No surplus

Its official: the government will not achieve its entirely political target of surplus by 2014/15 - and John Key has admitted as much:

Reserve Bank Governor Alan Bollard has dealt a blow to the Government's hopes of returning to surplus by 2014/15, with a new forecast tipping the books will not be back in the black until two years later.

Prime Minister John Key yesterday conceded the bank was using "slightly more up-to-date data" than the Treasury used in the May 24 Budget.

These were "volatile and uncertain" times but the Government believed it was on the right track.

"It is an extremely difficult time to be forecasting," he said.

So what will National do now? Will it tighten the austerity screw harder in an attempt to meet its self-imposed target (and thus crash the economy even harder), or will it accept the reality that its just not going to happen? Either way, it doesn't look like they have any good ideas to get us out of this hole. According to Key "[t]here is nothing different we would want to do at this time".

Time for some better economic thinking. Time for a new government.