Robertson vindicated

The headline forecast in the latest set of Government accounts of a mere $1.7 billion surplus in the current year should be very helpful to Finance Minister Grant Robertson.

It should help to silence those people who hassle Robertson week in and week out to breach his Budget Responsibility Rules and borrow a lot more for every deserving cause in the first year of the new Government.

The last financial year ended in an unexpectedly high surplus of $5.5b, it was revealed in October, although some of that was explained by timing issues.

The headline surplus at the time may have emboldened groups such as teachers to hang out for more than the already generous offer the Government put on the table, $700 million over four years.

The $1.7b surplus, albeit also down to timing issues, vindicates Robertson’s steadfast adherence to his own rules in order to protect the economy from a possible global shock.

While the combined surplus figure over a couple of years evens out to a slightly higher surplus overall than was forecast in the May Budget, it is a reminder of how vulnerable the economy is.

The timing is exquisite. The chaos in the coming three months surrounding the exit of Britain from the European Union is likely to continue despite Theresa May surviving a no-confidence vote yesterday.

A no-deal could have ripple effects around the world.

The trade trouble between the United States and China could well be just starting and the effects could be more like a wave than a ripple.

Robertson has maintained his credibility with this set of books, and that is important for someone with only one year under his belt.

He vowed again yesterday to stick to the goal of keeping net debt no higher that

20 per cent of GDP within five years of taking office

— which has already been achieved.