5 Apr 2014

POWER PLAY, with Brent Edwards

7:46 am on 5 April 2014

The weekly column from Radio New Zealand's gallery staff, analysing the stories, themes and issues focusing the minds of the nation's political leaders.

If politics is the art of the possible then the Labour Party, despite its recent woeful showing in opinion polls, still has a chance of leading the next government.

Those activists that promoted David Cunliffe as leader will, however, be disappointed their high hopes for his leadership appear to have been dashed.

David Cunliffe.

David Cunliffe. Photo: RNZ

Labour is well short of the strong vote Mr Cunliffe's supporters believed he could deliver.

Yet Labour might still form a Government, depending on the final vote, with the help of the Green and New Zealand First parties.

That is the National Party's dilemma.

Even though its polling remains strong and Labour is in the doldrums it knows this election is still likely to be close, very close.

The arithmetic of MMP means National, even though it will win more votes than any other single party, cannot take it for granted it will get a third term in government.

Look at the lead-up to the 2011 election.

Winston Peters - may be kingmaker

Winston Peters - may be kingmaker Photo: RNZ / Diego Opatowski

For much of the three years before that election National consistently recorded support well above 50 percent.

Yet, on election day National's party vote was 47.31 percent. While it was an historically high vote under MMP it fell well short of the party's polling suport before the election.

In the lead-up to this year's election National's support has hovered in the mid-to-late 40s. If, as at the last election, its actual vote falls short of its poll results National might best hope for a party vote of about 44 percent.

It means it will be more reliant on its allies but none of them are doing well enough to suggest they might be able to help National remain in power. That leaves New Zealand First. In the end it could be Winston Peters who decides whether John Key or David Cunliffe is Prime Minister after 20 September.

Before then voters face the prospect of being confused by claim and counter-claim about the state of the Government's books.

John Key.

John Key. Photo: RNZ / Chris Bramwell

In a pre-Budget speech this week John Key has reiterated the Government is not about to loosen its purse strings, although he confirmed its previously announced intention to allocate an extra $1 billion for new spending.

He took the opportunity to chastise Labour for its record in government, saying its spending had got out of control. Mr Key says in Labour's last five years in government spending had increased on average $2.7 billion a year while National had increased spending just $250 million a year.

Since 2009, however, core public spending increased from $64 billion to $70.3 billion in 2013 - a $6 billion increase in four to five years.

Right and wrong

Labour's finance spokesperson David Parker, incensed at Mr Key's attack on his party's financial record, accused National of being worse and mismanaging its finances.

Both are right and both are wrong.

Spending did go up under Labour but at the same time it still ran large surpluses. Much of that was used to repay debt which meant the National-led Government was in a strong financial position to respond to the impact of the global financial crisis. National gives Labour little credit for that but had those surpluses not been banked the Government and country would have faced a more difficult time getting through the crisis.

In turn Mr Parker has criticised National for borrowing more heavily which has increased the Government's net debt to $60 billion, up from $10 billion in 2008.

What, though, would have Labour done? Would it have cut, rather than freeze, spending in order to keep debt down?

National's tax cuts - and earlier tax cuts by Labour - reduced the Government's income and helped push up debt, but to have kept debt down at 2008 levels would have required savage spending cuts.

These attacks are a diversion from the real debate.

Instead of attacking one another's fiscal records the two parties should recognise they have both been responsible with public money for the past 20 years or more.

Where they differ is on how people should be taxed and where their money should be spent.

Voters deserve to hear that debate free of the politicking and rhetoric around bogus arguments about fiscal responsibility.