KEY POINTS:
Treasury figures to be released today, showing the Government's cash position, will put the economy centre stage in the election campaign, Prime Minister Helen Clark says.
Finance Minister Michael Cullen has previously warned the pre-election update will paint a bleak picture and show a significantly worse position than was forecast in his May budget.
The budget predicted ongoing cash deficits of more than $3 billion and this is expected to have worsened.
"I think everyone expects there to be some deterioration given what's happening in the world economy, we're not immune to that," Helen Clark said on TV One's Breakfast programme.
"That brings the economy very much centre stage, because the issue is who has got the experience and judgment to lead this."
She said National was deliberately promising more than Labour and would borrow to pay for it.
"That's crazy in this environment," she said.
"We've got the worst international financial crisis probably ever, the worst turbulence in the markets ever, and the National Party says 'let's go and gamble some money'. That's silly."
Helen Clark said Dr Cullen had been very careful with money, and because of that New Zealand was in much better shape than many other countries to deal with the international crisis.
"If we'd been blowing the bank as National advocates, chucking tons of money away in tax cuts year after year, we'd be in an extremely difficult position now."
Speaking on Radio New Zealand, she said the situation had meant Labour was "having to phase and scale things" as it prepared to announce new policies.
National Bank chief economist Cameron Bagrie said the Treasury would release a range of figures but the important one was the Government's cash flow.
"There are going to be pretty substantial deficits, I suspect something in the order of $5 billion for the next two to three years," he said.
"That means more government borrowing, but we don't need to be alarmist about that because its debt position is very favourable compared with many other countries."
Economics professor Roger Bowden agreed the Government's debt position was "very conservative" but he did not think it had prepared for the crisis in the best way.
"Far from being fiscally responsible, the present government has been spending up too big too soon," he said.
"The problem is ... we're going to start needing an expanded fiscal policy and the room to move has become very restricted."
- NZPA
