“The surplus in the 10 months to the end of April was slightly higher than expected – the Treasury reports that the operating balance before gains and losses (OBEGAL) was a surplus of $3.4 billion at 30 April, which was $159 million higher than forecast,” Finance Minister Grant Robertson said.

“The Budget Responsibility Rules require us to run surpluses to ensure that we have money set aside for a rainy day. This gives us the ability to respond to shocks like the cattle disease Mycoplasma bovis, where Cabinet was able to agree to stand alongside industry for our one shot at eradication because we have ensured the Government is in a strong fiscal position.

“The financial accounts released today show net debt at 22.1% of GDP, exactly in line with the Budget forecast. The forecasts show net debt falling to 19.1% of GDP within five years. The Budget Responsibility Rules require us to reduce net debt to 20% of GDP within five years of taking office.

“The financial accounts show that core Crown expenses were $259 million below forecast in the 10 months to April. Meanwhile, overall core Crown tax revenue was in line with the Treasury’s expectations.

“Source deductions were $211 million above forecast due to a higher-than-expected seasonal upswing in April. Corporate tax was $92 million lower than forecast due to variation in the timings of expected tax assessment filings – meaning this is set to reverse out when these filings show through in the May accounts.

“It is good to see these actual results indicate that business profit growth is tracking as expected, and that businesses are continuing to hire new workers as the economy continues to grow.

“Treasury is forecasting annual economic growth averaging at about 3% a year over the next four years, which is within the range of other forecasters including the retail banks, NZIER and the Reserve Bank,” Grant Robertson said.