Clark and Key draw battle lines

Battle lines were drawn on the opening day of Parliament as Helen Clark and John Key squared off for a likely November election.

It might have been short on pomp and ceremony yesterday, but the day was not short of promises as the Labour and National leaders targeted families feeling the pinch from rising house prices and interest rates.

Miss Clark pointed to a 25 per cent growth in incomes over the past eight years - but acknowledged the need for tax cuts and home-ownership assistance.

She also drew attention to the Government's economic record - delivering the message that now was not the time to change course while the world economic situation remained uncertain.

Mr Key targeted the "thousands of New Zealanders who cannot meet their mortgage payments" and said National would help them by cutting taxes and implementing policies to lift wages.

In a sign of things to come, both parties traded insults: Mr Key labelling Miss Clark's speech vacuous and out of touch; Labour's Phil Goff accusing Mr Key of speculating against the New Zealand currency in his past life as a currency trader. But the most stinging attack came from NZ First leader Winston Peters, who used life-sized photographs of Mr Key and activist Tame Iti greeting each other with a hongi to deride the National leader's "political correctness".

The final date for an election is November 15, which looks likely if Labour uses its May Budget to cut taxes in October. But the timing of those tax cuts will depend on whether interest rates remain under pressure, and a decision to hold off might see Labour decide to call an earlier election date.

Miss Clark said she would go to the polls on Labour's record. Mr Key labelled Labour's record one of lost opportunities.

He predicted interest rates would be a critical new front in the fight against Labour, highlighting mounting pressure on family budgets under rising rates.

The biggest policy announcement in Miss Clark's 45-minute opening salvo was a boost of half-a-billion dollars to voluntary groups running essential community programmes, important for reassuring Labour's grassroots supporters that its promised tax cuts will not result in cuts to their own funding. She also pledged action to lift home ownership.

Mr Key's response was to label Labour tired and bereft of ideas and warn that voters had stopped listening. He also attacked Miss Clark's inability to live up to her promise to lift New Zealand into the top half of the OECD.

"After nine years of a Labour government [voters] have more debt and more of their friends living in Australia ... They are sick and tired of Labour. They are sick of Labour telling them this is as good as it gets."

- © Fairfax NZ News