The Government reaffirmed its commitment to have its books back in surplus by 2015 but at $75 million, the surplus remains in the category of margin for error.
Finance Minister Bill English said the operating balance before gains and losses (obegal) of $75 million was a sharp improvement from a deficit of $18.4 million in 2011.
Net core Crown debt was forecast to peak at 28.7% of GDP in 2015 and fall thereafter. Longer-term projections showed net debt dropping to 17.6% of GDP in 2012.
''This is a remarkable turnaround. We came into office in a recession, were rocked by the global financial crisis and were confronted by one of the most expensive natural disasters in history. To now be so close to getting back to surplus and starting to repay debt is a real achievement.
''However, although good progress had been made, there was still much to be done, he said.
While it was ''entirely appropriate'' to take on more debt over the past few years to support the economy and cushion New Zealanders and their families, that could not continue indefinitely.
In dollar terms, net debt was still rising by around $130 million a week and was expected to peak at $70 billion in 2017. That was around $15,000 for each and every New Zealander, Mr English said.
''As households know, carrying substantial debt is neither comfortable nor financially prudent.''
The Budget had freed up a further $1.5 billion by redirecting spending to where it delivered the best results, he said.
That took the total amount of reallocated spending since 2009 to $14.9 billion.
At a time when the Government's finances were constrained, reallocated spending allowed significant additional funding for new or proven initiatives that got better results, Mr English said.
''It's about spending well, not spending up. Governments should be judged on what they achieve rather than on what they spend. The value of our spending is a better measure than the amount of our spending. This Government is focused on results, and it's paying off,'' he said.
Rating agency Standard & Poor's said the Budget would have no immediate effect on ratings and outlook. The budget projections were broadly in line with expectations.
Overall, New Zealand's credit ratios remained consistent with the AA foreign currency rating, S&P said.
''We continue to expect the Government to remain committed to its medium-term fiscal strategy of targeting operating surpluses and limiting the central government's net debt of 30% of GDP. We believe New Zealand's strong political and community consensus for prudent fiscal management will support this fiscal strategy,'' S&P said.
Westpac chief economist Dominick Stephens said that despite the minor shuffling of spending, the Government remained on track to achieve a surplus.
''The surplus remains small at $75 million. But in a way, Government has introduced spending initiatives so that it continues to sail close to the wind, implying a degree of confidence around this target. It could have simply let the surplus widen. It chose not to.''
The Treasury expected the economy to grow modestly over the next four years, he said. Growth was expected to reach 2.5% in 2013 and stutter to 2.4% in 2014 before peaking at 3%.
That seemed conservative, Mr Stephens said. Westpac was forecasting growth at 2.9% and 3.7% respectively over those years. The major difference appeared to lie in private consumption.
''In our view, more household spending will result in higher inflation and lead to sooner interest rate rises than both the Treasury and the Reserve Bank are factoring in.''
The books
• Surplus of $75 million in 2015.
• Inflation to remain below 1% this year and 2% next year.
• Unemployment to remain above 6% for next two years.
• Budget spending to increase to $1 billion next year.
• Contributions to NZ Superannuation delayed further.
