KEY POINTS:
Three-quarters of the way through the fiscal year, the Government's accounts are on track towards the kind of surplus it forecast late last year.
Even so, little can be inferred from them about the affordability of tax cuts in the Budget. That will depend more on forecasts of growth, and therefore the tax base, in coming years.
For the nine months to March 31, the operating surplus at $1.1 billion was $4 billion lower than forecast, but most of that ($3.5 billion) reflects paper losses by the New Zealand Super-annuation Fund, the Accident Compensation Corporation and the Earthquake Commission.
The remaining $500 million difference reflects tax revenue running $220 million or 0.5 per cent behind forecast, while core crown expenses are $280 million or 0.7 per cent above forecast.
For the nine months, both tax revenue and core crown expenses were 7.3 per cent higher than in the same period a year earlier.
The Crown had a positive operating cash flow of $5.7 billion, of which $1.5 billion went into the Cullen fund, $1 billion into infrastructure investment and $1.1 billion to advances.
That leaves a cash surplus of $2.1 billion. The half-year economic andfiscal update last December expected a cash surplus of $1.6 billon at this stage of the year.
