Responsible fiscal management in uncertain times

The Government will continue to responsibly manage its finances and build a platform for stronger growth in uncertain times, Finance Minister Bill English says.

The Government’s financial statements for the 11 months to 31 May show core Crown tax revenue was $667 million higher than forecast in Budget 2012 and core Crown spending was $431 million lower than forecast.

This led to an operating deficit before gains and losses of $5.91 billion - $1.13 billion better than forecast.

“This is encouraging, but the global environment remains uncertain, leading to a number of fluctuations in the tax take from month to month,” Mr English says.

“This month’s accounts continue to be better than forecast, due to ongoing spending discipline and better than expected GST and corporate results. But revenue is still $835 million below Treasury’s forecast in the pre-election update last October.

“These fluctuations reinforce the need for the Government to keep a firm control on its costs, so it can stay on track to surplus by 2014/15.

“We have seen moderate strength in the economy over the past year despite considerable disruption from global uncertainty.

“Balancing the books and returning to surplus is one of the most important things the Government can do to build that resilience, as well as take pressure off interest rates and the exchange rate. This helps make our economy more competitive.

“That is why we remain committed to responsibly managing the Government’s finances, while at the same time putting policies in place that support a growing economy, more jobs and higher incomes,” Mr English says.