The Government remains committed to sound management of its finances and returning to surplus in 2014/15 as the economy continues to grow, Finance Minister Bill English says.
Tax revenue, Government spending and net debt were all slightly lower than expected in the Crown accounts for the three months to 30 September issued today, but these variances are expected to reduce over coming months.
The lower than forecast tax revenue contributed to a slightly larger than expected operating deficit before gains and losses of $2.48 billion for the three months.
"While the deficit is tracking towards the forecast $10.8 billion for the year to 30 June, 2012 – down from $18 billion last year – this is still too high for comfort, especially in the face of ongoing global economic uncertainty," Mr English says.
"As the Reserve Bank Governor reiterated this morning, many countries remain under stress due to an overhang of private and public debt. He noted New Zealand households and businesses have been helping to reduce our external liabilities, but this has been partially offset by rising public debt.
"That is why the Government is focused on getting back to surplus and keeping net core Crown debt below 30 per cent of GDP.
"The deficit is forecast to more than halve to $4.4 billion next year and the Government is forecast to return to surplus in 2014/15.
"But getting there won't be easy. In many ways restraint in the public sector has only just started and getting back to surplus will require ongoing spending discipline for many years.
"The Government is committed to meeting this challenge. We've taken steps to control spending and get on top of debt, while putting in place policies that build a more competitive economy and more real jobs," Mr English says.