Maybe we will make surplus?

Bill English has announced:

The operating balance before gains and losses (OBEGAL) for the seven months to January was a surplus of $77 million, driven by higher than expected tax revenue and lower than expected operating expenses, Finance Minister Bill English says.

“This is the first time the Government’s books have shown a part-year surplus since 2009. Although it is too early to say whether we will have a surplus for the full 2014/15 year, this result demonstrates the strides we have made in improving the Government’s finances,” Mr English says.

The OBEGAL outturn was $712 million better than the $635 million deficit forecast by the Treasury in the Half-Year Update (HYEFU) in December, but was still $120 million below Treasury’s Budget 2014 forecast, undertaken at the start of the fiscal year.

This is somewhat promising but does not guarantee a year end surplus. The surplus is the difference between two very large numbers of around $80 billion each. The Government has pretty good control of its spending, but tax revenues are quite unpredictable.

However the first part-year surplus since the GFC is still a good thing.