Government finances in better shape than expected as Treasury records smaller deficit

Thursday, 5 March 2026

Treasury says the Government’s finances are in better shape than they had forecast, for the seven months ending January. (file photo)

The Government’s financial books are in better shape than expected, with the main operating deficit $1.9 billion smaller than anticipated.

The data was out on Thursday with Treasury releasing its financial statements for the seven months ended January 31, 2026.

The operating balance before gains and losses (OBEGAL) showed a deficit of $6b, a figure the Treasury described as overall favourable compared to the December forecasts.

Total core Crown expenses were $1.2b below forecast at $83.1b, reflecting lower spending across multiple functional classifications.

Net core Crown debt reached $184.3b, or 41.9% of GDP. This was $1.1b lower than the forecast based on the 2025 Half Year Economic and Fiscal Update.

Core Crown tax revenue remained broadly in line with expectations at $70.4b. However, total core Crown revenue was $0.4b below forecast at $77.3b.

This shortfall was attributed to lower than expected revenue from the NZ Emissions Trading Scheme, following a decline in the price of New Zealand Units.

The broader operating balance, which includes gains and losses, recorded a surplus of $4b. This result was $4.5b stronger than forecast, driven by net gains on non-financial instruments of $2.8b.

Gross debt was $3.6b lower than forecast at $220.6b, representing 50.2% of GDP. The Treasury noted this was due to lower than forecast issuances of Treasury bills and Euro Commercial Paper.

Net worth attributable to the Crown was $183.5b, which is $4.6b higher than previously anticipated.