Labour calls for trust. National wants change. Now it’s cards-on-the table time – for both major parties – as the heat from the Wall Street burnout registers in Main Street, New Zealand.
Both our major parties are locked on parallel courses at the start of this election campaign. Both offer modest tax cuts. Both are committed to sustaining the current level of Government spending. Both will borrow to fund the tax cuts and sustain the spending.
Neither major party seems to recognize that we are living in extraordinary times that will require extraordinary policies from the next Government of New Zealand.
Only their style and slogans show major differences.
In style, Helen Clark has snarled into a gloves-off attack. She slams National’s economic package as “a dog” and accuses National of “wrecking” Kiwisaver to fund its tax cuts. So far, it has been a series of wild swipes rather than killer blows.
Key stays polite, bobbing and weaving, playing the natural nice guy who also knows how to ride the tidal waves of greed and fear that rip through finance markets. He has yet to show that he has a knock-out blow ready for the right moment.
In slogans, both are trading in devalued political commodities. Labour waves the banner of Trust. National opts for Change.
In times of crisis, we may trust in God–but bankers, brokers and governing politicians get short shrift. In times of change, many bruised voters still remember what that word meant after the elections of 1984, 1990 and 1999.
Voters have trusted Labour for the last nine years, nine prosperous years of sustained economic growth and loudly proclaimed Government surpluses.
Labour has shown itself competent in good times–but that does not mean it is well-qualified to govern effectively in tough times. Over the last year, the Clark-Cullen led coalition has shown an alarming tendency to swerve and slide, reversing previously fixed policy positions in an obvious effort to reverse poor poll ratings.
The tax cuts it previously decried and denied suddenly became prudent in election year. Getting tough with gangs suddenly stopped being ineffective and started sounding sensible.
Worst of all, four weeks out from the election, voters suddenly discovered the once-crammed Treasury tucker-box is now bare, the recession is here, and nine years of ballooning Government deficits lie ahead.
If that is what happens when voters trust Labour through nine good years, what grounds are there for trusting them to sort out their baggage in the nine tough years to come?
At this point, Labour looks unwilling or unable to move boldly and National is clinging to a pre-crisis platform of very moderate change as the biggest global credit crunch since the Great Depression rolls our way. Both adopt “no panic” positions as electoral anxiety grows.
Change is coming, ready or not. Forget about the claims of the protection provided by our less complex and better-monitored, better-regulated banking sector. If the clenched right hand of tighter credit does not hit us when our banks roll over their offshore loans, then the heavy left-hand of reduced consumer demand and business activity in our export markets certainly will.
Over the last weekend of campaign openings, the most significant champions of change have emerged outside the political arena.
In “Economy on the Edge” David Skilling of the New Zealand Institute and Mark Weldon of NZX, the New Zealand Stock Exchange, see
Skilling and Weldon provide a partial prescription for a quick exit rather than a clean entry–a combination of short and long term measures that run from a two-year deferral of provisional tax payments, through 100% depreciation on capital investments, Government bond issues to fund productive infrastructure, New Zealand investment requirements on State financial institutions [such as the NZ Superannuation Fund and ACC], a compulsory savings scheme, and a capital gains tax on property beyond the first home.
They can be faulted for the partiality of their prescription and the practicality of some of their suggestions–particularly the introduction of a capital gains tax when property values are diving and property is often used as security in funding small and medium sized business development.
But they have to be applauded for challenging politicians to innovate in these extraordinary times.