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Source: New Zealand Government

The resilience of the economy has continued to be reflected in the Crown’s accounts, though the full effects of the Omicron outbreak have yet to show up in the books which reinforces the need for balanced financial management, Grant Robertson said.

The Crown Accounts for the eight months to the end of February were better than forecast in December’s Half Year Economic and Fiscal Update (HYEFU).

The Operating Balance before Gains and Losses (OBEGAL) deficit was $8.3 billion, $4.4 billion below that forecast in HYEFU.

Tax revenue was $1.8 billion above forecast at $68 billion, due to better-than-expected corporate profits and a strong jobs market. Core Crown expenses were $84.4 billion, $1.4 billion less than forecast.

Net core Crown debt stood at 35.2 percent of GDP, $1.9 billion less than forecast.

“This result shows the strength of the economy despite the volatility and uncertainty surrounding Russia’s invasion of Ukraine and the ongoing pandemic. But the impacts of the Omicron outbreak have yet to be accounted for and this will affect Crown expenses in the current year,” Grant Robertson said.

“New Zealand is in a strong fiscal position, with lower than expected deficits and debt levels well below that of other countries we compare ourselves with. We will continue to take a balanced approach to respond to the ongoing pandemic and invest in long standing challenges such as climate change, housing and child wellbeing, while carefully managing our resources to ensure the long term sustainability of the economy.”