KEY POINTS:
Forget all the usual economic indicators, when Lotto suffers a 4.6 per cent drop in net profit you know the country is, to use a technical term, in deep doo-doo.
More traditional analysts might point to the $700 million shortfall in tax revenue, mostly from reduced GST takings, but the answer is the same. New Zealanders are spending less.
We are tightening our belts as the economy falters. In an election year this could prove the last nail in the coffin of the Labour government. Voters can be churlish and if they are suffering, they will make whoever is in power suffer with them.
A while ago, I wrote that we were entering a "perfect economic storm", with a high dollar, high interest rates, rising inflation, falling property values, a sagging share market and punitive tax rates.
Bill English pointed out last week that households facing crushing mortgage rates, rising rents and spiralling food prices were about to absorb yet another shock from increased petrol and electricity costs because of the effect of the government's loopy emissions trading scheme filtering through the economy.
Talking of food prices, it is hard to avoid the impression that after nine years in power this government has become completely divorced from the reality of life for the rest of us.
Someone should make every MP in the Labour caucus go out and buy a family block of cheese - gold bars are cheaper.
At a crucial economic time over the past few days, when cool heads were called for, the government cynically went off on a purely populist tangent with tougher foreign ownership rules designed to scuttle the sale of Auckland Airport shares to the Canadian Pension Plan.
This not only neatly carved millions off the investments of thousands of New Zealanders (and Auckland ratepayers), it sent a warning message to foreign investors contemplating putting their money into this country to stay away.
Michael Cullen drawled that it was all about "not losing control of our strategic assets" to foreign investment.
This ignored the fact that the Canadians wanted a minority stake in the airport, not control.
They were aiming for 40 per cent of the shares. This stake would carry less than 30 per cent of voting rights, and the Canadians would only get three people on the board of the company at best.
That is not control, especially as large chunks of the remaining shares are in big voting blocs.
Am I the only person who finds it slightly hypocritical that we move to stymie the Canadian Pension Plan buying one of our "strategic assets" when Dr Cullen's New Zealand Superannuation Fund is prowling the planet, merrily buying up other people's strategic assets?
Labour's polling, however, shows that voters fear foreigners controlling such key assets, so the Government decided to play to the crowd in this crass and destructive way.
This set off Winston Peters on another of his rabid raves about governments "selling the family silver" and calling for all foreign investment to be restricted to no more than a quarter of any New Zealand business.
Aside from the fact it is a little odd that New Zealand appears to have a Foreign Minister who hates foreigners, Winston's crazed tirade from his elevated ministerial position should further alienate crucially needed overseas cash at a time when New Zealand needs it most.
Peters argues that Auckland Airport is a monopoly and vile foreigners will exploit this mercilessly in pursuit of filthy profits.
This ignores the past decade when a New Zealand-owned Auckland Airport monopoly mercilessly exploited its users for even filthier profits.
Has he never been through Auckland's domestic terminal? It is the same mean Third World tin shed we have had for the past 30 years or more. Although, too mean to build a modern building, the airport company is giving the domestic terminal one of its periodic, agonisingly slow face-lifts, with new carpet and a lick of paint.
National did itself no favours on the issue, by flip-flopping around like a stranded pilot whale before deciding it, too, would restrict foreign ownership of strategic assets but to a higher level of a 49 per cent shareholding.
The Opposition has to learn to keep its head when the heat goes on because this election year the government will become increasingly desperate and the events of the past week will be nothing compared with the maelstrom between now and the election.
Sensing the end is coming, Helen Clark increasingly reminds me of Al Pacino as a coke-addled Tony Montana in the movie Scarface, enraged and bloodied, firing wildly from the hip, determined to take out everyone in sight in a bullet-riddled last stand.
With just over six months to go, it is going to get ugly.
