Finance Minister downplays lower deficit
Updated at 9:35 pm on 6 June 2012
Finance Minister Bill English downplayed a $1.4 billion improvement in the Government's latest monthly accounts, saying it does not lessen the Government's need to keep control of its spending.
The deficit before gains and losses on the Government's investments was $5.9 billion to the end of April, $1.4 billion dollars less than forecast in the Budget in May.
The deficit was smaller due to a higher than expected tax take and lower than expected spending.
The tax take was $770 million more than forecast. But Mr English says tax is still nearly $1 billion down on the Treasury's pre-election forecasts in October last year.
Mr English says a tight rein on spending is still needed to hit the Government's target of a surplus by 2014-15.
The minister says the Government knows where the money is going, but the revenue is uncertain and this month it has been higher than expected. The big task is to do everything possible to lift economic growth.
Returns from State Owned Enterprises and Crown Entities were $300 million more than forecast, while spending was $320 lower than predicted.
The Green Party says the new figures showing stronger-than-expected returns from SOEs is further proof the Government should retain them in full ownership.
The Treasury says company tax was $450 million more than it forecast in the Budget. Crown expenses were 0.6% lower than expected. The debt balance is slightly better than forecast at 25.9% of gross domestic product.
Infometrics economist Benje Patterson says the better-than-forecast deficit does not signal a dramatic turnaround in the Government's books and more spending cuts will be needed to hit the surplus target.
Copyright © 2012, Radio New Zealand
Forex Flash: EUR/USD breaking downtrend channel – Commerzbank - FXStreet.com
Forex: USD/CAD drops below 1.0300 as oil rises - FXStreet.com
FOREX-Euro rises on short-covering as market awaits ECB - Reuters
* Short-covering rally boosts euro
* But traders wary before ECB policy meeting
* Aussie jumps as Q1 GDP well above forecasts
LONDON, June 6 (Reuters) - The euro rose on Wednesday as investors cut hefty short positions, though concerns about Spain's troubled fiscal situation and the possibility of a rate cut by the European Central Bank could limit its rise.
The euro recouped losses suffered on Tuesday after a Spanish minister warned the country was losing access to credit markets, helped in part as unexpectedly strong Australian growth data lifted the Australian dollar and other riskier assets.
G7 finance ministers took no immediate steps to soothe fears over Europe's debt problems on Tuesday but did discuss policy responses, including "progress towards financial and fiscal union in Europe," the U.S. Treasury said.
Analysts said any move towards closer financial integration would boost the euro, but progress is likely to be very slow, leaving many traders looking to sell the euro on rallies.
However, the dollar also remained under pressure after weak U.S. jobs figures last week sparked talk that the Federal Reserve could resort to a fresh bout of quantitative easing.
"Euro/dollar is likely to squeeze higher but people will come in and sell rallies ... A one cent rally on the day would be a good opportunity to fade it," said Paul Robson, currency strategist at RBS.
Most in the market expect the ECB to keep interest rates at 1.0 percent, but there is a risk policymakers will opt to cut rates to boost the euro zone's fragile economy. A rate cut would probably weigh on the euro.
The euro was up 0.6 percent against the dollar at $1.2527, pulling away from a two-year low of $1.2288 plumbed last Friday. But traders said any gains in the currency were likely to run into offers up to $1.2540.
With recent data showing speculators holding record short euro and substantial long dollar positions, analysts saw room for the euro to gain as they trim their bearish euro trades.
But the euro could stall ahead of chart resistance at $1.2545, the 76.4 percent Fibonacci retracement of its decline last week, after it failed to breach that level on Tuesday.
SPAIN WORRIES
Concerns are growing that Spain could resort to requesting international aid to help restore health to its ailing banking sector. There is also a risk that Greek elections later this month could lead to Greece leaving the euro.
On Tuesday Spain's treasury minister Cristobal Montoro said the country was losing access to funding markets.
Sentiment was not helped as Moody's Investors Service cut the credit ratings of several German banks on Wednesday, citing the risk of further shocks from the debt crisis.
