Crown tax take down 10pc at three-quarter mark of financial year

Three-quarters of the way through the Crown's financial year its tax revenue is running 10 per cent lower than it was a year ago, while Government spending is 4.4 per cent higher.

Reflecting the recession's lagged impact on profitability, the company tax take year-to-date is $1.4 billion or 29 per cent down on the same period last year, even with a one-off boost of up to $400 million from settlement of a large tax dispute with the banks.

Tax from "other persons" - mainly the self-employed - is down 18 per cent.

On the spending side social security payments, which include superannuation, are 10 per cent or $1.5 billion higher than a year ago, reflecting indexation and an increase in beneficiary numbers. The other main spending increase is $700 million or 8 per cent on health.

On the other hand the Government's interest bill at $2.4 billion so far this year is $400 million lower than in the same period last year - relief that is likely to prove temporary.

The net effect is an operating deficit, before gains and losses, of $5.3 billion, which suggests that if the Government undershoots the full-year forecast deficit of $7.5 billion it will not be by much.

When valuation gains and losses are included, however, the numbers look much better than a year ago.

The $4.1 billion writedown of Crown financial assets last year, in the immediate wake of the global financial crisis, has been entirely reversed in the latest period.

And the $3.6 billion increase in the actuarial valuation of the Crown's future obligations to ACC claimants and public servant pensioners last year is just $154 million this year.

Finance Minister Bill English said the accounts underscored how brittle and finely balanced the fiscal position faced by the Government is.

"The slightly better economic outlook will take time to feed into the Government's books. It certainly won't bring any dramatic changes to the Budget's fiscal forecasts, compared to the half-year update in December," he said.

"There may be slightly stronger revenue from some areas and slightly lower spending on income support, but nothing that significantly eases our medium-term fiscal pressures - namely several more years of Budget deficits."

Relative to the Treasury's forecasts last December, tax revenue is $900 million or 2.4 per cent below forecast (excluding the bank tax windfall), offset by expenses being $800 million or 1.7 per cent lower than forecast (half of which is Treaty settlements being delayed until the next financial year).