KEY POINTS:
As the weather turns foul and we speed through autumn into sudden winter, so the economy experiences a similar drop in temperature, leaving Kiwis feeling distinctly exposed.
There is now startling evidence of how fast the brakes have gone on the economy. News came on Thursday that there
are suddenly 29,000 fewer of us with paid jobs, according to the Household Labour Force survey.
After a decade of strong employment growth that dramatic fall came in just the first three months of this year.
Labour Minister Ruth Dyson tried to put the best possible spin on it, declaring those figures did not mean there were 29,000 fewer jobs, it simply meant that 29,000 people had left the labour force, probably for a variety of reasons. That's a little disingenuous.
Admittedly, some are baby boomers heading grumpily into retirement, some are Generation Y who are getting pregnant and taking time off, and there's the usual exodus of Generation X backpacking their way across the planet. However, usually one would expect recently graduated or returning workers would have taken their jobs.
Combined Trade Union economist Peter Conway, who is unerringly cheerful whenever he tries to explain an apparent failure in Government economic policy, tried his own spin. He claimed the drop in women in paid employment was probably due to the glories of the Government's Working for Families scheme reducing pressure on family incomes and allowing one parent to stay at home.
Who is he trying to kid? Has he not seen the recent figures showing the escalating pressure on people's disposable incomes and the fact that low and middle-income families are plunging deeper into debt and getting crunched in the credit squeeze?
The plain fact is that we are suffering the biggest drop in employment in nearly two decades and the truth is, fewer jobs are out there now than there were at Christmas.
The Government can bury its head in the sand but in the next three months more jobs will evaporate as the economy slows its way into recession.
One economic analysis shows half the jobs created in the past three years were in the now-vulnerable construction, finance, property and business services sectors. Another third were created in retail. As the economy shrinks so do the number of jobs in those areas and as many as another 60,000 jobs could disappear in the next three months.
While international factors have played a large part in what Michael Cullen euphemistically calls a "slow down" (actually, it is more like a four-wheel-drift with the brakes locked) the Government and the Reserve Bank must take some of the blame for making the problem worse than it should be.
The money markets are now betting Reserve Bank governor Alan Bollard will start to ease interest rates to try to stimulate growth.
He is six months too late. It was patently obvious last year we were headed for trouble and he should have moved then.
When it does finally happen it will take some of the pressure off household incomes, and the corresponding fall in the dollar will rev up the export sector eventually, sending a little more cash into the economy. Yet this will not happen overnight.
For the next couple of years, expect to see higher unemployment, longer queues for food banks and more mortgagee sales - in short all the usual side-effects of a depressed economy. For Gen X and Gen Y, who have never experienced those conditions, there will be real anger, politically. Even if Labour survives the election it will experience a savage backlash among younger voters.
Cullen's budget is still to come and he may move swiftly to ease the burden people face, but there has been little evidence of joined-up thinking in Labour's approach in recent months.
Yes, there is the prospect at some point of some modest tax cuts aimed, according to Cullen, at low income earners. Yes, Helen Clark did decide to delay the implementation of some of the punitive taxes on petrol for a couple more years.
But the majority of mortgage-belt New Zealanders, who languish largely ignored in the hard-pressed middle-income bracket, have little hope of relief. The Government's ill-conceived emissions trading scheme is set to soak billions of dollars out of households and small businesses and large corporations and agriculture will get a free ride for many years.
This has been a brilliant fair-weather Government, cruising through calm economic times. Conditions have changed yet it seems incapable of changing course. Batten down the hatches, guys, it can only get worse.