As good news continues to emerge about the government’s fiscal position leading into the budget, it is worthwhile reminding ourselves of recent reforms that put New Zealand into an internationally enviable position.

Primarily, the government’s response to the global financial crisis was to make it easier to employ people, keep them employed, and keep more of their own money.

This took the form of reduced KiwiSaver contributions (now increasing again as conditions improve); introducing probationary periods for employees; scaling back the symbolically rich but practically ineffective emissions trading scheme; and reviewing and reforming the Resource Management Act to make it more business friendly.

There were also substantial reductions in corporate tax and personal income tax rates, as well as an increase in the GST to help give the tax system more integrity and realign habits away from consumption towards saving (although this was also depressing evidence of the ratcheting-up effect consumption taxes experience over time).

On the public service management side, there has been a sinking lid on state sector employees, a suspension of payments to the Cullen Fund (government borrowing with one hand to finance government investment funds with the other), and spending caps on areas outside of health, education, and welfare sectors. While it can be correctly noted that real cuts cannot be made without tackling health, education, and welfare, spending increases have come to a halt in other areas.

Lay the Christchurch earthquake on top of this, and New Zealand is edging toward a respectable 3% growth (and was a whopping 1.5% last quarter). Most of the government’s changes are positive and it looks like we will achieve a bigger surplus than expected.

While there are certainly arguments over where the government could have or should have gone further, the medium-term fiscal strategy has been relatively successful, and has been so because of sensible choices.

The importance of evaluating choices and trade-offs is important but often underrated: Just look across the ditch at Australian Treasurer Wayne Swan. A mining boom, record terms of trade, increased tax revenue in five out of the past six years – and no surplus expected for a decade.

We look forward to the budget.