Strong labour market helps Government’s accounts

A STRONGER labour market is being given credit for an improvement in the Government’s financial statements for the 11 months ended May.

Core Crown tax revenue at $73.5 billion for the period was close to forecast, the Treasury said when releasing the statements yesterday.

Source deductions were $300 million above forecast. Recent data releases indicated the labour market might be ‘‘a little stronger’’ than was forecast in the May Budget 2018.

Corporate tax was below forecast by $200 million, mainly owing to seasonal fluctuations in provisional tax assessments. The Treasury said those provisions were expected to reverse in June.

The operating balance before gains and losses (obegal) was a surplus of $5.2 billion, $400 million higher than forecast. The obegal in May last year was $4.5 billion.

Crown expenses of $73 billion were $400 million lower than forecast.

When gains and losses were added to the obegal result, the operating balance was $7.9 billion, $500 million less than forecast. At the same time last year, the operating balance was $13.1 billion.

Total borrowings were slightly up on the same time last year at $112.9 billion.

The Government’s net worth increased by nearly $15 billion in the period to $118.6 billion.

Finance Minister Grant Robertson said the statements showed the books were in a good position. There was a strong surplus indicating revenue and expenses were tracking in line with the Budget forecasts.

‘‘The latest set of accounts show the Coalition Government is sticking to our commitment to run the books responsibly by running sustainable surpluses and keeping expenses under control.’’

The Government is coming under pressure from nurses, teachers and the public service to settle wage claims ranging up to 16%.