Crown posts surplus of nearly $6bn

The Government surplus swelled to nearly $6 billion in the first five months of the financial year, Treasury said today.

The Crown accounts to November 2005 show the operating surplus was $5.6 billion, $1.4 billion higher than forecast.

The Government coffers were boosted by a gain of about $600m on state-owned power company Meridian Energy's sale of its Australian subsidiary, Southern Hydro.

Meridian sold Southern Hydro to Australian Gas Light (AGL) on October 31, for A$1.425 billion ($1.58 billion).

The accounts also included above average investment returns from the New Zealand Super Fund of about $300m and Government Super Fund of $100m.

Tax revenue was $100m higher-than-forecast, and delays in departmental spending added $200m.

Treasury is currently forecasting the operating balance will peak in April at $6.1 billion, before falling to a surplus of $5.6 billion in June.

Several big spending election policies -- including Labour's interest free student loans and its Working for Families package, come into force around that time.

Crown revenue in the five months to November totalled $24 billion, 10 per cent ahead of the same period last year, with expenses of $19.77 billion, up 8.1 per cent on a year earlier.

The biggest rises in spending came from social welfare payments, which rose 8.4 per cent, or $496m to $6.4 billion; health expenses, up 6.4 per cent, or $231m, to $3.86b; and education, up 4.3 per cent, or $141m, to $3.4b.

The operating balance before revaluations and accounting changes (OBERAC), which strips out unrealised investment gains, was $4.63 billion, $359 million above forecast.

Net government debt stood at $9.1 billion or 5.9 per cent of GDP, below last month's Half Year Economic and Fiscal Update forecast of 7 per cent of GDP.

The government's net worth, the difference between its total assets and liabilities, was $1.38 billion above forecast at $55.6 billion.

- NZPA