Election year battle lines drawn

Last updated 05:00 29/01/2014

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John Key and David Cunliffe have used the return of Parliament to sketch out the battle lines for an election year they say will turn on which of them voters trust most to manage the economic recovery.

With the economy tipped to soar, Prime Minister John Key signalled there would be no loosening of the $1 billion cap on new spending in this year's Budget, despite earlier surprising his opponents by signalling an extension to paid parental leave.

In his opening statement to Parliament he said the election would be decided by voters who trusted National for guiding New Zealand through the Christchurch earthquakes and the global financial crisis while balancing the books.

"In the coming years we need to lock in the hard-won gains that have been made and reject the alternative prescription - high spending, untried economic experiments and a lack of focus on what really matters."

The New Zealand economy continued to stand out among developed countries, growing 3.5 per cent in the 12 months to September 2013. It would grow at a similar rate in 2014, Key said.

Wages were growing faster than inflation, business confidence was at record highs, unemployment was dropping and the terms of trade were also expected to remain high.

But Cunliffe, the Labour leader, said the economic recovery rested on high milk powder prices and insurance cheques for the Christchurch rebuild.

"When the price of milk powder goes up, the economy goes up with it. Which is all very well if you've got a dairy farm, as half the National caucus seem to have, but not much good if you're trying to run a manufacturing business."

The "recovery" was an illusion for most workers, who would not see the same gains received by "the top few" spending up large on luxury cars and million-dollar homes. With National in charge, the chequebook was always open for big business, but not the likes of the Pike River families who had been refused compensation.

Key and his Government were "arrogant, out of touch and out for their mates", Cunliffe said.

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- The Dominion Post

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