11 month Government surplus

The ODT reports a better than forecast Government surplus in  in Surplus to requirements:

The Government accounts are in surplus by more than $2.3billion for the 11 months ended May…

The last time the Crown accounts recorded a larger year-to-date obegal surplus than the May 2016 surplus of $2.3billion was the June 2008 annual financial statements, when the year-to-date surplus was $5.6billion.

This should be something to celebrate.

The financial accounts, released by the Treasury, showed core Crown tax revenue was $64.7billion, 0.6%, or $364million higher than forecast, largely due to customs and excise duties ($188million), source deductions ($182million) and GST ($98million). The variances were a mix of timing and permanent in nature.

Core Crown expenses of $67.2billion were close to forecast.

And in what has become a familiar theme, the operating balance, which includes all the losses and gains, was in a deficit of $1.5billion, $82million larger than forecast.

The operating balance was again hit by ACC actuarial losses, this time of $880million. The Emissions Trading Scheme liability increased due to an increase in carbon prices, resulting in losses of $520billion. But the losses were partly offset by favourable movements in Crown investments of $1billion.

But the ODT says that no one cared, or at least politicians didn’t seem to care:

However, Finance Minister Bill English did not bother to put out a statement congratulating himself or saying how the Government’s fiscal prudence was paying dividends. Nor did he comment on how the accounts were subject to seasonal influences and there was no guarantee a surplus would be achieved next month.

There should have been something from Mr English, especially around whether debt repayment, more infrastructure spending or tax cuts were on the agenda.

Neither the Green, Labour nor New Zealand First parties bothered to put out a statement criticising the Government for racking up a surplus…

The end of year result should receive more attention, from the Government if it’s good news and from Labour and the greens if it’s negative.

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33 Comments

  1. David

     /  6th July 2016

    and some people label them a do nothing arrogant and complacent government…lets hope they continue doing nothing. Its supreme arrogance to run pretty much the only surplus in the developed world and not scream and shout about how fantastic you are at running the gaff 🙂

    Reply
  2. Blazer

     /  6th July 2016

    they’ve been wrong so many times thats why.Not forgetting 3 billion ,yes 3 BILLION of tax cuts on the way.

    Reply
  3. Brown

     /  6th July 2016

    Its just numbers on paper for public consumption and in reality we are so far in the shit with debt we should have suffocated years ago.

    Reply
  4. Though I have limited understanding of the finer points of economics, the above shows we had a government surplus in 2008 (under Labour) just before the GFC shit truly hit the fan in September of that year?

    So perhaps this interim surplus is a harbinger of doom rather than cause for celebration? What’s it based on? We have many of the same conditions prevailing now as did in 2008 under Labour, (NB) when the last significant surplus was recorded. An inflationary property boom or housing bubble, ready credit-based ‘wealth’, a third term government … a ‘thriving’ FIIRE economy yet again …?

    Haven’t had time to read it in full yet but this looks like an interesting article & blog –

    ww.neweconomics.org/blog/entry/2016-the-year-of-the-next-global-financial-crisis

    ” Deep down, many of the risks to the global economy can be traced back to insufficient global demand for supporting current levels of production.

    In the developed world, real wages are stagnant or decreasing, while most governments are sticking to austerity policies which contract economic activity and employment. The Chinese economic slowdown also means reduced demand for commodities and energy from the rest of the world.

    In this context, the main sources of global demand are currently the US and UK private sectors, where demand is kept afloat not through increases in real wages, but through private sector (including household) debt and bubbles (e.g. the UK housing market).

    “whether debt repayment, more infrastructure spending or tax cuts were [are] on the agenda”?

    Debt repayment is surely a more-or-less constant and a stated aim of the Nats? Infrastructure spending is reluctantly given too little too late, cornered, back against the wall with no escape, polls no doubt indicating loss of support regards the ‘housing crisis’ – a mere symptom of the greater malaise – so I know which one I’d pick from a National government … and I know who I’d pick it on behalf of … Tax cuts for the rich …?

    Reply
    • PDB

       /  6th July 2016

      PZ: “Though I have limited understanding of the finer points of economics”

      Should have stopped there when you were ahead………I’m surprised you leave the house at all just in case lightning strikes you.

      Reply
    • “We have many of the same conditions prevailing now as did in 2008 under Labour, (NB) when the last significant surplus was recorded. ”

      ahhhhhh no. not even close on a global scale…. total different US and Europe and China situation, completely different interest rate environment… just not even close.

      As for the deficits National have run think about what it would have been like if they had instead of borrowed slash spending across government by 10-15%. health Education Welfare would have been decimated…… we should now focused on curtailing spending and paying down debt as quickly as possible…

      Reply
      • Blazer

         /  6th July 2016

        ‘ahhhhhh no. not even close on a global scale…. ‘ but it is the same….Dave,never ending QE to artificially pump up markets,low interest rates are to stimulate demand ,money flowing into non productive sectors,the FIIRE(hat tip to Pz) economy rampant,and the top 1% get richer and the living week to week 53% get their heads kicked in.700 trillion in derivatives,colossal unpayable debt is the order of the day….deflate,devalue,how about another war ..as a distraction!

