and less spending on foreign aid projects.
Net debt was lower than expected at $186.5b - about 42.8 percent of the value of the economy - which Treasury said was due to a lower debt level at the start of the financial year in July.
The May budget forecast a deficit of $12.1b for the year ended June 2026.
However, the forecasts will be updated in the Half Year Economic and Fiscal Update (HYEFU) due on 16 December.
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