Surplus a question of perspective

The Government's surplus is massive.

The measure favoured by Finance Minister Michael Cullen - the operating balance before revaluations and accounting changes, or oberac - is forecast to be $7.4 billion in the year to June and $6.7 billion in the 2005-06 year.

The numbers have fed calls for tax cuts but Dr Cullen argues it is not a great pile of cash available for spending or tax cuts.

Budget 2005 explains that the $6.7 billion forecast will be mostly eaten up by the NZ Superannuation Fund, capital equipment and investment, student loan advances and Reserve Bank funding.

Tax cut supporters say there's a case that some of the money for those items could come from borrowing.

So while Dr Cullen is right that the surplus is mostly spent, his opponents argue that he chose to spend it - and had other options.