The government’s finances are in much better shape than expected, with strong domestic spending propping up the tax take.
Official figures show a deficit of $3.8 billion for the four months ended October, less than half the amount forecast before the election.
The surge in consumer spending after the lockdowns has lifted GST revenue by more than $1.6b above forecast.
Income and corporate tax revenue were also higher than expected, which the Treasury said showed companies had not been as hard hit by Covid-19 as expected.
The government’s expenses were lower than forecast with $1.4b less being spent on the wage subsidy scheme.
Minister of Finance Grant Robertson said the stronger than expected finances were a vindication of the government’s response to the pandemic.
“Overall, the government accounts are holding up well, which is a result of the government’s action to support the New Zealand economy through a once-in-a-lifetime economic shock.”
The net debt level grew to $97b, 31.5 percent of the value of the economy compared to a forecast 32.5 percent.
The better than expected finances hold the prospect that the large budget deficits and debt levels forecast in the pre-election update in August will be reduced in the half-year economic update in two weeks.