The Government has recorded a smaller-than-expected budget deficit for the second half of last year.
After stripping out investment gains and losses, the Crown recorded an operating deficit of $990 million for the six months to December - some 28 percent less than the Treasury forecast.
Finance Minister Bill English said that reinforced the message the Government was on target to post a surplus.
Core tax revenue came in above expectations at $31.4 billion because of higher returns from GST and corporate tax. Expenses stood at $35.8 billion, in line with forecasts.
Net debt stood at $66.5 billion, or 28.1 percent of Gross Domestic Product (GDP).
Treasury is forecasting a $570 million deficit for the June 2015 financial year due to lower dairy prices and falling inflation.