The wrecking ball of change

18:56, Dec 18 2013

Underneath all the "Bright Futures" and "Jobs, Growth, Health" election sloganeering there are really only two bedrock campaign themes.

"Don't put it all at risk" and "It's time for a change".

Sometimes one is so overwhelmingly in sync with the voters - as it was for Labour's call for a change in 1999 and National's in 2008 - that it is a no-contest.

But after a couple of terms in office, when the arrogance is starting to show and the flakes are starting to peel off - think Helen Clark versus Don Brash in 2005 - it becomes too close to call.

Then it is a genuine contest between the incumbent and the challenger, more often than not decided by the strengths of the leaders against the backdrop of the economy. As in 2005, so it is shaping up again in 2014 with the Left-Right polling virtually neck and neck.

The only wildcard in the pack of minor parties is the anticipated Kim Dotcom-financed party.


Insiders on both sides of the political divide seem convinced the giant German wrecking ball will go ahead, with John Key as his principal target.

There is little doubt that if it does win seats in the House, its votes will be cast against National. But it is not a question of where its vote goes, but where it comes from.

Both sides are privately convinced it could harm them.

Profile a prospective Dotcom supporter and you get a young, internet-savvy, protest (or possible non-) voter, disgruntled with spying laws in particular. Oh, and faster, cheaper broadband would be nice.

That suggests they are more likely to be drawn from the Greens, Mana and the Left of Labour. The downside for National is if it motivates more of the young, disaffected, non-vote to turn out on polling day.

It is easy to wave away such a party as an also-ran - a more geekish version of the Bill and Ben Party or McGillicuddy Serious.

But an anti-establishment, anti- politician appeal catapulted comedian Beppe Grillo's party to an extraordinary success this year, turning a blog into Italy's third-largest political movement.

Dotcom's play-thing may be a more potent force than Colin Craig's Conservatives.

But speculation aside, the two solid issues remain leadership and the economy.

Labour has shifted its leadership deficit back to neutral by swapping David Shearer for David Cunliffe. No one is expecting him to monster Mr Key during the campaign, but his performance so far - and most recently his sure-footed behaviour during the Nelson Mandela commemorations in South Africa - give the Opposition reason to hope he will not be massacred either.

Which leaves the economy, or more precisely how the two main blocs sell their message about the economy, as the keystone to victory next year.

This week's Treasury economic and fiscal update was a gift for Finance Minister Bill English as he hones his election year messages.

It mapped out a year when the books return to surplus, albeit a tiny $86m one. (At less than $20 per Kiwi, it represents barely a block of cheese each. Where have we heard that before?)

Growth spikes to 3.6 per cent as the economy out-performs the rest of the developed world, jobs data takes a turn for the better and immigrants are drawn in as the exodus to Australia reverses.

The summit of the debt mountain comes into view and rising surpluses through to 2018 leave open the possibility of a little more spending and even some tax cuts.

Even a promise of distant tax cuts, contingent on forecast surpluses being achieved or exceeded, will contrast with Labour's capital gains tax and promised new top personal rate.

But the half-year update also sets out Labour's economic attack lines, based around inequality, loud and clear. (It has promised to stick with a return to surplus so Labour-Green big spending options will remain limited in the short term.)

Real wage growth is tipped to remain subdued, at about 1 per cent a year, house prices are peaking - diluting the wealth effect for home owners sitting on burgeoning capital gains - and interest rates are set to rise. And they will rise much faster than the wages that pay for them.

Affordable housing will continue to be a hot-button issue, especially in Auckland and Christchurch, where Labour's 10,000 houses a year KiwiBuild policy still trumps National's platform.

It can also argue it has in place a far-reaching set of economic changes planned - from monetary policy, to capital gains tax to a single power buyer - that will make the economy stronger but fairer.

Internationally risks may still upset Treasury's rosy forecasts - and National's apple cart.

On balance, though, as we head into election year the economic playing field - and hence the political stage - is tilted National's way.