Strategies And Cunning And The General Election 05

Scoop broke major news surrounding the Ahmed Zaoui case, exposed shadowy goings on surrounding claims the SIS was spying on Maori, and considered what impact Don Brash would make as a PM - now we begin the 2005 political year with a guide to the 2005 General Election, why Labour will not cut taxes, and what are the differences between the two major parties hogging the centre-right of New Zealand politics.

Chapter One: Labour

Labour is resistant to be drawn into a tax-cut debate with National and ACT. Clearly the centre-right's strategy is to damage Labour by endearing lower tax talk among electors, making it a point worth considering when voters finally go to the polls later this year. National is keen to debate tax cuts with middle New Zealand encouraging the power-deciders to consider self-interest and to expect a cash wind-fall from a hard earned surplus.

Labour's agenda will not pander to this tactic. Why?

Prediction: Don't expect tax cuts from Cullen this side of the 2005 election, and tax cuts are unlikely in the third term. The social democratic instincts of Prime Minister Helen Clark and Finance Minister Michael Cullen will steer them towards maintaining the current tax rate formulas with a view to redistributing wealth through initiatives such as the Working Families package.

Nor will the company tax rate be altered any time soon. Company tax is a withholding tax. It would be an oxymoron for Labour to morph its third way social agenda with old centre-right ideology, to lower a withholding tax on companies is the least likely to be changed by Labour fiscally led by Cullen and re-elected for a third term.

Why?

The surplus is largely committed to directly fund the New Zealand Superannuation Fund - which will continue to require funding from the surplus for several decades.

Cullen has been able to maintain surpluses at a level required to balance contributions to the Superannuation Fund as well as keeping gross debt from rising. If these achievements are to continue, it requires a strong surplus in out-years. It's a dull and steady formula, but prudent if current tax-payers are to see benefits from their working years once they retire.

The surplus is also required to fund major capital expenditure projects that continue to feature in Labour's grand-plan (but did not previously occur under the National-led Bolger/Shipley/Peters coalition).

Capital expenditure projects include:

Four regional corrections facilities either planned for or currently being constructed (cost - approximately $750m

New state secondary schools within population expanding regions (mostly Auckland regional) DHB hospitals

Major state highway projects and roading networks.

There is also fiscal recommitment required to service its:

Law and order policies

Skill-base training, social agency professional training

State owned housing

State owned enterprise capital investment

Commitment to foreign policy regional plan (NZ Aid, Pacific Plan, expansion of NZ Trade and Enterprise network, development and implementation of MFAT posts in EU and Latin America sectors…)

To achieve these two sets of goals Labour needs to maintain a strong source of Crown revenue and a strong budget surplus.

The third spending initiative that will continue to impact in this year's budget (Budget 2005) is the roll-out of the Working Families package.

The package is a third-way government approach designed to appeal across a centre-left-centre-and centre-right spectrum. Sounds an impossible task but Labour has positioned to give it a go - however the strategy does not come cheap.

Labour's rhetoric to business goes like this: the Working Families Package will be good for business as it will provide FTE and PTE labour that it requires for expansion and growth. It also will provide the retail business sector with a cash injection. It resembles former British Prime Minister Baroness Margaret Thatcher's trickle-down theory in reverse:

Helen Clark said in May 04: the Working Families package does the domestic economy "no harm for low and middle income families with children to have more spending power. The increases in their income are being phased in, with an eye both to what is affordable and to not putting undue pressure on monetary policy. In the second place, there’s also a very clear message to New Zealand families – they are better off at work !" Helen Clark said.

The signals have been clear: Labour has been investing throughout the government sector and intensifying central government relevance within the lives of New Zealanders. It has pursued a socially active, fiscally centre-right, community relevant legislative and regulatory agenda with a zest not witnessed under National in the 1990s. On foreign policy it has swayed centre-left cautious on the republicanisation of U.S. preventative-defence, while later pleasing the superpower and its allies with clean-up and logistics support in Afghanistan, Iraq, and security patrols in the Persian Gulf, Arabian Sea and Gulf of Oman. It has lurched to the far right on immigration policy and domestic intelligence and security as has been manifestly obvious for observers of the Ahmed Zaoui case and other such cases that have not yet come to public attention.

Today's Labour Party is into influencing the population, controlling the state within the nation. All this resembles control-led governments from 1975-1984 and under National's Sir Robert Muldoon. That said, today's Labour government pursues policies far more economically right than Muldoon established.

Today's Labour Party would shudder at how totalitarian-left on the political science axis New Zealand was under Muldoon. To Labour the thought of fixing the NZ Dollar is abhorrent, borrowing to subsidise agriculture lacks common fiscal sense, increasing tariffs would be against world trends, fixing a price and wage freeze in an attempt to control inflation is head in the sand stuff, paying farmers for the number of lambs born (while farmers began burning new-borns once they had collected the good government's cash) would be a rort, allowing Kiwis only a set amount of currency ($1500) to be taken offshore when holidaying in Sydney Fiji and other popular destinations would be Albanianist, prohibiting finance companies to issue loans on private cars beyond 18 months (while witnessing the rise of commercial styled utility vehicles as a loophole and the 1980s "working" family's choice) was clearly stupid.

