Falling tax take puts New Zealand government deficit over forecast

The New Zealand government's operating deficit for the seven months to the end of January was more than double the figure forecast because of a sharp drop in revenue, according to figures from the Treasury Tuesday. The operating deficit was 1.1 billion NZ dollars (931.73 million U.S. dollars), which was 637 million NZ dollars (539.55 million U.S. dollars) more than expected, according to the Treasury's Financial Statements. This was due mainly to core revenue at 38.3 billion NZ dollars (32.44 billion U.S. dollars) coming in 830 million NZ dollars (703. 09 million U.S. dollars) below forecast. The government's net debt was 631 million NZ dollars (534.51 million U.S. dollars) higher than forecast at 59.9 billion NZ dollars (50.74 billion U.S. dollars) or 27.7 percent of GDP. "This makes it even more important for the government to continue carefully managing its spending as we target a return to surplus next year," Finance Minister Bill English said in a statement. The lower revenue was at odds with other macro-economic indicators that had been broadly in line with forecasts and pointed to stronger economic growth in the second half of the 2014 fiscal year, he said. The main opposition Labor Party said the financial statements had been worse than expected for three straight months, raising questions over the government's economic management. "If the economy is recovering, the tax take should be increasing and the deficit reducing. The opposite is happening," Labor finance spokesperson David Parker said in a statement.