The ground has moved now surplus sussed

TRACY WATKINS
Last updated 05:00 16/05/2014

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Less is no longer more, it seems. After preaching belt-tightening for six years, Finance Minister Bill English opened his wallet yesterday for an election-year Budget pitched squarely at middle New Zealand with a boost to families from an expansion of paid parental leave and extending free doctors' visits to children under 13.

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At half a billion dollars over four years, the package is at the restrained end of an election-year lolly scramble.

But the Budget documents tell only half the story.

After reaching the holy grail of a return to surplus, English and Prime Minister John Key have left enough in the war chest to spread more money around once they hit the campaign trail proper.

They have even begun the slow striptease before potentially unveiling "modest" tax cuts pitched at middle-income earners.

With the surplus projected to grow to $3.5 billion within four years, it is inevitable the debate will turn to one on priorities now the books are back in the black.

It will be a difficult line for National to walk, painting tax cuts as more fiscally prudent than spending promises by their opponents, like Labour's baby bonus, or the promise National filched yesterday, to extend paid parental leave.

But tax cuts got only a glancing mention in the Budget documents - English was hardly going to get too far ahead of himself on a day that was supposed to be all about trumpeting the triumph of a steady hand on the economic tiller.

The return to surplus has been National's touchstone promise for so long that any rush to spend too much might have seemed unseemly.

But yesterday's sweeteners are also a nod to middle New Zealand, which is hurting from the triple whammy of modest wages, steep mortgages and household budgets being squeezed by rising fuel and energy prices.

Small measures like free doctors' visits will take some of the pressure off those household budgets without creating the impression that the chocks are off.

It also squeezes the Opposition, who can only complain that the Government is not doing enough.

But for a long time, the Government has been able to frame the political debate around the return to surplus. For the first time in six years, the ground has shifted.

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- The Dominion Post

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