John Armstrong 's Opinion

John Armstrong is the Herald's chief political commentator

John Armstrong: Uncertain times for govt finances

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Today's Treasury-produced 118-page pre-election fiscal update offers a Jekyll and Hyde-like mixture of both good news and bad news for Finance Minister Bill English.

The figures in Treasury's growth and other forecasts remain positive overall. National will be especially grateful the figures give the tick to its commitment to return to Budget surpluses by 2015.

However, the tone of the document is so pessimistic that it suggests the Treasury has little conviction that target date will be met.

One piece of jargon is peppered through the document: "risks are skewed to the downside". Translation: the only certainty is uncertainty and we are in the cactus if things really turn to custard in Europe and the United States.

The Treasury has included a "downside scenario" for the economy which, if it played out, would blow any hope of getting back into the surplus by the target date. Moreover, the Treasury says there is "at least" a one-in-five chance that the economy will perform worse than in the downside scenario.

This is a substantial shift from the Treasury's usually rose-tinted view of what is going to happen to the economy.

English says balancing the books by 2015 is going to be "demanding" and "quite a big challenge". The new mood of realism seemingly gripping his department suggests that is an understatement to say the least.

- NZ Herald

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John Armstrong

John Armstrong is the Herald's chief political commentator

Herald political correspondent John Armstrong has been covering politics at a national level for nearly 30 years. Based in the Press Gallery at Parliament in Wellington, John has worked for the Herald since 1987. John was named Best Columnist at the 2013 Canon Media Awards and was a previous winner of Qantas media awards as best political columnist. Prior to joining the Herald, John worked at Parliament for the New Zealand Press Association. A graduate of Canterbury University's journalism school, John began his career in journalism in 1981 on the Christchurch Star. John has a Masters of Arts degree in political science from Canterbury.

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