Tim Dower: Government books give us a clear picture ahead

There's a pretty clear message from the opening of the Government's books.

The Crown right now isn't doing too badly at all.

Debt looks to be on a downward track and somehow, despite the spending, the Government could be back in surplus by 2025.

You might find it hard to get your head around but Treasury even says the Government’s management of the economy is not contributing to inflation.

Not only that but Treasury says current fiscal policy is such that the Reserve Bank will be under less pressure to hike interest rates going forward.

How so? Well, it's all about tax and the amount the Crown is raking in. Not just in what it takes from our wages, but from GST.

Inflation means higher prices, higher prices means more GST take.

High fuel prices on their own are just fine and dandy if you're skimming that 15 percent off the top.

The irony of the situation is that while the public accounts look OK, household budgets, or the accounts of the public if you like, are buggered really.

Real household wealth is picked to fall this year by around percent.

We're running as fast as we can, but thanks to inflation and house prices falling, we're going backwards.

And that's before the deliberately engineered recession kicks in, probably early next year.

Treasury sees unemployment at 5.5 percent in 2024.

The period of high house prices and low interest rates made us all feel pretty good - confident and willing to spend.

The correction is coming and it'll be a sharp one. Confidence is already a long way down and still falling.

So what's the message? My take is that we ain't seen nothing yet. The worst is yet to come.

Batten down the hatches.

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