Meanwhile, JustLeft has an excellent post on how big a surplus we should be running, informed by considerations of intergenerational equity regarding capital expenditure. It's unfair that today's taxpayers pay the full cost of things like roads that will be used by future generations, and funding through debt seems justified in order to fairly allocate the cost. Looked at this way, we should be running a much smaller surplus - about half the current size, in fact.
Like National, JustLeft sees the surplus as an opportunity. But rather than being an opportunity to redistribute wealth to the already rich, he sees it as an opportunity to restore and rebuild public services to ensure greater equity today. His picks? Student loans, the working for families package, and health. I favour the latter myself: despite the intergenerational atrocity of the student loan system, slashing waiting lists and rolling back usage charges on primary health care so that people can actually see a doctor when they're sick (rather than showing up at A&E later needing a hospital bed) seems to be the priority. Health has a tremendous impact on people's ability to fully participate in society and on life satisfaction; guaranteeing it (or rather guaranteeing rapid treatment) is one of the foundations of a decent society and a core duty of any government.