The similarities are in control, not economics. It is a style of government that is determined to institute social policy designed to engineer an outcome within the population and industry. Be it Civil Unions laws, SmokeFree laws, population based funding formula in health, education, law and order - the control and delivery is determined by centrally controlled departments responsible directly to Labour's team of Cabinet Ministers.

This style of government is fundamentally alien to what was advanced in the Bolger/Shipley years when, as former Labour Prime Minister David Lange observed, the 1990s was witness to a decade where the government was loathed to govern. In the 1990s, decentralised social portfolio provision was the blueprint for health, housing, education, policing… where regional funding authorities and bulk-funded programmes left the government less responsible for delivering to the social sector.

National is keen to present to its true electorate the defining points of difference between what its leader Don Brash would bring to Treasury benches and what Labour's Clark and Cullen government is manufacturing.

As the New Zealand Herald's star political commentator John Armstrong suggested Don Brash's anticipated Orewa speech will allege a: "New Zealand in decline: In true 'state of the nation' mode, Dr Brash will almost certainly lament falling household incomes relative to Australia; bemoan slipping standards, educational and otherwise; and complain about decaying moral values exacerbated by Labour's so-called 'social engineering' agenda, as evidenced by the introduction of civil unions…

But Brash's strength and weakness lies in his core ideology - that lower taxes will result in a progressive business led economy. His strength lies in a banker's eye for reference, but is unconvincing when challenged to explain why his theories did not work in the 1990s.

To reiterate: the key to National's strategy is to lure Labour into tax-cut debates, to draw it into a true centre-right economic dialogue (which is justified considering Labour has been squatting well within traditional National Party turf for much of its second term) and to divide the centre-right electorate in an attempt to secure votes National once held but lost to Labour and New Zealand First.

But perhaps Brash's most effective weapon to siphon votes off Labour is promoting (again as John Armstrong suggested) a: "getting government out of people's lives" agenda.

Key seats To Watch:

The electorates to watch out for in 2005 (excluding the Maori seats) are: Northcote (Hartley, Lab), Hamilton East (Yates, Lab), Whanganui (Pettis, Lab), East Coast (no sitting MP, list MP Moana Mackey, Lab, will contest the seat that her mother Janet Mackey will relinquish due to retirement), Wairarapa (no sitting MP), Wellington Central (Hobbs, Lab), Kaikoura (no sitting MP), Otago (Parker, Lab) and Invercargill (no sitting MP).

Northcote has a very strong local organisation and Ann Hartley is a determined and respected local member. National have struggled to field quality candidates ever since Jim McClay retired in 1987. Hartley's majority is 2,624 - which is a marked improvement on her tiny majority achieved in 1999. I anticipate that she will hold with a reduced majority.

Hamilton East is always a marginal seat, with Dianne Yates holding a slender 614 vote majority. She was previously disadvantaged by a strong National Party opponent (Tony Steel). If National selects a very strong candidate and is polling without 6-8 per cent of Labour on polling day then a strong National candidate has a real chance.

Whanganui is a mix of solid Labour (Wanganui City) and solid National rural south-Taranaki. Pettis' 2,070 vote majority in 2002 was somewhat disappointing as it represented a swing against her compared to her previous result in 1999. She is also disadvantaged by the election of Michael Laws as the major of Wanganui and local issues such as the school review in rural areas within the electorate. However her main opponent is Chester Burrows (National), who is a comparative lightweight back for a third attempt. Wanganui has enjoyed comparatively good economic times and a significant reduction in crime under Labour, but this one is going to be close. Toss up.

East Coast is a hard seat to serve. It stretched from the outskirts of Napier up beyond Gisborne, includes Whakatane and the entire east coast peninsula. Janet Mackey is strangely popular in this seat and has done well to hold it since she was first elected as the MP for Gisborne in 1993. Her 5,343 majority will this time be defended by her daughter Moana Mackey, the young Labour list MP who came into Parliament following the retirement of Graham Kelly. National have struggled to select strong candidates in this region for many years (past MPs for regions covered by this electorate include Wayne Kimber and Roger McClay). This electorate, which is the second largest in the country, should be held by the younger Mackey.

Wairarapa is Labour's on paper (6,372 vote majority for Georgina Beyer) but a difficult seat to hold. The selection of Featherston teacher Denise McKenzie ahead of Masterton mayor Bob Francis as the Labour Party candidate has made National's task far easier (The local LEC members wanted George Hawkins' Beehive staffer Ian Dunwoodie as the candidate, McKenzie was the compromise as Francis had Labour head office support.). Look for the National candidate to give National its first seat in the Wellington region since 1999.

Wellington Central - is Labour's on paper with Marian Hobbs enjoying a 4,181 vote majority. However Mark Blumsky will contest the seat for National and the Green Party's Sue Kedgley could be a spoiler. If Labour commits in Budget 2005 to strengthening the public service it may play well in this wealthy electorate, which is home to thousands of public servants. But a poorly organised campaign by Hobbs (former Auckland University Princess St Labourite Jordan Carter is her campaign manager) and a tight contest between Labour and National will give Blumsky a seat in Parliament. Hobbs will win with a reduced majority if she can appeal to middle-income mortgage payers in suburbs like Karori and Wadestown.

