KEY POINTS:
The last waltz on the Titanic? Michael Cullen's ninth, probably final and most political Budget yet will not on its own save Labour's neck.
But then it was not expected to do so. Labour has simply arrived at the tax cut party too late - and probably with too little. But the Budget will have done its job if it keeps Labour in contention until the start of the election campaign, when the real business begins.
Cullen has given it his very best shot. The Minister of Finance has swallowed hard and put his reluctance to run large-ish cash deficits to one side to accommodate tax cuts. He is gambling on the Treasury's surprisingly rosy economic forecasts being correct. He is punting on the economy not going into recession, which would squeeze tax revenue and see those deficits balloon.
By his own admission, Cullen has reached the limits of his "comfort zone". He has risked sacrificing his longstanding reputation for fiscal rectitude in order to get a short-term political payoff. The net result is someone on the average wage of $45,000 gets an extra $16 a week from October. Hardly a sum to provoke mass rejoicing in the streets.
The money will start to flow into wage and salary earners' pockets two weeks before the likely day of the election.
But it does not look like being enough. The Cabinet realised that and contemplated an even more substantial tax cut package. But that fell over because it was too risky were the economy to suffer a marked downturn.
Cullen's bigger fear, though, would have been retaliation from the Reserve Bank delaying a cut in interest rates because larger tax cuts would have unduly stoked inflation.
Cullen has cunningly found a partial way around these constraints by bringing forward the indexation of Working for Families payments.
This is comparatively cheaper than broad tax cuts. This fits in with Labour's strategy to boost incomes of its core voter segments.
Thus superannuitants have benefited from the rise in the average wage flowing from tax cuts. Student allowances have increased.
Beneficiaries may largely miss out, but then they don't vote National.
But family households with incomes between $40,000 and $70,000 do vote National. It is this group which Labour has identified as crucial to its clinging on to power.
A couple with two children under 13 living on a single income between $45,000 and $70,000 will get between $31 and $43 extra from October through Working for Families.
A $43 tax cut sounds more meaty than a $16 one - even if the money has to stretch further. And that $43 rises to $85 within three years.
But Cullen is not just pushing the limits to give more tax relief than had been expected.
He is also doing it to try to limit National's options.
He is spending an additional $4.5 billion this year on core Government services - an increase close to 8 per cent. Cullen says this is affordable because he is still keeping the debt-to-gross domestic product ratio below Labour's target of 20 per cent.
But he also made reference to Sir Robert Muldoon's warning to Labour about "the cupboard being bare". So bare, Cullen implies, that National will not be able to promise bigger tax cuts without cutting social services or increasing debt.
National will argue otherwise. It will finance more capital spending through debt. It is not committed to Labour's spending programme even though Cullen has lavished money on items that National would find difficult to axe.
So bigger tax cuts from National. But how much bigger? The Budget will force working families to weigh up whether they are better off sticking with what they have got or risk a punt on what National is promising.
If the Budget does not give those families leaning National's way pause for thought, then nothing else will. Labour has a nervous wait for the next opinion polls.
