KEY POINTS:
The Treasury's instructions to media and financial analysts attending today's release of the pre-election fiscal update helpfully included mention that water was available from the water coolers.
The instructions did not say whether the water was just for drinking or whether it had been provided as a precaution should the document spontaneously burst into flames, given the figures inside burn so red.
Those figures were as bad as anyone expected. And they could yet get worse.
It's goodbye surpluses for close to the next decade. The cash deficit will hit close to $6 billion in the current financial year. Government debt as a percentage of GDP rises from 17 per cent to 24 per cent over the next four years.
Those forecasts are based on economic data as at the end of August and do not take into account the cataclysmic events in the United States last week. The Treasury thinks they should not fundamentally alter its forecasts. However, you would have to be the ultimate optimist to believe that.
Finance Minister Michael Cullen's advice? Don't panic.
His message is that thanks to his fiscal prudence, New Zealand is better placed to weather the crisis than a lot of other countries.
Having been pilloried for running huge surpluses in past years, he no doubt feels vindicated that the money went into strengthening the Government's books for the inevitable rainy day which has now arrived.
However, the fiscal numbers are so bad they call into question not just National's tax cuts, but Labour's package as well. That has been legislated into law and therefore will not be withdrawn. However, Cullen admitted that had he known earlier in the year how bad things would get, he would have taken a "more cautious" approach to cutting tax.
How he must wish he had. He pushed things to the edge in May's Budget in terms of tax cuts and more Government spending. Now, in hindsight, he risks being accused of being just as reckless as he has accused National of being.
For that reason, he was today avoiding getting stuck into National too heavily, instead letting the figures speak for themselves and waiting for what Wednesday brings when National finally releases the detail of its tax cuts and how it is going to pay for them.
