KEY POINTS:
The New Zealand government's operating financial balance improved in February but was still well below forecast, the Treasury reported today.
The balance for the eight months to February 29 was a surplus of $1.43 billion, $3.34 billion or 70 per cent below forecast because of a lower tax take, investment losses, and a rise in workplace accident insurance liabilities.
Last month, the Treasury mistakenly reported the government had posted an operating deficit for the first time in nearly 15 years because it understated tax revenue by $600 million. The revised balance was a surplus of $198 million.
The operating balance excluding gains and losses (OBEGAL), which strips out unrealised investment gains, was a surplus of $4.15 billion, $405 million lower than forecast.
Net government debt stood at $1.86 billion, which was $76 million higher than forecast, equating to 1.1 per cent of gross domestic product.
The government's net cash position, the difference between all income and spending - operational and capital - was a surplus of $1.30 billion compared with a forecast of $1.39 billion.
The Treasury forecast an operating surplus of $7.39 billion for the fiscal year to June 30, 2008 in the government's half year economic and fiscal update in December.
The turmoil in financial markets resulting from the subprime mortgage problems has been reflected in a fall in the balance of the New Zealand Superannuation Fund, the government's centralised fund to pay for future pension costs.
The New Zealand government will release its annual budget for the 2008/09 fiscal year on May 22, and must also publish a special updated fiscal report ahead of this year's general election.
- REUTERS
