Government deficit $3.5b less than forecast on Budget Day

Thursday, 4 June 2026

The Government’s operating deficit for the 10 months to the end of April came in nearly $3.5 billion lower than Treasury forecasts released just days ago on Budget Day.

The operating deficit, with ACC’s accounts included, totalled $8.8b for the period, versus Treasury’s forecast of a $12.3b deficit.

Net core Crown debt totalled just over $190b at the end of the period, more than $1.6b below Treasury’s Budget forecast.

While it is common for the monthly Crown accounts to differ somewhat from Treasury predictions, the size of the gap between the accounts and its forecasts appears unusual — especially given how recently those forecasts were published.

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The difference between the operating deficit and Treasury’s forecast is, for example, more than the entire $2.4b sum that the Government anticipates saving from public service cuts announced on Budget Day.

Tax revenue for the period was $1.8b higher than forecast and the Treasury said the accounts also benefited from “favourable results from state-owned enterprises”.

That was despite the profits and dividends reported in February by the three big partially state-owned gentailers, Meridian, Mercury and Genesis Energy being — as usual — very accurately predicted by brokers.

Company tax receipts for the year to the end of April were about $900m higher than forecast on Budget Day and income tax about $400m higher, with income from GST about $300m greater than expected.

Asked to comment on the accuracy of its Budget forecasts, Treasury said they had been completed on May 4.

There was some uncertainty whether the difference in the tax take was likely to persist or “more likely to be timing in nature”, it said.

“We will have a better sense on that in the next month or two.”