Michael Cullen wasn't kidding. The cupboard is indeed bare. Having sat on record surpluses for the last seven or so years, Cullen is now telling us that "The rainy day has now arrived". There's just one problem - he's spent everything he was saving for the rainy day!!
Stuff carries the first story from the lock-up.
Government debt will rise to 24.3% of GDP by 2013. Budget deficits are forecast for the next 10 years. A cash surplus of $2 billion in the year to June will be falling to a projected cash deficit of $5.9 billion in 2008/2009 and further deficits over the next four years rising to $7.3 billion by 2012.
And that's not all. The NZ$ is tipped to lose 22% by 2013, unemployment is headed back over 5%, and inflation is headed for 4.5% next year.
Overall, it's a pretty gloomy picture. Cullen can blame global economic conditions all he likes, but the fact remains that he has presided over eight pretty prosperous years, and left the economy in a state where it is now basket-case-like. If he can't manage the economy in the good times, why would New Zealanders TRUST him to manage it in times of adversity? And after all, as Helen Clark said - "This is an election about trust".
UPDATE: Courtesy of Lindsay Addie via Kiwiblog, here's the link to the Treasury PREFU report