The man from Standard and Poor's went into his Budget briefing this week believing National "has a strong history of fiscal conservatism". What gave him that idea?

National likes the language of fiscal conservatism - "savings, efficiency, balancing the books" - but for most of its history it has been the more extravagant of our two parties.

Born from the ruins of a rural-liberal coalition that had taken a conservative approach to the Great Depression, National watched the first Labour Government create a welfare state and decided to join it.

In rising post-war prosperity Labour became the more financially scrupulous party, losing office in 1949 because National promised to end wartime rationing.

It was the 1951 waterfront dispute that put National in the box seat of our politics during the era of social security. It could always tap voters' visceral distrust of Labour's trade union connections.

By 1958, National had abandoned even the pretence of fiscal conservatism. When Labour, briefly back in office, responded to a balance of payments problem with higher taxes on petrol, liquor and cigarettes, National called it a "black budget".

Through the 1960s people complained they couldn't tell the parties apart. The most generous new benefit of the age, a no-fault accident compensation scheme, was installed by National.

In 1975, National defeated another one-term Labour Government by trumping its savings scheme for national superannuation. National offered the full benefit immediately from taxation - a pension at 60 regardless of other income.

It was precisely the benefit Michael Joseph Savage had been persuaded the country could not afford at the birth of social security. And responsible members of the National Party in 1975 knew the country still could not afford it.

But it took a fourth Labour government to restore a means-test, in the form of a tax surcharge on pensioners who also had private incomes. Again, National preferred the popular course. It went to the 1990 election promising to abolish the surcharge, which was not wise because this time it did have fiscal conservatives in powerful positions.

Ruth Richardson and Jenny Shipley, with glorious feminine disregard for false popularity and long careers, not only reneged on national superannuation but cut a range of welfare base rates.

They committed the cardinal Keynesian sin of reducing public spending in a recession, thereby killing inflation and generating a recovery that was so rapid the public accounts went into surplus within three years.

It was all too scary for their colleagues, nearly costing National the 1993 election. Richardson was discarded. Her successor, Bill Birch, was conservative on the spending side of the ledger but handed out tax cuts before the surplus had been tested over a business cycle.

Michael Cullen erred the opposite way. He guarded the surplus against constant pressure for tax cuts, from National, but the long boom encouraged Labour to introduce some big new social commitments - state-paid maternity leave, free childcare, welfare that extended to big families on high incomes, interest-free student loans, retirement savings subsidies - that we discovered last year we cannot afford.

When the country went into recession for the first time in a decade, the surplus not only disappeared in the Treasury's pre-election fiscal update, it was projected to disappear for a decade.

And here's the thing - that projection was built on figures that predated the global financial crisis that struck with a vengeance in September. Labour's overloaded budget could not survive even last year's mild domestic recession.

A decade is far longer than the cycle over which even a Keynesian like Cullen could tolerate a deficit, and sooner or later a government will have to do something about it. But on the evidence of this week's effort, it will not be this Government. We saw its weakness exposed on Thursday.

Politically, John Key and Bill English will never be better positioned than they were this week to take some hard decisions. In this global crisis, voters would understand any urgent measures.

We could accept the need to cut back on welfare for the fairly rich as readily as we have accepted the cancelled promise of two more tax cuts.

The political climate is unlikely to be as favourable next year when the gloss of a new government is wearing off and the recession is giving way to an achingly slow recovery.

If the man from Standard & Poor's believes this Government will get tough next year, I don't want to enlighten him.

But the credibility of this country's public accounts have been the best thing going for the economy for a long time. Without low public debt we would not have the exchange rate that sustains our current living standard.

National's fiscal weakness is going to let us down again.