Surplus no big deal, ask the PM

IN THE history of budgets, has so much attention ever been paid to something so essentially meaningless?

The ongoing obsession with whether the Government’s books are in surplus this year reached an absurd peak in Andrew Little’s preBudget speech on Wednesday.

The Labour leader claims it represents ‘‘one of the biggest political deceptions in a lifetime’’ because National knew during the election campaign that it would not hit a target it set in 2011.

All we can really take from that statement is that Little, an MP for less than four years, can’t have paid much attention to political events before he came to Parliament.

In case you have missed the news, despite years of promises, barring a major windfall, the Government will not reach surplus in the year to June 30 (and even next year’s surplus is looking touch and go).

We won’t even know this for certain until October, but in Thursday’s Budget, Finance Minister Bill English will be forced to walk into Parliament and present his books, showing a seventh straight year in the red.

Exactly how significant is the surplus really? It feels like it should be – almost every household knows the importance of living within its means between pay cheques.

But give or take a few hundred million dollars, a government surplus means precisely nothing. Close enough is actually good enough. The dollar will not fall, jobs will not be lost, house prices in Auckland will probably continue to climb. And yet this week, it will be the number most MPs, their staff and the media, look for first in the Budget documents.

In defence of Little, he did not create this focus, John Key did. It was National that made this week’s Budget a key moment in the National Government’s history.

Ever since the devastating Christchurch earthquake in February 2011, barely a week has gone by when the Prime Minister or his deputy haven’t repeated the promise to end a growing string of deficits this year.

It wasn’t just another target, it was the central target; a yardstick against which it claimed to be prudent managers of the economy, which had overcome bloated public spending, the global financial crisis and the shocking and costly earthquake.

Before the election, close was not good enough. Officials were apparently told in no uncertain terms, Key did not care whether it was $2: the last Treasury forecasts before the election had to show a surplus.

Then in recent months, when it became clear that there was no easy way to juggle the figures to balance the books, what was for years a ‘‘commitment’’ became ‘‘artificial’’. We could get there if we really wanted, Key said. Forget it, move on. Here’s Prince Harry!

It is not the deception that Little claims, but the missed surplus is still a failure on the part of a government averse to taking risks or making major reforms.

If he wants to shift attention onto something else, and convince everyone Government has bigger goals, Thursday might be a good time to come up with something.

Give or take a few hundred million dollars, a government surplus means precisely nothing.