Government deficit moves further off track

Thursday, 5 December 2024

The accounts are last that will be posted before the Treasury releases updated forecasts for the period up to June 2029 in 12 days time.

The Government’s accounts have deteriorated further from forecasts set out in the May Budget.

Crown accounts released by the Treasury show the Government ran up an operating (Obegal) deficit of just over $4.6 billion in the four months to the end of October, with the deficit $881m higher than forecast in the Budget.

At the end of September, it had been $656m off track, with the deficit for the first three months of the year coming in at $4.2b.

The deficit for the first four months of its new financial year is $797m higher than the $3.9b deficit run up by the former government in the same period last year.

Finance Minister Nicola Willis has signalled the Government will change the way it presents the deficit.

Finance Minister Nicola Willis told a select committee on Tuesday that its accounts would have been $1.1b worse in the period up to the end of June, had it not cut expenditure.

The accounts were still suffering from the former government’s fiscal choices, she said then.

Net core Crown debt stood at close to $179b at the end of October, or 43.2% of GDP, $654m higher than forecast in the Budget.

Willis indicated on Tuesday that the Government would change the way it presented its deficit by spinning the accounts of Crown entities such as under-strain ACC out of the headline Obegal measure.

She said she would have more to on that matter when the Treasury released its Half Year Economic and Fiscal Update on December 17.