Falling Revenues In New Zealand’s Economy
20 February 2012 - Which Way to Pay

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Falling Revenues In New Zealand’s Economy

The New Zealand Government’s fiscal deficit for the six months of the 2011/12 fiscal year was much worse than expected thanks to a lower than forecasted tax take.

Many have stated that the figures suggest an increasing state debt.

Core revenue was 28.629 billion NZ dollars, which was 743 million NZ dollars lower than what was forecasted in October. Tax revenue in the first half of this year was 400 million NZ dollars lower. Meanwhile, core expenses were 34.087 billion NZ dollars, 887 million NZ dollars below predictions.

Fergus Welsh, chief financial officer said, “Data on provisional tax assessments received during the month of December, together with slightly weaker-than expect gross domestic product in the September quarter, indicates that corporate profits may be weaker for the full financial year.”

However, Finance Minister Bill English said the government was “on track” with its fiscal plan. He said in a statement, “Lower tax revenues reinforces the need for the government to be disciplines in its spending and stick to its plan to get back to surplus in 2014-2015.

As revenues and spending dropped the last six months of 2011, the Government renewed its vow to tighten spending.