Key Points:

Crisis? What crisis? If you want to become even more depressed about all the economic doom and gloom, then read a copy of the briefing paper which emerged from the Treasury late last week.

The contents of the document - the second of two such papers written back in November for Bill English as the incoming Finance Minister - pose questions about Treasury using the cover of economic recession to promote an old agenda of tax cuts for the wealthy while putting the squeeze on Government spending.

What you make of that depends largely on your politics. What is truly worrying is what is missing from the document.

There is no sense of the Government's principal economic adviser having grasped the enormity of the global meltdown. There is no sense of Treasury accordingly showing the kind of innovative leadership necessary in trying to ameliorate the impact of what is coming.

That is not surprising. Treasury was still talking back then about there being a slowdown in the economy - "not an economic crisis".

The department expected unemployment to peak below 6 per cent - a figure which, according to the briefing paper, was once regarded as a low and is therefore presumably an acceptable jobless rate in Treasury's eyes. That figure has been revised upwards twice since then without even as much as a brief blush on Treasury's part.

Sure, criticising Treasury is a bit like pulling the wings off a butterfly - easy. Moreover, should one expect some blinding insights from a document which was essentially advising English of what Treasury thought about National's policies? To its immense credit, the department was brutally frank in saying it did not like some of them - the independent earner tax rebate, for example.

It is also easy to be wise in hindsight. Not in this case, however. Even in November, the prognosis for the global economy was bleak. It was pretty obvious what the new Government's top priority was going to be - economic survival. The briefing paper instead shows Treasury so consumed with rearranging the deckchairs, it misjudged the size of the iceberg. With its push for "fiscal consolidation" - stopping the Government accounts going even more into the red - Treasury seemed more interested in getting English to sign up to a pre-determined programme of spending cuts totalling $2.5 billion.

How much note English has taken of Treasury's identification of what it calls "lower value components" in existing spending programmes will not be known until the Budget.

What the Finance Minister did ignore was Treasury's advice that the next round of tax cuts on April 1 be cancelled or deferred on the grounds there will already have been enough "fiscal stimulus" by then to revive the economy. That is a matter of huge debate. But it is a no-brainer politically. It would not only have left National breaking an election promise. It would have provoked charges that National was doing nothing to stimulate the economy, relying instead on Labour's tax cuts of last October, Michael Cullen's spend-up in last year's Budget and the Reserve Bank's loosening of monetary policy.

It must be assumed that those at No 1 The Terrace, Wellington have now got a grip on things in the real world and the advice to English goes beyond trotting out the same old policy prescriptions.

If not, we really are in trouble.