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.