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NZ Govt Tax Revenue $1.1b Short in Four Months to Oct
Source: nz.finance.yahoo.com
Source Date: Monday, December 06, 2010
Focus: Knowledge Management in Government
Country: New Zealand
Created: Dec 06, 2010

The Government is planning to put more heat on the public sector in the New Year, as latest figures show its tax revenue was $1.1 billion or 6.3 percent lower than forecast in the four months to the end of October.

Finance Minister Bill English said larger than forecast deficits in the Crown's financial statements reinforced the need for tight fiscal discipline alongside continuing efforts to move resources to frontline services.

"While the Government's books have taken a hit from the effects of lower consumption and increased household saving, this trend creates a strong platform for faster growth in the medium and longer term as we rebalance the economy towards savings, productive investment and exports," he said.

"However lower consumption, a weaker global outlook and the fiscal impacts of the Canterbury earthquake will mean slightly lower growth and slightly higher deficits in the short term before improvements show through.

"This reinforces the need for sound financial management and ongoing discipline in Government spending if we are to get back to surplus by 2016. That is why the Government is committed to spending restraint for the foreseeable future."

In the New Year the Government would consider further decisions on increasing efficiency in the public sector and how it managed some of its large and growing expenses.

That work would be helped by a report of the Welfare Working Group, the Government's review of spending on policy and the ongoing response to the report of the Housing Shareholders Advisory Group.

Publishing the Government's financial statements for the four months to October today, the Treasury said the figures were consistent with the general picture outlined in the three-monthly statement published last month.

The biggest factor in the shortfall shown in the data out today for the four month period was that corporate tax revenue was $784 million or 28 percent lower than forecast.

That was mostly due to a slower economic recovery than expected, Treasury said.

GST revenue also continued to be below forecast, coming up short by $190m or 4.2 percent in the four months of the year so far.

That was a significantly lower shortfall than had been recorded in the three months to the end of September.
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