Careful cost management critical in year ahead

The Government’s careful management of its expenses will be even more critical in the coming year as it looks to live within its constrained budget, Finance Minister Bill English says.

This ongoing commitment to responsible cost management is particularly important with company tax revenue coming in $108 million below Budget forecasts for the 10 months to 30 April.

“Budget forecasts last month pointed to the economy picking up over the next year, which is encouraging for job seekers and businesses looking for opportunities to get ahead.

“But those forecasts also showed that the Government’s finances will not return to surplus until 2015/16. That is based on the Government continuing to live within its $1.1 billion annual allowance for extra operating spending and weeding out lower priority spending for high-priority frontline public services.

“I want us to return to surplus as quickly as possible, because as long as we remain in deficit, Crown debt will continue to increase and leave us vulnerable in what remain volatile global financial markets,” Mr English says.

“The Budget took steps to help us return to surplus more quickly through responsible management of the Government’s finances and a comprehensive tax package that will lead to faster growth in the productive parts of the economy.”

The Crown’s operating deficit before gains and losses was $5.2 billion in the 10 months to 30 April - $636 million better than forecast in the Budget.

Core Crown expenses were $416 million below forecast at $52.3 billion. This was the result of a number of factors, much of them due to timing, including lower costs for social assistance benefits and lower staff expenses. Core Crown revenue was about $67 million above forecasts at $46.3 billion.

ENDS

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