Where the election will be fought and won

The voting public are at their fickle best in an election year. They love the way National leader John Key flays Labour for having spent up large with their money. But they also see no reason Key can't keep all the expensive baubles Finance Minister Michael Cullen has been splashing out on for the past nine years.

With only eight months, at most, until the general election, Key has shown he can say "yes" to popular and terrifically expensive Labour policies such as interest-free student loans. But increasingly, the question will be how much of Labour's big spending nanny-state National will be able to afford to keep while still delivering the big tax cuts it always says it stands for.

So far, National has avoided saying exactly where it stands on big-spending new Labour policies that affect many hundreds of thousands of voters policies such as KiwiSaver and Working for Families.

Now Labour is looking to leverage up the pressure by expanding its spend-up and forcing National, finally, to use that "no" word voters hate.

Next up is the rail system, which Cullen is negotiating to buy back into government ownership. When asked by the Sunday Star-Times where National stands on the issue, Key repeatedly said he didn't believe the sale would go through. But he says if it does happen, his finance spokesman Bill English has made it clear National would sell off rail again.

If indeed National does sell off rail a second time, Key would have come full circle. The first time National sold New Zealand Rail in 1993, its sales adviser was the local branch of investment bank Bankers Trust. And who should be working for Bankers Trust at the time but one John Key.

KiwiSaver

Labour

Set up KiwiSaver, and then massively expanded it. Half a million Kiwis have now joined the government-subsidised superannuation scheme, which gives them a $1000 kickstart and a tax credit of up to $20 a week. Employers will be compelled to contribute 4% of wages by 2011 and will also get a tax credit of up to $20 per week.

National

No final policy yet. "There will be KiwiSaver, and there will be a government contribution,'' is all finance spokesman Bill English would say last week.

State asset sales

Labour

Has added to the ledger of state assets. Bought 80% share Air New Zealand, bought back rail tracks. Now it is urgently seeking a deal with Toll Holdings to buy back the railways.

National

No final policy yet. Has said it would do partial floats of some assets, but leader John Key says "I don't see a strong case for wholesale asset sales''. Key says National would not sell Kiwibank or TVNZ, but would sell the rail network if it was purchased by the government. He refused to comment on whether National would sell off any or all of the government shares in Air New Zealand.

Twenty hours free childcare policy

Labour

Introduced to huge controversy a year ago, entitling parents of three- and four-year-olds to 20 hours free early childhood care. In reality, the policy has resulted in a subsidy for parents rather than free care.

National

No policy yet on early childhood care and whether it would retain the scheme.

State asset sales

Labour

Has added to the ledger of state assets. Bought 80% share Air New Zealand, bought back rail tracks. Now it is urgently seeking a deal with Toll Holdings to buy back the railways.

National

No final policy yet. Has said it would do partial floats of some assets, but leader John Key says ``I don't see a strong case for wholesale asset sales''. Key says National would not sell Kiwibank or TVNZ, but would sell the rail network if it was purchased by the

government. He refused to comment on whether National would sell off any or all of the government shares in Air New Zealand.

ACC

Labour

Retain ACC.

National

Policy last election was to open up most of ACC's accounts to competition, business worth $2.6b. National won't say whether that is still policy. Nor will it even rule out sale or dismantling of ACC. "We are looking at our options, we certainly believe in choice," said spokeswoman Pansy Wong.

Working for Families

Labour

This $2.6 billion assistance package is now going out to almost 400,000 working families, three-quarters of all those with dependent children. Many effectively pay zero tax, or get a tax credit.

National

Will keep in some form, but no final policy yet on whether scheme will be pruned. Revenue spokesman Dr Lockwood Smith has said it may be "too difficult'' to redesign from opposition. National has expressed concerns about payments going to higher-income families, and that there are high effective marginal tax rates for those on the scheme as their incomes rise.

Student loans

Labour

Interest-free loans was Labour's big election surprise in 2005.

National

Has reluctantly signed up to the policy too, saying 500,000 New Zealanders now have the loans.

Paid parental leave

Labour

Forced to introduce the scheme by coalition partner the Alliance in its first term of government, but since then has expanded the scheme several times. Expected to announce further extensions

National

Has consistently opposed the scheme, but Key says the party will retain it. No policy yet on whether it would support any extensions.

Burgeoning state sector

Labour

Says 50% growth in core state sector since 1999, to 44,335, is justified. No plans to halt growth in numbers.

National

Says it would save $500m over three years by capping core bureaucracy at current levels.

Cheaper doctors' visits and prescriptions

Labour

Has cut fees for visits to the GP. Costs for prescriptions have also dropped from $15 to $3.

National

Says it would keep controls on GPs' fees, and keep cheaper prescriptions.

State housing

Labour

Income-related rents for state housing tenants. State housing stock has been growing slowly. No sales of houses to tenants.

National

Has committed to income-related rents. State house tenants would be allowed to buy their homes, proceeds used to buy more properties. Total state housing stock of 67,000 (including leased properties) would be maintained.

Industrial relations

Labour

No changes to current framework; has raised minimum wage each year.

National

Final policy not yet announced, but says it will "refine'' the Employment Relations Act. Has supported "optional'' three-month probationary period for new workers, review of Holidays Act and option to swap one of four weeks' annual leave for cash. Did not support new rights for employees to request flexible work hours

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