So jubiliant over a $4 billion writedown

It was fascinating to observe Dr Cullen on the news last night. He seemed jubilant and happy. Could almost not restrain his glee.

And what was he celebrating? A drop in the Government’s surplus of $4.2 billion from a $3.8 billion surplus to a $0.4 billion deficit. The $4.2 billion drop being made up of decline in the value of financial assets by $2.5 billion, an addition $1 billion liability for ACC claimants and a $700 million drop in tax revenue.

Now while this isn’t end of the world stuff (as the underlying OBEGAL surplus is only down by $600 million) it isn’t what you would expect a Finance Minister to celebrate.  So why was he?  Because Dr Cullen thinks economic bad news is political good news, as a smaller surplus makes it harder for National to promise larger tax cuts.

When you combine his glee over a $4.2 billion surplus with the economic vandalism caused by a xenophobic last minute change to the overseas investment rules, one has to wonder has the 20% deficit in the polls pushed Dr Cullen into a scorched earth policy? Where any amount of damage and destruction to the economy is justified, if it might help close the poll gap?

It’s too early to tell, but when a Finance Minister gleefully celebrates the government’s net worth dropping by $4.2 billion,  it’s a fair question to ask.