A sustainable budget surplus is beyond the government's control, as Joe Hockey has come to realise | Warwick Smith

Surpluses effectively 'privatise the deficit' by making the public rack up debt. Is this worse than public debt? It depends if you're a banker

Joe Hockey, the treasurer, now concedes he may not be able to deliver his promised budget surplus any time in the foreseeable future. This news is good for private savings because, when the government runs a surplus, the non-government sector must run a deficit.

This is a simple reality of macro-economic accounting. There are only so many Australian dollars. If the government taxes more than it spends (a surplus), it is taking more dollars out of the private sector than it is putting in. Assuming exports equal imports those dollars can come from only one place - private domestic savings. Everyone's surplus is somebody else's deficit.