New Zealand's Treasury is forecasting a $NZ572 million ($A532.51 million) budget deficit, but Finance Minister Bill English thinks that can be turned around before the end of the financial year.
His May budget forecast a surplus of $NZ372m when the financial year ends on June 30, and in its pre-election update the Treasury trimmed that back to $NZ297m.
In its half-year update, released on Tuesday, the Treasury says lower than expected tax revenue will turn that into a deficit for the 2014/15 year.
It forecasts a return to a modest surplus in 2015/16, increasing steadily to a surplus of about $NZ4 billion in 2018/19.
The government has been promising a surplus in 2014/15 for the last five years, and Mr English believes he can keep his word.
"The government believes a surplus is achievable this financial year, despite Treasury's latest forecast predicting a $NZ572m deficit," he said.
"Previous forecasting rounds show the outlook can change significantly between the half-year update and the final accounts."
Mr English's optimism is based on forecasts that economic growth is solid, forecast to continue at around three per cent for the next four years.
Inflation is forecast to stay lower for longer - the main reason the Treasury thinks tax revenue won't grow as quickly as it had expected.
Interest rates will also stay lower for longer.
Unemployment is forecast to continue falling from the current 5.4 per cent to 4.9 per cent in 2019.
The downside in the immediate future are falling prices for milk and timber, although that is partially offset by increases in meat prices.
Immigration is forecast to continue increasing, peaking at about 52,000 next year.
Mr English says the forecast deficit is a tiny figure in total budget expenditure of around $NZ70 billion, and he's going to continue to keep a tight rein on spending.
He repeated his election campaign forecast that he expects to be able to consider modest tax cuts in his 2017 budget.
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