By Nick Mann | 25 January 2013

Improved revenues and flat spending mean the New Zealand government remains on track to return to surplus in 2014/15, the country’s finance minister Bill English said today.

A financial statement for the five months to the end of November reveals that the operating deficit before gains and losses on investments was just over $3bn. This was $203m better than the deficit forecast by the finance ministry in December. It was also $1.5bn less than the deficit posted for the same period a year earlier.

Government finances were boosted by a $1.1bn increase in year-on-year revenues, part of which the minister attributed to higher tax following a growth in wages. Revenues totalled $22.5bn, which was $127m, or 0.6%, higher than forecast in December’s Half-year update.

Spending over the five months was $50m lower than for the same period a year earlier but, at $28.8bn, largely in line with the amount forecast in last month’s projections.

Net debt stood at $56.4bn – equivalent to 27.1% of New Zealand’s gross domestic product.

English said that overall the results were in line with those forecast last month. ‘It’s important that the government sticks to its programme of responsible fiscal management, so we can get back to surplus and start repaying debt. At the same time, we will remain focused on building a more competitive and productive economy that encourages investment and supports jobs and higher incomes,’ he added.

Prime Minister John Key said he was ‘hugely positive’ about the future for New Zealand.

In his State of the Nation speech today, he said: ‘We're managing the government's finances to get back to surplus and start reducing debt and we're pressing ahead with a wide range of measures to build a more productive and competitive economy.

‘That's an economy where growth is based on the solid foundations of investment, exports and savings.’