Treasury figures show a deficit of $6.5 billion for the 10 months ended April, compared with a forecast of $8.2b.
Tax revenue was $100.3b, $1.65b above expectations, which Treasury said was expected to continue through to the end of the financial year in June.
"The largest contributor being higher than forecast tax revenue coming from the strong investment performance of Portfolio Investment Entities (PIEs).
"In addition, claims for R&D (research and development) tax credits were less than expected and penalties and interest revenue were more than expected, which have both contributed to higher tax revenue."
The tax collected from dividends was about $600 million above forecast, as trusts paid more on their dividends ahead of changes to their tax rate in the coming financial year.
The taxing of higher income trusts will change to a top rate of 39 percent, with lower income trusts staying at 33 percent and exemptions from tax for various community oriented trusts.
Government expenses were $112.9b, $500m lower than forecast, with less spent on housing, education, and also because of the delay in settling a pay deal with police.
The recent Budget forecast a full year deficit of $11.1b, with higher than expected deficits for the next three years before a return to surplus in 2028.
The net debt level was $174.7b, broadly in line with expectations, equating to 43.1 percent of the value of the economy.
RNZ
