New Zealand plunges into red after ‘simple mistake’

An embarrassing accounting error wrongly plunged the
New Zealand budget balance
$NZ394m (?157m) into the red in January – the first time the country has
recorded a deficit in 15 years.

But officials from the Inland Revenue Department, the country’s tax
authority, today revealed they had failed to take into account $NZ600m in
provisional tax. The revised accounts put the government’s operating balance
back in black at about $NZ200m.

Finance Minister Michael Cullen said the IRD commissioner and the head of
Treasury had apologised to him over what was a ‘simple mistake’.

John Whitehead, Treasury secretary, told reporters that officials began to
doubt the accuracy of the number as they got early indications that February tax
revenue was much stronger.

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