The Government ended the last financial year with a deficit of $9.2 billion, about half of what it was last year.

That is slightly higher than the $8.4 billion forecast in the May Budget.

But while the tax take has been slightly higher than forecast and core crown expenses were slightly lower than forecast, the write-off in the value of KiwRail by $1.4 billion on June 27 was not factored into the May forecasts.

Its effect has more than offset the improvements.

If the $1.9 billion costs of the Christchurch earthquake this year was excluded, the operating balance would be $7.3 billion.

Treasury officials this morning would not comment on whether the books confirmed the Government was on target to get back into surplus in the 2014 – 15 financial year.

But excluding the one-off effects of the KiwRail writedown, the books are better than forecast.

Finance Minister Bill English who is overseas said in a statement the accounts showed the Government was making good progress, with the economy continuing to recover and public finances improving.

Tax revenue increased by $3.5 billion from the previous year. Core Crown expenses fell by $1.4 billion.

Net Crown debt increased to $50.7 billion (24.8 per cent of gdp) form $40.1 billion (20.3 per cent of gdp) in the previous year.

English that is the uncertain global environment it was important for the Government to focus on controlling its spending and improving the quality of existing spending.

English said the Government had less control over revenue – particularly with other parts of the world still struggling with high levels of debt and sluggish economies.

“This will have an impact on New Zealand.”

“We are focused on taking New Zealand forward by building a more competitive economy based on higher savings, less debt and healthier Government finances.”