Update on Government's finances shows slight surplus

The Government is welcoming a surplus of $100 million for the five months to November after Treasury gave a financial update today.

File image of $50 and $100 notes. Source: 1 NEWS

The surplus is $0.7b billion more than the deficit forecast in the December 2019 Half Year Economic and Fiscal Update.

A statement by Treasury said the bump in the five months ending November 30, 2019 was due to tax revenue and favourable core Crown expenses.

Tax revenue came in 1 per cent above forecast at $0.3 billion and core Crown expenses of $37.9 billion was $0.2 billion (0.6 per cent) below forecast.

Net core Crown debt was $61.7 billion (20.1 per cent of GDP), which was $0.1 billion higher than forecast. The Budget Responsibility Rules of keeping debt below 20 per cent were loosened last year to between 15-25 per cent.

Gross debt sat at $89.4 billion.

Finance Minister Grant Robertson said "while the month by month results do tend to fluctuate due to tax timing changes, it is pleasing to see this positive result".

Mr Robertson said the upcoming $12 billion infrastructure announcement was due to the current low borrowing costs.

"This package of infrastructure projects will provide further support to boost the New Zealand economy in the face of slowing international growth and global headwinds.

"It will also give certainty to the construction industry about upcoming infrastructure projects and will create more opportunities for Kiwis."

The Government announced one part of the package last year, giving schools $700-a-student to fix run-down buildings and equipment in a $400 million fast-tracked infrastructure package.