New Zealand government's tax revenue-less economic revival

The New Zealand government's claim of an economic revival was called into question Tuesday when Treasury figures showed a sharp rise in the operating deficit driven by lower than forecast tax revenues. Finance Minister Bill English maintained the government was still on track to hit its target of an operating surplus in the 2014-2015 fiscal year, but he said it was a challenging task that required discipline. The government's financial statements for the eight months to the end of February showed the operating deficit before gains and losses at 1.4 billion NZ dollars (1.21 billion U.S. dollars), or 884 million NZ dollars more than expected. This was mainly due to lower than-forecast tax revenue, which was 1.9 billion NZ dollars, or 5 percent, higher than the same time last year, but 1.1 billion NZ dollars less than forecast in December. "These figures will be factored into next month's Budget and reinforce the need for restraint in government spending. They also confirm that there will be no capacity for reckless spending promises ahead of the election later this year," English said in a statement. The main opposition Labor Party said the figures had fallen below forecast for four straight months, raising questions as to why tax revenue was failing to grow with the economy. "When the economy grows tax revenue should increase," Labor finance spokesperson David Parker said in a statement. "If wages were rising, the tax take would be increasing. This is plainly not happening and hard-working New Zealanders are not getting their fair share." The opposition Green Party said that government net debt was 435 million NZ dollars higher than forecast at a record 60 billion NZ dollars, or 27.1 percent of gross domestic product. The government had "failed to manage the government's books in a fiscally prudent manner," Green Party co-leader Russel Norman said in a statement.