Key Points:

Even in the best of times, finance ministers choose their words with care. At the beginning of a year which is likely to witness the worst of times, Bill English is understandably selecting his words with even greater caution than normal.

Faced this week with the gloomiest survey of business confidence in the past 40 years, the finance minister stated the obvious: New Zealand could not roll back the tide of international recession.

However, he added that the Government did have the capacity to take the "sharpest edge" off the deepening economic downturn.

On the one hand, this was a message of reassurance - that the Government could do things to ameliorate the impact of recession. On the other hand, it was an understated warning that there are limits on how much it can do.

English's colleagues in the minority National Administration believe there is a high degree of public realism about the Government's limited ability to combat something outside its control.

At the same time, National is not so foolish as to ignore that fundamental rule of New Zealand politics - that when some problem emerges, then the Government is expected to "do something" about it.

The pressure to "do something" is only going to intensify in coming months as the dole queues lengthen.

That is one reason why the Government is not going to be panicked by Labour into coming up with a mini-Budget or some other "big bang" package of initiatives in the short term.

No sooner had such a package been unveiled then there would be cries for more. The policy cupboard stripped bare, the Government would find itself being castigated for doing nothing at the time the recession was really biting.

The danger is that the Government would lose all momentum and start to drift. When governments drift, things really start going wrong internally. Such an eventuality would be fatal in the depths of recession.

National might then be panicked into doing something for the sake of it which was neither sustainable nor credible. Credible economic management is crucial to any government's survival. For the current one, it is going to be absolutely pivotal.

Needing to pace itself carefully in its handling of this developing crisis, National has scheduled a series of staggered announcements from now through to the Budget in May.

The objective in doing so is to retain the political initiative, while also preserving some vital flexibility in terms of policy responses - something essential given the fact that every time Treasury fronts up to ministers, its economic and fiscal forecasts just keep getting more and more dire.

Ministers such as English are also acutely conscious that they are playing the long game - that the public will judge National on the substance of its handling of the developing crisis and how fast its economic reforms turn things around once the worst is over, not some passing news story suggesting the Government has been asleep on the job.

The latter notion is both wrong and ridiculous. At their economic pow-wow on Thursday, senior Cabinet ministers were handed 52 pages worth of proposals from officials worked up over the break. Some of these will be progressed, some need more work and some were simply dismissed out of hand by the meeting.

Likewise, planning for the Prime Minister's Summit on Employment, scheduled for late next month, has been under way since before Christmas as part of National's strategy to maintain momentum once its 100-day "action plan" has been completed.

Where National may have miscalculated is in not projecting an air of being "busy, busy" over the traditional summer break, instead relying on the action plan to give a sense of urgency beforehand.

The action plan, however, contains few measures directly relevant to the Government's handling of the international credit crunch beyond the fiscal stimulus embodied in legislation bringing in National's tax cuts.

National has placed much stock on that fiscal stimulus of some $9 billion - which encompasses last year's big spending Labour Budget - Labour's tax cuts in October and National's further cuts this April plus the Reserve Bank's slashing of interest rates - in being by far and away the primary weapon to combat the downturn.

With the addition of more money for job-saving infrastructure projects and the assistance package to help those made redundant, National clearly thought it had announced enough before Christmas to assuage the "do something" brigade.

Labour's Phil Goff, however, blindsided National 10 days ago by claiming the Government had switched off and was not taking the worsening international economic outlook seriously in contrast to its overseas counterparts which were frenetically working on various policies, programmes and packages to try to preserve jobs.

It was a well-timed attack because John Key's absence in Hawaii symbolised the Government going on holiday.

With Key's diary having him back at work here this week, the Prime Minister's staff should have announced that ministers would be returning to the Beehive for a long-scheduled meeting to get an update on the economy and discuss initiatives that had been worked up by staff and officials over the break.

That would have stymied Goff. Instead, the Prime Minister's office decided to be bloody-minded about Labour's criticism and say nothing about what was happening behind the scenes or the scheduled ministerial meeting.

The mistake in withholding information is hardly going to be costly politically. It instead serves as a timely reminder to National that flexibility is essential rather than sticking to rigid pre-arranged timetables for announcements.

Such flexibility was demonstrated by Key on Wednesday when he brought forward the announcement of his jobs summit, part of his "rolling maul" of initiatives leading up to the Budget.

The late February summit will be preceded by a major speech on the economy by Key which will outline initiatives to buffer small and medium enterprises. Key knows the speech will raise expectations in the same fashion as this week's ministerial meeting on the economy.

The latter "summit" disappointed those expecting some new ideas to emerge from it. That can only happen so many times before the Government finds itself lumbered with the "do nothing" tag.

Labour is certainly doing its utmost to create such a perception. Goff slammed Thursday's ministerial meeting for producing nothing concrete. He attacked Key for shutting Labour out of the jobs summit. Key is wisely restricting participation to those at the "coal-face" of the economy in order to get some focus into the summit's deliberations, rather than end up with some communique filled with consensus flim-flam.

Goff can happily carp away. He has done the responsible thing and offered to take a bipartisan approach to the crisis and work with National. He did so in the full confidence it would be rejected. Which it was.

However, Key perhaps might consider doing some more of the lateral thinking he displayed this week over the flying of a Maori flag from the Auckland Harbour bridge and call Goff's bluff.