        Reply
        • yawnnnnnnnnnnnnnnnnnn……Caio BoL…..

          Reply
          • Blazer

             /  6th July 2016

            foxtrot oscar…pretender!

            Reply
            • Really BOL thats what you got swearing in shorthand? And here was me thinking you had half a brain just not very well adjusted but really you’re just a standard issue troll….

              Don’t know if you hand down your trousers or the other hand on the keyboard is moving faster….

              Last engagement BoL – Pete is not interested in little flame wars – you enjoy yourself petal.

            • Hey BoL…. you tell some to F Off…. you can expect a little name calling back. Blowhard seems apt for you.

              Now stop crying and blaming people for doing what your do quite freely

          • Blazer

             /  6th July 2016

            how many goodbyes do you need…b/s artist.You talked big,with a backstory that doesn’t add up.

            Reply
            • Truly blazer you are one of the biggest dropkicks on the web. No wonder you are banned at Kiwiblog.

              And now its time to say tatatata little Blaze, before you spontaneously combust…..

            • Blazer

               /  6th July 2016

              never post on Kiwiblog..Dave…how can I be banned…desperado smear tactics…what a surprise from a neo lib cheerleading b/s artist.

    • Partisanz: “though I have limited understanding of the finer points of economics, the above shows we had a government surplus in 2008 (under Labour) just before the GFC shit truly hit the fan in September of that year?”

      Not so. The Prefu before the election – before the GFC hit, had a $3.2bn budget deficit. You can read it for yourself: http://www.treasury.govt.nz/budget/forecasts/prefu2008

      Reply
  5. Blazer

     /  6th July 2016

    Good summary Pz….Al needs to understand this…’where demand is kept afloat not through increases in real wages, but through private sector (including household) debt and bubbles (e.g. the UK housing market).’

    Reply
    • Alan Wilkinson

       /  6th July 2016

      Demand increase in both UK and NZ is substantially due to immigration flows. National has spent far, far more on infrastructure than Labour. PZ talks economic nonsense as usual.

      Reply
      • Blazer

         /  6th July 2016

        no he does not…look at the exponential increase in debt…public and private.According to your theory,when there were decades of net migration loss house prices should have reflected it with a noticeable,consistent …downward trend.

        Reply
        • Alan Wilkinson

           /  6th July 2016

          Public debt is not exponential, it is declining:
          http://www.tradingeconomics.com/new-zealand/government-debt-to-gdp

          Net migration loss does not mean net population loss. NZ’s population was still growing. Also Auckland has high internal immigration. And Labour ramped up building and planning bureaucratic hurdles which had their inevitable immediate consequences.

          Reply
          • Blazer

             /  6th July 2016

            I was talking total debt,not as a % of GDP construct.You were citing the relativity of migration and demand Al,and just to screw the scrum a bit more,are now throwing in ,’its Labours fault’…for good measure!

            Reply
            • Alan Wilkinson

               /  6th July 2016

              It is Labour’s fault. And the loony Greens.

          • Alan Wilkinson

             /  6th July 2016

            Of course you can choose one of these two options to believe but not both:

            a) NZ household debt is increasing because of high house prices
            b) Chinese investors with wads of hot overseas money are buying up all the houses.

            Reply
            • Blazer

               /  6th July 2016

              do you only have red …herrings in your bag of tricks…Al?Both apply…you and you alone can believe it…or not!

            • Alan Wilkinson

               /  6th July 2016

              I have logic on my side, Blazer. If houses are being bought with foreign money they are not being bought with NZ debt. Moreover the foreign money pays off previous NZ debt owed on those houses.

              Conclusion: foreign funded house purchases are an insignificant factor in the NZ property market.

            • Blazer

               /  6th July 2016

              you have but a personal brand…’Als logic’.Common sense everyday logic tells you that both scenarios are causes..period.

            • Alan Wilkinson

               /  6th July 2016

              No, Lefties don’t have any logic, just emotion and sound bites, Blazer.

        • Corky

           /  6th July 2016

          National is focusing on the logarithm part of the graph, Blazer. Nothing like a good inversion.

          Reply
  6. Alan Wilkinson

     /  6th July 2016

    The ETS liability should be millions, not billions, I should think.

    Reply
    • PDB

       /  6th July 2016

      Linking to the Strandard for informed opinion is like reading one of your posts Blazer – not recommended.

      Reply
      • Blazer

         /  6th July 2016

        no surprise there downtrou…why on earth would you…want to be informed…ignorance is …bliss…for..some!`

        Reply

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