Election 2014

Voters go to polls with clear choice

9:26 am on 25 November 2011

[25 November 2011]

Voters will go to the polls on Saturday with a clear choice between the two major parties and their likely allies.

In an unusual campaign both the National and Labour parties have promised policies many voters oppose or at least have serious doubts about.

In National's case, it intends selling up to 49% stakes in Meridian Energy, Genesis Energy, Mighty River Power and Solid Energy, as well as selling more of its shareholding in Air New Zealand. Repeated polls confirm most New Zealanders oppose the idea of partial privatisation.

On the other hand, Labour is promising to make KiwiSaver compulsory, gradually raise the age of entitlement to New Zealand Superannuation to 67 and introduce a capital gains tax. None are popular policies.

But Labour leader Phil Goff says they represent tough decisions which need to be made for the future.

Mr Goff has repeatedly argued throughout the campaign his party is looking beyond the next three year term and he has acknowledged there is a risk voters will not like what they are being offered.

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National's leader John Key's main argument is that only his party can provide the stable government needed to get the country through the next three years of international economic uncertainty and instability. His dominant economic focus is on getting the Government's books back into surplus by 2014-15 and bringing public debt under control.

Labour too intends getting the public finances back into surplus in the same year although it will borrow more than National over the next few years, mainly because it will not be banking the proceeds from asset sales.

Mr Goff has also faced criticism over just how much the capital gains tax will earn in its first few years and he did himself few favours when he initially could not remember how much it would raise.

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But equally National's estimate that its partial privatisation will raise $5 - $7 billion is also uncertain. The Treasury says it is also not clear how much it will cost to sell the shareholdings or what impact it will have on future dividends.

Mr Key says the money will go into building news schools, hospitals and other infrastructure and that the State assets will become more efficient and innovative once partially privatised.

Labour remains implacably opposed to asset sales and that opposition has played a large part in its campaign. But it has done nothing to shift public sentiment about the parties in the opinion polls.

Nor has Labour's policies to remove the goods and services tax (GST) on fresh fruit and vegetables, make the first $5000 of income tax free, raise the minimum wage to $15 an hour and extend the in-work tax credit to beneficiaries.

All those policies are aimed at helping alleviate poverty.

Mr Key's response is that removing GST on fresh fruit and vegetables will make the tax system more complicated; making the first $5000 of income tax free will cost too much; raising the minimum wage will dissuade firms from taking workers on; and extending the tax credit to beneficiaries will encourage them to stay on benefits rather than look for work.

He defends National's record on poverty, saying it had not slashed Working for Families tax credits or benefits during tough economic times. And he says welfare reforms, which include requiring single mothers to take up part-time work when their youngest child turns six, will help.

Here, as on asset sales, there is a clear dividing line between the two major parties.

Support arrangements

It is also on the matter of poverty that likely government support arrangements emerge most clearly.

On National's side it broadly has support from the ACT and United Future parties for its approach.

Labour policies fit more comfortably with the Green, Mana, Maori and New Zealand First parties.

But what will the Maori Party do? Apart from providing $137 million for whanau ora, National will not adopt the other policies the Maori Party believes would help the poor.

So will the Maori Party tie itself to a government which opponents, including Mana, accuse of using punitive tactics against beneficiaries? And in the past three years, despite Mr Key's talk of a growing underclass before the 2008 election, life for those in hardship has got worse.

Mr Key says the crucial step is to get people off benefit and into jobs.

But critics argue that in meantime beneficiaries need more help. Social service providers say while successive governments refuse to address the issue it is the children of poor families - whether they are working or beneficiary families - who suffer the most.

Referendum

The parties are also split over the referendum on the electoral system.

Initially John Key, as Prime Minister, promised not to influence the referendum, refusing to give his personal opinion on whether he favoured retaining MMP. But within the last week or two he's come out strongly against MMP and added his voice to the Vote for Change lobby group.

Mr Key favours the Supplementary Member (SM) system, under which 90 electorate seats are elected by first-past-the-post and just 30 list seats are elected proportionally.

Under that system a party which won 10% of the party vote would get just three seats not 12 as it does under MMP. SM would return power to the two major parties.

Ironically Phil Goff, who has been described by rightwing commentators as yesterday's man, is an advocate of MMP. So too are the Mana, Green, Maori and New Zealand First Parties.

But will Mr Key's overwhelming popularity, which might carry National to an historic vote on Saturday night, also convince New Zealanders to dump an electoral system which has made the Parliament more representative and the Government more accountable?

Will they trust Mr Key enough to give him absolute power?