The Conservative government has announced a federal budget surplus of $13.2 billion in the last fiscal year -- and $2 billion in spending cuts over the next two years.

Finance Minister Jim Flaherty said Monday the surplus would go entirely to reducing the federal debt, a move that he said would save hundreds of millions next year in interest payments on that debt.

Asked on CTV Newsnet's Mike Duffy Live why the government wouldn't make any new spending commitments, Flaherty said: "We're not like the last guys," referring to the Liberal government of Paul Martin.

"They would spray money all over the place, often in areas of provincial jurisdiction, causing all sorts of problems," he said.

Flaherty said the Tory government would be much more disciplined and focus on paying down debt.

On spending cuts, Treasury Board President John Baird said the government looked at value for money and "looked at whether it was a proper role for government to be in."

Here are some of the cuts:

• Research on medical marijuana, which cost $4 million per year
• $5 million from administrative savings from the status of women agency.
• The $11.7 million in unused funding for a mountain pine beetle program.

That cut comes on a day when a federal government report claims B.C.'s mountain pine beetle infestation could start affecting other species and spread across the country.

CTV's Robert Fife said other cuts included for social housing and a court challenges program used to advance minority rights for groups like gays and lesbians. "Most of those cuts are designed to appeal to the Conservative base. They've taken the axe to programs they've long regarded as slush funds for left-leaning groups that don't vote Conservative ... all this means the socially conservative government is getting even."

Baird said the savings would be redirected to higher-priority spending.

The Canadian Taxpayers Federation says there is both good and bad news behind the expected announcement.

Ottawa's debt will stand at $481.5 billion after the payment is made; eight years ago the debt stood at $562 billion.

"So over the years progress has been made, and every time we pay down debt it means we're saving money on future interest payments. So that's the good news," John Williamson, the CTF's federal director, told CTV Newsnet.

But the bad news, he added, is that the $13.2 billion surplus is further proof that Canadians are being overtaxed by the federal government.

"This surplus exists because we're all just paying taxes that are too high. Ottawa is able to meet its day to day spending commitments at existing tax levels and still records this monstrous surplus."

Flaherty said he thinks taxes are too high, and noted the tax cut measures in the first Conservative budget this spring.

"There's more to be done. We want to reduce taxes more, and we have more platform commitments to fill," he said.

With files from The Canadian Press