Alright, let’s talk about the government accounts.
A huge congratulations to Grant Robertson, he’s locked in his reputation as a Finance Minister who can balance the books.
He’s delivered a bumper surplus of $7.5 billion. That’s way more than anyone expected and it’s better than any of Bill English’s accounts.
He’s beaten his own target of getting debt to under 20 percent of GDP.
His aim was to get there 2021/2022. Well, he’s got it down to 19 percent so he’s there two years early.
Yes, it’s early days, but it’s clear Grant Robertson knows what he’s doing and if things carry on like this his reputation will be solid.
It’s not an easy job to hold onto the cash when you’ve got three coalition parties all trying to get their hands on it.
But there was always going to be a but, but the details.
Number one, that the surplus isn’t really as good as it looks.
A third of it is just a surplus on paper.
Kiwirail it turns out is $2.6 billion more valuable than we thought, so that’s like getting your house valued and it turning out to be worth more than you thought it was.
It’s not actually bringing in any more money this year, you’re just richer on paper.
And a billion dollars or so of that surplus is also just the result of IRD changing the way it books taxes, so it's not really comparable with last year.
So the surplus is really $3.9 billion dollars, not quite the record surplus it’s been hailed outdone by two of English’s surpluses, but still impressive enough.
The second but. This doesn’t shut down business gloominess. Don’t fall into the trap of thinking this proves business wrong, it doesn’t.
Business isn’t grumpy at government for the way it manages the books, it’s grumpy about predominantly two things. That this government is passing laws that make it harder to do business and that it’s not spending enough on roads so a bumper surplus doesn’t change that.
This surplus will help government to win business if it wants to.
But we’ve said it before and we’ll say it again.
Spend money on roads.
There’s a huge surplus there, so spend it on the roads that business is begging for.
It’s really up to Robertson how wants to play it.
He can either make business gloomier or friendlier, or he can either win business over by spending, or he can make them even more angry.
They know how much cash there is, we’ve seen the books today.
If Robertson continues to resist plea to spend it on roads, how do you think that’s going to go down with business?