The Dom-Post this morning reports the gloomy news that not only does New Zealand face a decade of deficits; the extent of that level is worse than we imagined. How bad is $50 billion? The Dom-Post drops a hint:
The recession was expected to blow a $50b hole in the economy during the next three years, plunging the Government further into the red as costs climb and tax revenues fall.
"That's $50 billion we will not recover as a nation, and $50 billion that cannot be taxed by the Government," Mr English told a business audience in Auckland.
Of course, Labour races to distance itself from any fallout:
Labour leader Phil Goff said the Government was softening the public up for a broken promise on tax cuts.
"I think [Mr English] is making the situation as black as he can in order to justify breaking a promise on tax cuts and slashing services to New Zealanders."
Sorry Phil, but it doesn't work like that. You and your mates, especially the good Dr Cullen held the purse-strings for the last nine years, and this is your legacy and his. Less than six months has passed since the last election, but Phil seems determined to re-write history. He won't get away with it here!
Sure, the global economic situation is not flash, and has undoubtably contributed to our financial woes. But we do not for one moment subscribe to the view that Michael Cullen was a great Finance Minister - in our opinion, he was anything but. And he foreshadowed the black hole almost a year ago:
The cupboard is almost bare and that is the way Michael Cullen planned the 2008 Budget.
He has delivered a Budget that offers a little of something for almost everyone but his biggest gift is to National - an election-year headache.
There is so little cash left to play with, $1.75 billion, that National will have little headroom to make attractive tax promises without saying what funding commitments Labour has made it will scrap.
That is what Michael Cullen promised and that is what he has delivered. The $1.75 billion isn't real either because $750 million of it was earmarked for health long ago.
Phil Goff's revealing comments this week showed that Labour is into legacy politics and this is a legacy Budget - a legacy to National. It will make it harder for National to win and if it does win, it will make it harder to govern.
Cullen can walk away from politics, but his legacy will be a millstone around our necks for years to come. And Goff may play the role of the injured innocent today, but Audrey Young's comment above, dated 22 May 2008 make it plain that this is exactly what Labour wanted.
Meanwhile, ask the 250 about-to-be-redundant IRD staff what they think about the former government inflating the public service to mask unemployment. We suspect that the replies would not be complimenatary towards the good Dr Cullen.
As we said in a post on Kiwiblog some time ago, it's fitting that Cullen was, in a former life, a lecturer in economic history - because he's done his best to make New Zealand's economy history!