Finance minister Tom Marshall said Wednesday the government plans to use its surplus to pay down on its debt.

Newfoundland and Labrador's opposition parties are divided over the government's plan to pay down debt after the finance minister announced its midyear financial update.

The province announced Wednesday it's projecting a huge increase in the surplus because of higher than expected oil prices and production. Finance Minister Tom Marshall said the government will run a surplus of $755 million this year.

"We projected a modest surplus for this year — this year being 2011/2012 — a surplus of $59.1 million. But because of these revised numbers, we've revised the surplus now to $755.8 million," said Marshall.

"This money will be paid directly on our debt or the additional funds will go directly on our debt."

While Liberal finance critic Dwight Ball agrees that the government should pay down on its debt, he said he's concerned that the government's budget day projections are off by such a large amount.

"We do realize that the variances are an impact, but we need to find a way to get some consistent budgeting in place so that we can depend on our budget." said Ball.

NDP Leader Lorraine Michael disagrees with the plan to use the bulk of the surplus to pay down the debt.

"It's almost obscene, the size of the surplus," said Michael.

"The disturbing thing for me is government's nonchalant way of dealing with it. Everybody is supposed to be very pleased with it, yet they just see it as an opportunity to put more money down on the debt."

Michael said the $755 million should be used to pay for seniors' needs, municipal infrastructure and secondary education.

Meanwhile, the St. John's Board of Trade vice-chairperson Denis Mahoney is applauding the government's decision, and is comparing paying down the debt to tackling a credit card balance.

"What choice do you make? Do you go out and make some new expenditures by buying new things for your home or do you go out and take some or all of that money and pay down the debt you put on your credit card?" said Mahoney.

While Mahoney is behind the province's plan, he said the province should do more to diversify the economy.

"It's excellent to say we have our natural resources, we have tourism as another example as a bright light, but we do believe that government should continue to focus on economic diversification," said Mahoney.