Prime Minister John Key says the Budget struck a balance "many other countries would dearly love to emulate".
"We are on track to meet our fiscal objectives, yet at the same time we are getting on and doing things," Mr Key told a business audience at his post-Budget speech today.
"By committing to surplus by 2014-15, we are taking a responsible path of fiscal management, while at the same time continuing to invest in future growth.'
Yesterday's Budget forecast a wafer thin surplus of $197 million in 2014-15 after a forecast deficit of $7.8 billion then $2 billion in the preceding Budgets.
National made getting back into surplus by 2014-15 a touchstone of its re-election pitch on the campaign trail last year.
But the forecast surplus has been criticised as vulnerable and only possible on the back of over-optimistic Treasury forecasts.
Mr Key today admitted it was "not the world's biggest surplus" - but said it was an important milestone.
"For the first time in a number of years, the Government will be raising enough revenue to meet its commitments without having to increase debt. And, from that time on, we can begin to get our existing stock of debt down to more prudent levels.
That represents a huge turn-around, given the impacts of the 2008 recession, the global financial crisis and the Canterbury earthquakes."
Mr Key said each of those events on its own would have been a huge shock to the New Zealand economy and National had been dealing with all three of them.
"In fact, each Budget we have delivered has been in the face of significant challenges.
"When Bill English stood up to give his first Budget, in 2009, the economy had shrunk two-and-a-half per cent over the previous year, from the first quarter of 2008 to the first quarter of 2009. That was the largest annual percentage fall in GDP since the early 1980s.
"At the time of Budget 2010, the economy was still fragile as a result of the recession and the global financial crisis.
"The Budget last year had to respond to the Canterbury earthquakes.
"And yesterday, the 2012 Budget was delivered against the backdrop of considerable volatility in the markets as they continue to second-guess how the debt crisis in Europe will unfold."
Yesterday's Budget maintained New Zealand's international credibility and would help keep interest rates lower for longer, take pressure off the exchange rate and reduce future finance costs, Mr Key said.
- © Fairfax NZ News
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