The Government has delivered a $5.5 billion surplus, the Finance Minister has announced today.
Grant Robertson says a strong surplus and falling net debt reflect a growing economy and show the Coalition Government is managing the books responsibly.
"The books show we are meeting the Budget Responsibility Rules. A headline $5.5 billion surplus operating balance before gains and losses is $2.4 billion above the Treasury’s Budget 2018 forecast," Mr Robertson says in a statement today.
"A number of factors contributed to this result being ahead of Budget 2018 expectations. A number of one-offs led to core Crown expenses coming in 1.4 percent below forecast at 30 June 2018. The Treasury says that this was largely due to timing issues, meaning much of this variance is set to reverse out in the 2018/19 accounts. Core Crown expenses were stable at 27.9 percent of GDP.
"A strong economy contributed to core Crown tax revenue coming in 0.9 percent higher than expected in the year to 30 June 2018. Corporate tax revenue was up, due to profits for both large and small businesses being higher than the Treasury had forecast at Budget 2018. This result indicates the strength of the growing economy.
Mr Robertson says employment rose by 3.7 per cent over the year and average wages rose three per cent.
"Net capital investment of $5.9 billion in the year was the highest since 2009 and an increase of $2.2 billion from the previous year," Mr Robertson says.
"This included investments in hospitals, schools and state highways, while also reflecting the Coalition Government’s move to resume contributions to the NZ Super Fund.
"We are committed to a balanced approach by adopting a responsible debt reduction track. At 30 June 2018, net core Crown debt was 19.9 percent of GDP, compared to the 20.8 percent forecast in Budget 2018.
Mr Robertson says the Government is committed to the Budget Responsibility Rule that net debt will be 20 per cent of GDP in 2021/22.