New Zealand’s budget deficit was NZ$169 million ($139 million) wider than forecast in the four months through October as tax revenue fell short of expectations, according to a Treasury Department report.
The government’s operating deficit before gains and losses on investments was NZ$2.87 billion in the period ended Oct. 31, compared with a NZ$2.7 billion gap forecast in the May budget, the Treasury said in monthly financial statements released today in Wellington.
New Zealand’s government is cutting non-essential spending and selling assets to speed up a return to surplus by fiscal 2014-15. Finance Minister Bill English presented a budget with little new spending over the next four years and forecast a deficit of NZ$7.9 billion in the year ending June 30. The Treasury updates the outlook on Dec. 18.
“With the world economic position remaining uncertain, it is important that the government remains focused on responsible and prudent fiscal policy well beyond its 2014/15 surplus,” English said in an e-mailed statement. The Dec. 18 update will include an assessment of the global economic situation and how it will impact New Zealand, he said.
Revenue was NZ$536 million less than forecast, the report showed. Wage growth and private consumption were slower than expected, curbing income and sales tax collections, the Treasury said. Interest income also declined.
Expenses were NZ$343 million less than forecast, reflecting fewer welfare recipients and delays in starting health-related projects, the report showed.