"Bleak as the euro area outlook is, it could easily get worse after the Greek election on 17 June and there may be an argument for the ECB keeping its powder dry," said James Nixon, chief European economist at Societe Generale.
"We believe the ECB is increasingly concerned by the moral hazard actions. Each time it intervenes it merely eases the pressure on Europe's political leaders."
Against the yen, the euro rose more than 1 percent to 99.14 yen, away from Friday's 11-year low of 95.59 yen.
The higher-yielding Australian dollar, which suffered a drop of over 6 percent against the U.S. dollar last month, jumped 1.3 percent to $0.9866 after data showed Australia grew well above expectations in the first quarter.
This took it well above Friday's 8-month trough of $0.9581.
The U.S. dollar rose by 0.5 percent against the safe-haven yen to 79.15 yen, helped after Japan warned it was ready to step in to curb the yen's appreciation.
Finance directors’ income at average of £1m - WalesOnline
Finance leaders report demands on the 'finance function' are increasing further - Director of Finance online
Finance leaders report demands on the 'finance function' are increasing further.
Finance Leaders are bucking the current trend for negativity on the economic outlook with over 60% of attendees at PwC's Finance Leaders' Summit expecting positive growth in their industry over the next 12-18 months.
The summit, which was held in London by PwC for CFOs and finance leaders from 98 multi-national companies, also touched on how the emerging markets continue to be important for growth.
Top locations were identified as China followed by Brazil, India, the US and Russia.
As the push for growth in new markets continues, an increasing importance is placed on understanding local requirements and demand with 90% of attendees saying they were increasingly moving away from simply exporting products towards developing products and services that are modified to meet local market needs.
Nick Atkin, partner in PwC Consulting's Finance Effectiveness practice said:
"In today's competitive economic landscape and global marketplace, it is no longer enough to export your home-grown products and services. Understanding the opportunities and risks in the local target market and innovating to develop tailor-made products and services is pivotal to success in the emerging markets."
When looking at business in the emerging markets, 60% of finance leaders cite finding and retaining the right talent as the key consideration for their function, followed by compliance and regulatory control risk.
Talent issues remain a concern for finance functions also when doing business in their own countries. Whilst 89% of finance leaders said that the demands on the finance function have increased over the past year, an overwhelming 92% of attendees reported gaps within their existing finance talent base to be able to effectively deliver against the business strategy - with more than a quarter saying those gaps are significant.
Nick Atkin, PwC partner, continues:
“Finance leaders are increasingly focusing on talent management, on attracting and retaining the right talent and on developing the skills of their teams. As organisations grow and expand internationally this is a top priority for business leaders today."
The drive for finance to become a partner of the business and driver of strategy as opposed to a department of report churners seems to continue unabated. Over half of the finance leaders believe that finance should have the responsibility for driving the right data, information and analytics across the business.
Yet a quarter of the respondents stated that the management information produced by finance failed to meet the needs of the business, with a further 37% only neutral about its impact.
Nick Groves, PwC partner and global leader of the enterprise performance management team said:
"Far too much time is still spent on manipulating data rather than on analysing information to deliver insightful solutions. Whilst finance leaders clearly recognise the importance of their role in driving the right data, significant opportunity remains in aligning management information to the needs of the business."
Whilst adding insight and maintaining control are clearly high on Finance Leaders' agendas, continuing to strive for an efficient organisation is still an important balancing act. 70% of Finance Leaders' said that they are now considering a move towards multi-functional shared services, with Finance, IT, HR and Procurement functions being the top candidates. This generates significant benefits to organisations yet also creates certain complexity
Nick Atkin, PwC partner, concluded:
"Organisations continue to look to drive efficiency across the support functions and deliver high quality services to internal customers freeing up time for finance leaders to support more effective decision making. With more free time, finance can focus on putting information at the heart of the organisation to drive better outcomes, growth and prosperity for the business, its employees and shareholders."
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