The Government's financial books are in better shape than anticipated – but there is still big bills, a lot of borrowing and uncertainty.
The latest numbers also don't include the two months of restrictions faced by our biggest city.
Secretary to the Treasury Caralee McLiesh said the financial statements for the year to June 2021, "reflect a strong economic rebound from the initial shock of the Covid-19 pandemic".
"New Zealand is well placed to handle the on-going impact of this shock on the economy," McLiesh said.
She said the results were stronger than forecast in Budget 2021, with a "significant" increase in revenue and decrease in expenses.
The deficit was "much smaller, but still significant" at $4.6 billion, compared to 2020's $23.1b.
Health, transport and the retirement fund costs grew, contributing to expenses which made up 31.7 per cent of GDP.
Finance Minister Grant Robertson said it showed a "very good and solid result, and bodes well for us coming out of the current outbreak we're in".
"Our economy has the strength to bounce back, and bounce back quickly."
He said the last two months do cast "somewhat of a shadow" over the accounts, but meant the country was in a good position to tackle the impact.
On the almost $10b increase to borrowing, Robertson said it was "absolutely the right thing to do".
He said it was what enabled New Zealand to "get through", adding to economic, social and health system investments.
Net core Crown debt sat at 30 per cent of GDP (gross domestic product) – four per cent lower than what was forecast at this year's Budget.
Total expenses were at $133.7b – down $5.2b from 2020. The wage subsidy only cost $1.2b – a drop of $10.9b. However the spend of the wage subsidy during the Delta outbreak is not factored into the figures, meaning this could rise by a sizeable amount.
Health expenditure grew by almost 15 per cent, up $2.9b, primarily due to the Covid-19 response, MIQ and vaccines, and also from funding for the health sector.
Transport went up by $2.5b for funding to maintain air transport.
New Zealand superannuation costs grew by $1b in a year – driven up by the country's ageing population which saw an increase of people on the pension, coupled with an increase in the payment rate.
The deficit was "much smaller, but still significant" at $-4.6 billion, compared to 2020's $23.1b.
The priorities for Budget 2022 are set to be released on December 15, with Robertson saying there would be a focus on climate change.
He said Level 3 provided about 95 to 90 per cent activity, with sectors such as construction able to operate.