New Zealand govt's cash deficit hits nearly $3 bln

Special Report:Global Financial Crisis

WELLINGTON, March 6 (Chinese media) -- The New Zealand government's cash deficit

has blown out to nearly 6 billion NZ dollars (3 billion U.S. dollars) in the

first seven months of this financial year.

The cash deficit is about 1 billion NZ dollars worse than Treasury had

forecast in October and has resulted in heavier government borrowing to cover

the shortfall.

Gross debt as a proportion of the Gross Domestic Product 每 the rough

measure of economic activity -- had jumped to 25 percent at the end of January.

But net debt is lower than expected at 2.3 billion NZ dollars because

changes in exchange and interest rates have increased the value of financial

assets held by the government.

Overall, the public finances are getting worse.

The Treasury said the tax take continued to fall in January.

It resulted in an operating deficit of 5.5 billion NZ dollars for the seven

months, much worse than the December update forecast of a 3.6 billion NZ dollars

deficit.

The Treasury said the deficit is largely due to more than 3 billion NZ

dollars worth of investment losses, and 3.1 billion NZ dollars in losses due to

reevaluations of workplace accident insurance liabilities.