In 1999, parts of the economy were doing well, with inflation at 1.2%. Reserve Bank governor Don Brash, who later led the National Party, predicted it would fall to zero.
Then Treasurer Bill English was being criticised widely for planning ‘‘modest'' tax cuts, with the top tax rate expected to fall from 33% to 30%.
Labour's finance spokesman, Michael Cullen, now the Finance Minister, was critical of Mr English's financial management. The roles are now reversed.
The trade deficit was soaring, superannuation was a major election issue and a drought scheme was introduced to help struggling farmers and hurting rural communities.
Fisher and Paykel temporary workers lost their jobs and Mosgiel yarn workers were worried about their jobs, which eventually disappeared.
Nine years later, Dr Cullen is struggling to balance a faltering economy, with an expectation from voters that the Government - which for years has been rolling in cash surpluses - will step in to help ease the financial pain of dayto-day living.
Forget about Working for Families tax credits - people facing double digit increases in the price of food staples, fuel and floating mortgage interest rates of nearly 11% want some help now.
Dr Cullen has been forced to incorporate some tax relief in next month's budget. But instead of changes beginning in October, it is more likely benefits will not be felt until April 1.
And then those on low and modest incomes are likely to get the most help because they spend the highest part of their incomes feeding their families. But Dr Cullen will be unwise to rule out middle income resent ment.
Dr Cullen is saying it is just as well he had not cut taxes earlier because the economy could not afford them. But he is going to have to cut rates, as well as making election spend ing promises, when times are getting harder.
Indications are that, while the promises will just be affordable in the budget, by election time, he may be forced to borrow to pay the bills.
Latest trade data, out yesterday, showed an export slump, just like corresponding figures in 1999.
While the Government cannot be completely blamed for trade figures, it is another bad mark against its economic management.
Calls that the dollar is too high at US78c for exporters to compete will continue, but if it reverts to US55c, as in 1999, rising food and fuel costs will become a tsunami of increases.
When scaling dizzying heights, as the New Zealand economy has done in the past eight years, the challenge is always descending safely.
Voters are looking for someone to blame for their hurt and the Government is the easy target. For too long, Dr Cullen has prevaricated on tax cuts. When he finally realised, or was prodded into accepting they were needed, he could not afford them.