Kaikoura should be a safe National seat, however popular incumbent Lynda Scott is retiring. The Beehive's Brendon Burns (the "Duke of Marlborough") will once again contest the seat for Labour and National has interestingly (some say foolishly) selected a farmer from north Canterbury to contest this seat (even though the majority of the population live in towns like Blenheim). Scott's 3,069 majority in 2002 should be treated as a strong endorsement of her personally. Keep a close eye on this one as a possible surprise in 2005 - polling suggests it may tip Labour's way.

Otago stunned National in 2002 when Labour's David Parker won it by 684 votes (a result that left Michelle Boag visibly shaken on election night). All things considered, Parker should be dead in the water this year. Otago is a marginal knife-edge: the formula is Labour wins the coast (Oamaru) and National wins the rural interior. If Parker can win the coast and hold his own in places like Queenstown and Wanaka then he has a real chance of defying the odds in Otago, but only by a small margin. If National campaigns here with half the zest expected, it will likely win.

Invercargill was been a nightmare for Labour during much of 2002 through to the end of last year. Incumbent Mark Peck's previous majority of over 7,000 was slashed to 2,792 votes in 2002. He seemed to 'give up' when he was once again overlooked for a Cabinet role following the 2002 General Election. Peck was never in favour with the Prime Minister and the Labour Caucus was cautious due to the political-private rumour-mill having been in historical over-drive.

Mallard's school review/closure botch-up compounded Peck's and Labour's problem in Invercargill. Peck's defence of the highly unpopular closure-process meant he was given little chance to win re-election. He announced his plan to retire and Labour selected Wayne Harpur, a local activist with credible links to the business and the trade union movement. Harpur defeated Lesley Soper from the NZEI for the nod to replace Peck. This seat is National's on a plate. If it campaigns well it is a loss to Labour - thanks to Mallard.

The Maori Party
- It's too early to predict the outcome of this party. The Maori vote is soft and the Maori Party lacks centralised leadership and a clear and unified policy/strategy. Tangata whenua will hardly turn out en masse for Labour without some serious courting, however beyond Turia's Te Tai Hauauru fortress, and possibly Pita Sharples knocking John Tamahere off his perch, the impact might be less dramatic than initially predicted. That said Dover Samuels looks like he could be ousted by Hone Harawira.

Coalition Likelihoods: It would appear from recent polls (see below) that National, ACT, United Future New Zealand, and New Zealand First will not have the numbers to form a governing coalition.

Considering the likely outcome (barring a major economic collapse or political scandal of seismic proportions) Labour will lead into a third term.

Prime Minister Helen Clark hinted in December 2004 that she would prefer to lead a coalition beyond this year's election with a larger party as a partner. This has been interpreted to mean one of two things: a Labour-Green coalition or a Labour -New Zealand First coalition.

Many have distilled Green co-leader Jeanette Fitzsimons' Planet Picnic speech as signalling to Labour that it is prepared to talk coalition. The Greens' position on GM has been loosened to a degree, enough to allow coalition talks to progress should Labour not get the numbers to rule alone.

- It is well known among left-commentators that Fitzsimons' fellow co-leader Rod Donald is keen to be in government. Many see Donald as having the political skills and persona that would make good Cabinet minister bones.

But Helen Clark has a long memory and the ghosts of the 2002 General Election and 'Corngate" linger on. One may remember Helen Clark's comments in 2002 that the Greens had some nice people but not politically mature enough to consider within a coalition. Have the Greens since matured in the PM's eyes?

If one was to be totally political, Labour would seem to have discovered how to gel New Zealand First's leader Winston Peters to commitment. If the foreshore and sea bed fiasco was anything to go by, Peters and Labour are a going concern.

- Labour has also relied on Peters throughout 2004 to advance rhetorical immigration patsy questions in the House. Clearly a strategy was relied on between Labour and New Zealand First to crush probing questions on the Ahmed Zaoui case from concerned centre-left and left quarters of Parliament.

Peters has said he would prefer to be outside a coalition influencing policy and legislation by manipulating the vote on centrist bills.

Would Labour be provided with a more stable minority-led government by having Peters outside a coalition but within a co-operative pact? Or would it be able to harness him to ensure stability and a full three year term is achieved?

If the 1996-99 Bolger/Shipley/Peters coalition was anything to go on, Labour would be wise to 'not go there with a barge pole'.

Recent Polls: Sunday Star-Times/BRC Poll December 20.04: Labour 45
National 35
NZ First 7
Greens 4
ACT 3
United Future 3
Maori 2
Destiny 1

One News Colmar Brunton Poll November 14 2004: Labour 44
National 38
NZ First 5
Greens 4
United Future 3
ACT 3
Maori 1

NBR-Phillips Fox Poll November 12 2004: Labour 44
National 33
NZ First 8
Greens 6
United Future 2.8
ACT 2.3
Maori 1.7

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