A good surplus

The Government’s financial statements for 2017/18 show a very healthy set of accounts.

It is worth emphasizing that these largely reflect the decisions of the last National Government that passed the 2017 Budget. Most changes since then by the new Government didn’t come into force until after this financial year.

Also the impact of public sector pay increases are yet to be recognised.

So Grant Robertson has been gifted almost the strongest set of Government books in the OECD. Some key data:

• Tax revenue up 6.1% and expenditure up 5.5%
• Average wages up 3.0%
• Jobs up 3.7%
• OBEGAL surplus of $5.5 billion
• Total surplus of $8.4 billion after accounting for investment gains
• Net debt down $2 billion, decreasing from 21.7% to 19.9% of GDP

Tax revenue has increased by almost one third since 2014. This partly reflects the strong economic growth we have had, but also the effect of fiscal drag.

These accounts show there is absolutely no need for tax increases, and if the Tax Working Group proposes anything that isn’t fiscally neutral, it should be rejected.