Tax policy: Cash on hand

The cash position – a figure Dr Cullen highlighted in this year's Budget instead of the much higher operating balance – is predicted to deteriorate sharply from a $2.4 billion surplus last year to near balance this year and to deficits averaging $1.9 billion over the next three years.

Dr Cullen has lauded Labour's stewardship of the Government's accounts but says two factors have to be kept in mind. One is the deteriorating cash position. The second is that the ageing population requires a conservative fiscal strategy now by reducing debt and partly pre-funding future superannuation costs.