Key Points:

The civilities between National and Labour since the election last Saturday are well and truly over.

National yesterday accused outgoing Finance Minister Michael Cullen of recklessness and breaching conventions surrounding caretaker Government protocol for releasing a confidential Treasury paper on a gloomy economic outlook.

It was especially surprised that Dr Cullen released it around the time the Treasury's Debt Management Office closed a bond tender.

Treasury itself took the unusual step of issuing a clarifying statement emphasising that the figures were "very preliminary", that significant changes were possible and conveying the impression it was deeply unhappy its minister had released it.

It also said the Treasury had not been aware the document was about to be released - at 1 pm - when the DMO closed its bond tender at noon.

But Dr Cullen last night defended his action, saying he released the paper because Prime Minister-designate John Key, after his briefing from Treasury, was "pretending everything is all right with the world".

And while the figures in it were preliminary, they would only get worse.

He dismissed criticism that he had released a market-sensitive document when he did. He had not known about the tender.

And he found the argument extraordinary that information should be withheld from the market which could affect market reaction.

If that was applied to a private sector company, the Securities Commission would come down on them like a ton of bricks.

Mr Key and incoming Finance Minister Bill English received a briefing from Treasury on Wednesday, based on the nine-page paper Dr Cullen released, though they did not receive the actual document from Treasury.

The main finding in the report is that growth levels are likely to be hit even worse by the global financial market turmoil.

The economy would suffer from weaker export demand, lower commodity prices, lower housing values and weaker confidence.

The economy is expected now to sputter along at 1.3 per cent growth in the 2010 March year, pushing up unemployment to 5.7 per cent, compared to 5.1 per cent in the Pre-Election Fiscal Update (Prefu).

Mr Key said the scenarios were "a little bit worse" than they had been in the Prefu in early October. "They are more pessimistic but I wouldn't describe it as Armageddon."

Dr Cullen saw those comments as misleading the public and that prompted his decision to release the report yesterday. The paper was headed "In Confidence - Very Preliminary" but that was removed from the copy issued by Dr Cullen.

Mr English described the release as reckless. "Another day, another Labour dirty trick. You'd think the new leader of the Opposition would have put a stop to the dirty politics because the public are turned off by it."

The caretaker convention meant the incoming Government's approval was needed for the release of sensitive information.

Dr Cullen said it was his own report to release and simply an information report.

"I don't consider it a breach of the caretaker convention. It wasn't reckless."

TREASURY FORECAST
* Growth forecast: 1.3 per cent for 2010, down from 2.5 per cent in Prefu.
* Cash deficits: Up 1.4 billion in 2011 to $8 billion and by $1.7 billion in 2013 to $9 billion.
* Unemployment: 5.7 per cent in 2010 March year, compared to 5.1 per cent in Prefu.
* Total revenue: $2.5 billion lower over next three years.
* Consumption: Around $1 billion lower and GST to dip by about $100 million each year.
* Growth of top 20 trading partners to drop sharply to 1.8 per cent, down from 2.8 per cent in Prefu.

- NZPA