There is an opportunity to do something of significant value to the national economy

May might be the merry month of spring in the Northern Hemisphere but here it is Budget month.

From now until the economic prospectus is read to Parliament, every utterance of Bill English will be analysed for a hint of how good this Government might be.

This is the big one. John Key's Government might last a long time on his likeable manner and Steven Joyce's tactical judgment but if it is ever going to do something of significant value to the national economy, it will do it now.

Next year it will be playing safe for the election. If it wins, future Budgets will follow the course it was on when it won a second term, the course it will disclose on May 20.

Its prospects of winning the next election got even better this week when Labour announced it would restore the top tax rate to present levels, but we need more than a transfer of tax from incomes to GST.

Key, English, Joyce and Co know what the economy needs them to do. We all know. New Zealand invests too little in activities that create national wealth and too much in property.

Property can create personal wealth but it doesn't add to the stock of goods and services that can be sold from this country.

This Government is the first in my lifetime to be presented with a golden opportunity to do something about our property addiction.

We overdosed badly in the house price boom to 2007 and ever since we have been in a double-bind: prices are not rising to give the propertied a capital gain, or falling enough for those without property to afford their first house.

The Government has received powerful suggestions from the Treasury and a forum of accountants, the Tax Working Group, about how it might shift some taxation from incomes and profits to property and consumption.

Neither advocated capital gains tax but they went as near as they dared and, for the first time that I'm aware, a mere mention of the tax didn't cause a national uprising.

Familiar objections followed: property is taxed no differently from any other business. All can write off costs against other income, capital items can be sold tax-free.

But property is not like any other business, it is an exchange of an asset (land) that the country possesses in finite quantity. Investment rarely creates any more of it, which is the reason its price rises.

That is not the reason most people give for preferring property. They choose it because land is solid, permanent, can't disappear overnight, and they can see no other safe investment in this country.

Rising demand for a finite asset has made property more secure than any other type of asset save Government bonds - which should have given Bill English an idea.

New Zealanders put their personal savings into second houses because they are not inclined to study the sharemarket, do not trust others to manage their funds and don't understand bonds.

Bill English has often told us he is borrowing $240 million a week to finance the debt that has been climbing ever since the 2008 recession blew away tax surpluses.

He is borrowing that overseas. He could borrow more of it at home. A bond issue would offer a gilt-edged alternative to the property market that could soften a political backlash from property taxation.

It would find subscribers among those who will gain most from income tax cuts. They would be lending back revenue they would otherwise leave in banks until they see the Budget's effect on the property market.

Bonds should be welcomed by the folk who lament foreign investment and external debt. They could put their money behind their words.

More important, bonds would be kind to exports because borrowing internally would not lift the exchange rate when the Reserve Bank starts to raise interest rates later this year.

Bonds would attract the well-off who can avoid tax, and will continue to avoid unless English aligns the top rate with the company rate.

He has frequently cited the Inland Revenue survey of 100 of our wealthiest individuals that found only half of them paying the top tax rate. That suggests something significant may be coming on May 20.

But then there was his response last week to Sam Morgan, the IT entrepreneur who thought he should have paid some tax on his $700 million sale of Trade Me. "He could look to just write out a cheque to IRD. They won't send it back," English cracked.

Morgan's candid testimony to the gaps in the tax system would be a gift to a Finance Minister about to fix them. Scoffing suggests English already knows he will not deserve it. For all our sakes I hope I'm wrong.