Things must be bad.
Bill English had to swallow the proverbial dead rat this morning and effectively acknowledge that Michael Cullen had done something right in his stewardship of the Government's finances in the past nine years.
Having condemned his predecessor for many years for paying off debt too quickly, English said: "I want to stress that New Zealand starts from a reasonable position in dealing with the uncertainty of our economic outlook."
"In New Zealand we have room to respond. This is the rainy day that Government has been saving up for," he told reporters at the Treasury briefing on the state of the economy and forecasts.
English pointed to a graph of the debt track since 1972 and projected five years out from today.
The recent low was 17 per cent of GDP and the ghastly projection for 2013 is 33.1 per cent and possibly worse, under what Treasury calls a "downside scenario" - 38.6 per cent.
Unemployment is forecast to rise to 6.4 per cent in 2010 and deficits forecast to be $2.4 billion to $3.5 billion larger over the 2010 to 2013 years than forecast just before the election.
In the midst of the horrible outlook and depressing uncertainty about how bad it might get, English was forced to change his message about his inheritance from Labour because it was more important to inject some sense of positivity into the situation. He needed to do it for both political reasons and for real financial reasons.
As Labour finance spokesman David Cunliffe said yesterday, too much negativity could drive confidence down even further.
Of the plan that Cunliffe demanded of English today, the Finance Minister said: "The plan in essence is quite simple, that is to maintain significant short-term stimulus in the economy, to protect people from the sharp edge of recession and secondly to get on with the job of raising our longer term growth prospects...with some urgency."
Tax cuts are on the way; decisions will be made in the New Year on which infrastructure projects will be brought forward and English and Prime Minister John Key will be meeting chief executives of Government departments this afternoon to give them the bad news: don't ask for any more money in Budget 2009 because you won't get it.
Things are very bad.
Pictured above: Former Finance Minister Michael Cullen pictured in October, his last month in the job. Photo/Brett Phibbs