Higher than expected tax income has contributed to the Government's books showing a lower operating deficit.
The Treasury on Friday released financial statements for the five months to November 2009 which show both GST and corporate tax revenue is 1.4% higher than the November half-year update.
The operating deficit, including gains and losses, is at $1.4 billion, which is $1.1 billion better than forecast.
The Treasury says it is not yet clear whether lower-than-expected revenue from PAYE tax is due to the situation in the labour market or the timing of pay days.
Meanwhile, core Crown expenses were $305 million lower than forecast.
There were also more favourable revaluations of assets and cash flow hedge reserves.
Economy must grow - English
Finance Minister Bill English says the latest accounts show the economy and businesses must grow to improve New Zealand's fiscal situation.
Mr English says incentives must be right for there to be more investment in the economy and an increase in exports.
He says the Budget will respond to a report on changing the tax system which he says is a powerful tool for changing spending and investment decisions.
Mr English says the Government is looking at which options would raise the same amount of revenue and deliver long-term economic benefits.
