Do you recall Grant Robertson saying the surplus would be a one off?

Steven Joyce reports:

As a result of our country’s economic performance, in 2016/17 the New Zealand Government has achieved its third fiscal surplus in a row.

Core Crown tax revenue was $75.6 billion for the 2016/17 year, up 7.4 percent from the previous year with all major tax types increasing, reflecting the growth in the economy. Increases in the number of people in employment and profitability of businesses are key drivers to this growth in revenue. As a percentage of nominal GDP core Crown tax revenue increased to 28.2 percent, up from 27.8 percent.

Core Crown expenses continued to fall as a percentage of GDP from 29.2 percent in 2015/16 to 28.5 percent in 2016/17. In nominal terms increases in social assistance expenses and the incremental spending announced in Budget 2016 contributed core Crown expenses of $76.3 billion (up $2.4 billion from 2015/16).

Costs associated with the Kaikōura earthquakes added to expenses in 2016/17, with EQC estimating claims will cost nearly $0.6 billion and another $0.2 billion recognised so far on the rail and road transport links. Additional expenditure is expected in 2017/18 as work on the transport infrastructure continues.

With revenue growing at a faster rate than expenses, the operating balance before gains and expenses (OBEGAL) in 2016/17 reached $4.1 billion, an increase of $2.2 billion since 2015/16 and ahead of expectations.

A $4.1 billion surplus is impressive, as almost no other country in the OECD is even back in surplus.

However if Winston picks Labour and Greens expect those deficits to return pretty quick.

Following on from the positive core Crown operating result, the Crown recorded a residual cash surplus, leading to a decline in nominal net core Crown debt for the first time since 2008 to $59.5 billion (22.2 percent of GDP). This is a decline of $2.4 billion from 2015/16.

Great – finally paying debt off.

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