KEY POINTS:
The historic nature of Finance Minister Michael Cullen's ninth budget on Thursday will be overshadowed by the current political and economic gloom.
Not since Walter Nash looked after the Government's books through the Great Depression and Second World War or Rob Muldoon's domination in the 1960's and 1970's has any finance minister overseen the writing of so many budgets.
But the history will mean little to the voting public who seem to be turning their back on the Government in droves as they tighten their belts.
Dr Cullen has promised a "response", but "no silver bullet" to the economic situation with a mix of mild tax relief with investment and social spending as a tonic for the economic chills.
Most focus will be on tax cuts as more and more people demand some relief from increasing costs.
According to recent data most people are better off than they were a few years ago, but the reality is almost everyone feels poorer and it appears they are holding the Government responsible for it.
Last year, Dr Cullen cancelled plans to lift the tax thresholds to compensate for inflation saying they were unaffordable.
This year he will have to reverse that stance and cut tax cuts by much more.
So far Dr Cullen has said what he will not do - introduce an income tax free band at the lower end of income earned or cut GST.
The easiest way to give tax cuts for everyone is to increase the thresholds at which higher tax rates cut in.
Another way to meet Dr Cullen's test of fairness is just to pay out a tax credit - a lump sum of a $1000 would look much more exciting than a cut of $20 a week over the year.
Critics have argued this would be inflationary, but if it is true that most people are screaming from financial pain then they would just repay debt.
The other straight forward options are to raise the thresholds or cut the rates.
But even quite small changes at the bottom cost a lot of money and deliver very little in the hand per week.
Dr Cullen has been warning people not to get their hopes up, but his problem is that it seems expectations of tax relief exceed his ability to deliver them.
Instead Dr Cullen will be hoping that he will be seen as prudent and investing for the future.
There will be large amounts of money for infrastructure and in particular broadband internet and transport.
Dr Cullen has given only a few clues to his thinking ahead of the budget and has refused pre-budget interviews.
He has also apparently cancelled the usual pre-budget photo opportunity of watching the document rolling off the printing press.
Dr Cullen has always played down his budgets as circuit breakers, instead they are part of an overall programme.
This time he will be trying to soothe the pain caused by price hikes in basic items.
National's finance spokesman Bill English said Dr Cullen's description of the budget as a response to the current economic chill is more posturing than reality.
"He will do what he always planned to do, but will put in the context of the downturn," Mr English said
"It will be an attempt at saying he understands the feeling of pain."
Mr English believed that Dr Cullen would deliver a "reasonably measured and sensible budget... leaving the lollies to later in the election campaign."
Dr Cullen's prudent hands are largely tied.
Revenue is declining, surpluses are shrinking and there are already scheduled increases for health, education and social services spending.
There is little left to try and buy a rise in popularity.
The big question lies around about how much he is willing to eat into debt levels, now and into the election campaign.
There is a lot of room to borrow and still maintain debt at historically low levels.
It may not happen in the budget, but political desperation could see Dr Cullen's hands loosened and a lolly-scramble ensue in the election campaign ahead.
Pre-budget announcements
*$621 million over five years to extend New Zealand's diplomatic presence overseas.
*$4 million for superbug surveillance.
*$2.4 million to improve monitoring and testing of imported food.
*$18.5 million to rebuild Porirua college.
*$46 million over four years to increase payments from ACC to people providing support for injured family members or friends.
*$700 million contribution to set up a joint agricultural research fund with the private sector.
*Extensions to the SuperGold discount card for senior citizens (not costed).
*$53.4 million over five years to insulate state housing.
*$33.5 million in transport infrastructure funding over four years for the Canterbury region.
*$164.2 million over five years for an immunisation programme to fight cervical cancer.
*$9 million over three years to boost prize money in racing industry.
*$35 million on a two-year shared equity pilot to assist up to 700 households into starter homes.
*$690 million to purchase the rail and ferry assets of Toll.
*$216 million to replace Mt Eden Prison.
-NZPA
