New Zealand gov't difficult to meet surplus target due to under forecast tax

The continued weakness in tax revenue against forecasts highlighted the difficulty of the New Zealand government meeting its target of returning to surplus this financial year, Finance Minister Bill English has said.

Core tax revenue was 94 million NZ dollars (70.65 million U.S. dollars) below forecast, despite being 1.6 billion NZ dollars (1.2 billion U.S. dollars), or 6.7 percent up year on year, according to Treasury figures out Friday.

Core expenses were 67 million NZ dollars (50.38 million U.S. dollars) lower than forecast at 29.9 billion NZ dollars (22.49 billion U.S. dollars), the statement showed.

The financial statement showed an operating deficit of 1.54 billion NZ dollars (1.15 billion U.S. dollars) compared with a forecast of 1.66 billion NZ dollars (1.25 billion U.S. dollars) in the Treasury's Half-Year Economic and Fiscal Update released last month.

However, the smaller than expected operating deficit reinforced the government's belief that the strong underlying economy and responsible fiscal management could deliver a surplus when the final accounts were published in October.

"Current economic conditions -- stable growth, low inflation, growing employment, and low interest rates -- are helping New Zealanders to get ahead. But these conditions are also making it more challenging for the government to achieve its fiscal objectives in a timely manner," English said in a statement. Endi