Brace yourself, New Zealand. You're about to get fiscally stimulated.
With the Reserve Bank Governor, economists and business groups calling for the Government to inject more fuel into our slowing economic engine, the 2020 election is shaping up to be the most generous campaign in years.
The time forausterity has passed.
Politicians across the ideological spectrum have been given the green light to loosen the shackles on the Treasury vaults.
Monetary policy is creaking at the joints. Interest rates are so low that all around the world pressure is on to spend through the current economic cycle.
It would be nice if the recovery from the global financial crisis had delivered business confidence, more investment, higher productivity and stronger wage growth.
For voters, though, this is like one of those news stories that says drinking red wine has positive health effects.
It's a win-win. We get the election treats without the guilt.
A more fiscally generous election campaign will bring into sharp focus the different flavour of the treats on offer.
The need to pump economic growth highlights the ideological gap dividing our two major parties despite their centrist approach to many aspects of government.
Will it be tax cuts or welfare?
National nailed its colours to the mast last week talking up corporate tax cuts and income bracket adjustments (which effectively means small personal tax cuts).
The National Party, under Simon Bridges, has promised less tax, less red-tape and more road building to stimulate growth. Photo / Dean Purcell
It also promised renewed investment on roading infrastructure and the slashing of red-tape.
Some commentators have suggested the policies took National in a Donald Trump-like direction.
The party's recent attack strategies on social media and its more conservative takes on cultural issues might fit that bill, but this economic strategy looks quite old-school.
It's the more fiscally expansive centre-right approach that the Employers and Manufacturers Association and Auckland Chamber of Commerce wanted National to take under Bill English.
A corporate tax cut could inject confidence back into the business community, boost investment growth, pushing up productivity, wealth creation and wages.
But it runs up against concerns about widening social inequality and will be a hard sell for National if it wants to attract voters to the left of its traditional base.
Labour is still hedging its bets on spending to stimulate.
For starters it's in government, which makes it less keen to acknowledge concerns about the economic slowdown.
But as global conditions deteriorate it will increasingly pin the need for stimulus on forces outside its control.
What we do know is that Labour has adjusted its self-imposed fiscal responsibility rules to give it more discretion around spending in its next term.
It will target a core crown debt range of 15 to 25 per cent of GDP as opposed to the current more specific 20 per cent target.
That's potentially up to $15 billion more available for new policy based on borrowing an additional 5 per cent of GDP.
Which direction will Labour go with its fiscal stimulus?
Like National it will probably look to infrastructure investment.
Infrastructure investment can boost economic growth. Waterview Connection under construction in Auckland in 2015. Photo / Nick Reed
That's every sensible economist's favourite way to spend government money.
In theory it pays for itself, as long as the economic benefits it generates are greater than the cost of borrowing - which is currently very low.
Meanwhile, it creates jobs and business growth for the contractors that feed into whatever the project is.
The flaw in the theory is that the value creation of infrastructure spending assumes governments always make sensible choices.
They have to build economically useful things and handle the construction process in a reasonably cost-efficient manner.
But let's not be overly negative.
New Zealand needs infrastructure investment so badly that it would be great to see both parties upping their game in that space.
Unfortunately, it also takes a long time to deliver.
That might not matter if we're talking about election-winning promises - but if we're actually looking at ways to stimulate the economy through the next three years, more immediate measures will be needed.
That means Labour is likely to be looking at more generous social spending.
A tax cut targeting the poorest workers (with an adjustment the lowest income bracket) might be a consideration.
But given that Labour killed the last government's proposed tax cut as soon as it took power, this seems unlikely.
It's hard to cut taxes in a way that doesn't put money in the pocket of already wealthy people.
So some form of increased welfare spending that puts money in the pockets of the most disadvantaged social groups would make more sense for Labour.
Economically it works as stimulus because poorer people are more likely to inject any income increase straight back into the economy.
Politically it leaves Labour in a similar boat as National.
It will likely be hard to sell beyond the core of its constituency.
Typically in New Zealand elections economic debate gets overshadowed by personality politics and scandalous side shows.
Perhaps that will be the case again.
But I hope not because the political choices that need to be made about economic direction right now will be historic in scope.
And, while the debate about how best to stimulate an economy appears to be far from settled, the argument for government doing something bold looks stronger than ever.
