Tennis court sale helps ease deficit

Press, 16 August 1989, Page 8

Tennis court sale helps ease deficit

By

PATTRICK SMELLIE

in Wellington

Large-scale revisions of data and the $l5O million sale of a Tokyo tennis court gave New Zealand its best quarterly balance of payments result for the first three months of this year.

In that time, New Zealand racked up a $5OO million surplus in its dealings with the rest of the world —x the biggest surplus since the balance of payments was first recorded in 1965. This gave a balance of payments deficit for the year to March jf only $253 million, compared with $1.9 billion a year earlier. The balance of payments records whether we are paying our way in the world by measuring total income flowing in against total payments flowing out. Greater precision in measuring these flows has

led to two big revisions in the last six months. The first revealed the balance of payments deficit was $BOO million larger the first thought. The second announced yesterday, improved the situation by including much more sophisticated measurement of the income New Zealand earns from overseas investments.

Figures released by the Statistics Department show that this has been an increasingly important form of earnings for the country in the last couple of years. In the three months to December last year, it was found investment income came to $312 million, more than twice the original estimate by the department of $143 million.

This compares with earnings of $lOO million in June, 1985, shortly

after foreign exchange controls were lifted.

This, and some reductions in debt servicing payment because of repayment of overseas debt, have assisted in reducing one of the most intractable elements of the balance of payments deficit — the balance on invisibles deficit. This is the shortfall between foreign investment earnings, tourism receipts, and exports of services, and the cost of debt and other offshore payments. The current account surplus for the period of $5OO million compared with a $219 million surplus in the March quarter 1989, and a deficit of $6O million for the December 1988 quarter. But the figure caused controversy because it included $l5O million from the sale of the Govern-ment-owned tennis court in Tokyo.