Government coffers fill up faster than predicted

Just three months into the financial year and the Government's coffers are filling twice as fast as Treasury predicted prior to the election.

The Government's financial statements for the three months ending September show that the operating balance surplus was running at $2.6 billion.

In the run up to the election Treasury forecast the surplus would be at $1.3 billion by this stage.

The doubling of the surplus is mostly made up from investment gains by Crown agencies such as the New Zealand Superannuation Fund and ACC.

Once these gains and bookkeeping items are removed from the accounts then the surplus was still running at $1.8 billion, $500 million more than forecast prior to the election.

Treasury's notes with the accounts said investment returns were volatile in nature and early indicators in October showed that the September's results were partially reversing.

Other reasons for the booming surplus were government expenses being $261 million less than forecast and tax revenue being $135 higher.

Net Crown debt was down $565 million on forecast to $10.3 billion or 6.9 per cent of GDP.

Overall the Government was taking in more money and spending more than compared to a year ago.

Tax revenue was $1 billion (9.3 per cent) higher than the first three months ending September 2004.

This was mainly due to economic growth flowing through to more jobs, higher pay and bigger profits.

Government spending was also up $1 billion (9 per cent) with welfare payments up $272 million due to the indexation of benefits, though this was partially offset by less people being on the dole.

Health and eduction expenses were also up due to increased funding flowing through to hospitals and schools

- NZPA