The operating balance excluding gains and losses (OBEGAL), which strips out unrealised investment gains or losses, for the three months to Sept 30 was a deficit of NZ$1.28 billion ($1.07 billion), or 22.9 percent better than the estimate in the May budget.
The department said core tax revenue income was higher than forecast, on increased personal income and sales tax returns, while crown expenses were below forecast because of delays in earthquake-related and other costs.
The operating balance, which includes movements in investments, posted an unexpected surplus of NZ$539 million because of gains in the state pension and accident insurance scheme investments.
Net debt was tracking slightly ahead of forecast.
The New Zealand government's fiscal year started on July 1, and fiscal and economic forecasts contained the May budget will be updated in the mid-year review on Dec. 17.
The budget forecast a return to a budget surplus of NZ$75 million in 2014/15, with net debt peaking in that year as well at 28.7 percent of GDP.