26 Jan 2017

Govt deficit almost $1 billion smaller than expected

1:32 pm on 26 January 2017

The government is in better financial shape than expected, posting a deficit of almost $1 billion smaller than forecast.

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Photo: 123rf.com

The deficit for the five months to November was $768 million, compared with a forecast $1.7 billion, on the back of a strong tax take and lower expenses.

The government's tax take was $460 million higher than forecast.

That included a 3.3 percent increase in GST and 2.5 percent more corporate tax than intitially estimated, as healthy profits boosted company tax returns and record tourism numbers boosted tax takings.

The Treasury said it was too early to tell whether that was a one-off, or if it would be more permanent.

Although the cost of the Kaikoura earthquakes was estimated to be between $2 and $3 billion, the full costs have yet to be included in the books, meaning Crown expenses were slightly lower than forecast.