Analysis - Finance Minister Grant Robertson will not say it out loud, but he owes a great deal of gratitude to the previous National administration.
Photo: RNZ / Rebekah Parsons-King
The robust economy and better-than-expected tax haul that underpinned the budget surpluses and falling debt levels outlined in Thursday's budget are very much the products of former finance ministers Bill English and Steven Joyce.
Of course, National in 2008 benefited from the low debt position that Labour's Michael Cullen had delivered as the global financial crisis hit New Zealand's shores.
But governments are defined by what they do with the money.
National prioritised returning to surplus as the books took a hit from the financial crisis and the devastating Christchurch earthquakes, before opening the spending taps more fully.
Labour is focused on fixing run down public services and spreading the benefits of a growing economy more evenly.
Mr Robertson played a conservative hand on Thursday after December's mini-budget rolled out big ticket items like the $5.5 billion Families Package and $2bn Kiwibuild programme.
He used the tax windfall to increase new operational and capital spending to $40 billion over four years to fix the "nine years of neglect" under the previous Government in key areas such as health, education and housing.
"Budget 2018 lays the foundation for New Zealanders to have better lives in the decades to come," Mr Robertson said.
But he clung to his self-imposed Budget responsibility rules to keep spending under 30 percent of GDP and net debt on track to hit 20 percent of GDP by 2022, much to the dismay of supporters who had demanded he do more to fix run-down public services.
"This Budget will assist the most vulnerable New Zealanders but it will not rid New Zealand of the combined plagues of homelessness and child poverty," Salvation Army social policy and parliamentary unit official Major Campbell Roberts said.
Financial markets remained unmoved, while business gave guarded approval.
"What business needs to see from government is more of what this budget delivers, which is clarity and certainty in certain areas," Business NZ chief executive Kirk Hope said.
Initiatives to support business growth included $29bn over ten years for fixing Auckland's congested roads, the $1bn Provincial Growth Fund and the establishment of a research and development tax credit.
Mr Robertson also gave a financial nod to shifting the economy to a low-carbon future, with the $100m Green Investment Fund to encourage the private sector into these areas.
But business warned that robust economic growth and budget surpluses could be undermined by other policies such as its proposed changes to labour laws.
Employers and Manufacturers Association chief executive Kim Campbell said firms could stop investing and hiring if unions received more power.
"I can't overstate how big a problem it may be. I know I sound like Chicken Licken ... but I'm telling you, what's coming is bad," Mr Campbell said.
The government's ambitions rely heavily on Treasury's economic forecasts being realised.
Treasury is forecasting growth will average 3 percent a year over the next four years, peaking at 3.6 percent in late 2019, before easing back to 2.5 percent by 2022.
Economists are picking average growth will be lower, due in part to capacity constraints which will dampen investment in areas like housing.
If that comes to pass, the government will have less revenue to fulfil its promises.
Wage demands from nurses and teachers may also put pressure on Mr Robertson's spending plans.
"The current government is now well into its honeymoon period; the true test of its ability to manage the nation's books is now only just beginning," BNZ head of market research Stephen Toplis said.