The Interim Financial Statements of the Government of New Zealand for the three months ending 30 September 2022, released by the Treasury on November 8, would appear to back the government’s optimism that the economy is headed towards surplus.

The Crown accounts showed the operating balance before gains and losses (OBEGAL) recorded a deficit of   $2.6 billion.

Finance Minister Grant Robertson told Parliament on Tuesday that the deficit was “a little higher than forecast at Budget 22 in May.”

Net debt stood at $71 billion, or 19.8 per cent of GDP, which was largely in line with forecasts.

Robertson said overall the NZ economy was resilient to international pressures.

The fundamentals of the economy are strong, according to the indicators. The jobs market continues to be buoyant. Unemployment remained at a near record low of 3.3 per cent in the September quarter.

The average hourly wage stood at $37.86, “outpacing the current rate of inflation,” according to Robertson.

He acknowledges that many Kiwi households are struggling with rising costs, “but they do so while in paid work and with wages growing faster than inflation.”

More people have joined the workforce in the quarter, many of them young people and women, swelling the total number of employed to a record 2.85 million. The rate of employment stands at 69.3 per cent.

Roberson paints the NZ economy with broad brush strokes. It has grown by five per cent from what it was before Covid. Exports are rising, tourists are returning and the government’s immigration reset is yielding results.

NZ is bearing up well to comparisons with other western economies, such as the UK, the US, Canada and Australia.

Yet the drivers behind domestic inflation are proving elusive to target. For the government, all signs appear to lead beyond NZ ‘s borders.

Whether this is perception or reality is part of the inflation conundrum.

But the government’s view is unambiguous.

Robertson said in May that countries around the world were grappling with higher inflation, that supply chain disruptions were feeding into that along with the war in Ukraine.

The government put measures in place to “shield New Zealanders from the impacts of the global headwinds.”

Those included reducing fuel excise and road user charges, and introducing a temporary cost of living payment to all eligible New Zealanders.

But inflation has outpaced those measures as households and businesses continue to feel the squeeze.

Prime Minister Jacinda Ardern’s recently unveiled childcare support package, aimed at helping families cope with cost of living, will kick in in April 2023.

The Crown accounts give the Labour government some cause for cheer, however fleeting.