Fran O'Sullivan: Worm that really rules our lives

Let's get this election on to the one thing that really matters: The Worm.

No. Not just the television worm - the device loaded up by a bunch of voters still making up their minds which way to vote - that last week catapulted United Future's Peter Dunne into becoming a force to be reckoned with.

As Dunne's extraordinary showing in the snap Herald-DigiPoll survey of 500 voters published today makes clear, thanks to that TV worm his views now matter. United Future's policies will get some examination this week.

But the worm that matters in the long run, is the worm that has turned, economic growth.

This election campaign has been focused on sideshows - Nicky Hager's GM corn ambush, Bill English's Fight for Life, Winston Peters' Three Fingers, Richard Prebble's Zero Tolerance, Helen Clark's Paintergate, Peter Dunne's Worm - all of which have made for gripping television.

But all their political promises count for nix in the long run if the economy is not growing strongly.

Late last week, major forecasters such as Deutsche Bank lowered their growth outlooks.

Inevitably this was lost in the smorgasbord of spin masquerading as substance that has dominated the campaign.

Instead of humming along at twice the growth rate of our 14 major trading partners, New Zealand is now into a pronounced slowdown.

Economic growth is forecast to drop from 4 per cent for this first half of this year to around 2 per cent by late next year.

The growth worm, which enabled business to get by despite some frankly unfriendly policies during the Labour-Alliance coalition Government's first term, has dug back into its tunnel.

Also going are the low exchange rates which enabled our exporters to prosper and the high commodity prices, particularly for dairy.

Forecasters are predicting that other key factors which have supported the economy over the past year, such as strong net migration and low interest rates, will either reverse or become less supportive.

Only world growth was expected to go against the trend, although the collapsing Dow - which fell in every session but one in the past two weeks, erasing 14 per cent of its value - has raised doubts as the outlook for US profits remains low.

In this environment, Business New Zealand last week tried to make growth an election issue.

The country's biggest business organisation invited political leaders to put forward their economic policies at a one-day seminar in Wellington.

As the Business Herald outlines today in its analysis of Business New Zealand's scorecard of the political parties' election policies, only two of those parties - Act and National - could be seen as strongly pro-business.

The right-of-centre parties have policies which businesses believe are necessary for them to generate investment, employment and wealth.

Labour's Michael Cullen won respect as a fiscal strongman at the seminar.

But his party's economic policies do not lay the path for growth rates at the 4 per cent plus rates to which he aspires. Even New Zealand First scores as more business friendly than Labour on the scorecard.

Businesses might take some comfort from United Future's third place. If Labour does have to get into bed with another smaller party, United Future might offer a business-friendly alternative.

Or would Labour opt to keep the peace with Alliance leader Laila Harre who, like Dunne, has played a deft role in television debates and elevated her profile?

United Future offers a business-friendly focus. The Alliance does not.

It has become a commonplace to talk about New Zealand's ambition to get back into the top half of the OECD. All the leaders sign up to it.

But unless we get sufficient growth and can boast per capita incomes to ultimately match those of Australia, New Zealand will not be able to afford the education and health policies that its citizens want.

Cullen's critics claim he plans to "inflate his way to growth" by reinventing the Reserve Bank's role to become a growth facilitator rather than inflation inhibiter.

Many in business would heave a sigh of relief in this score.

There was concern that under Don Brash's reign, the focus was too single-minded.

But that modification alone will not redress the dead weight of Labour's failure to put forward business-friendly policies.

Unfortunately for business, the parties which do have the ability to do this lack the leadership, the focus or the sales skills to succeed.

National's policies are business friendly. This country's wealth generators believe they would spur vital economic growth. But its support base has fallen through the floor during the campaign.



National boasts two of the country's reigning PR queens - president Michelle Boag and communications director Tina Symmans - but it has been out-foxed and out-gunned by the parties with less obvious firepower, the Greens and New Zealand First.

Fronting leader Bill English as the family man complete with adoring wife and children (TV actors not his own) hanging on his every word, might work to differentiate him from the childless Helen Clark if National had six months to brand him.

But a six-week campaign requires a party to get on song from the start with a smart strategy - such as Act's tax cuts for all workers.

Labour had a head start - it called the election, after all. The Greens and NZ First have been opportunistic, but the Greens peaked too early.

Late last week, National realised it was losing vital business support to Act, and television advertisements featuring former Reserve Bank Governor Don Brash talking about growth policies began to appear.

More importantly, Brash's explanation on why growth was important had an impact.

Using the patient, calm approach with which he once drilled into a nation the importance of taming inflation, Brash explained the social benefits a strongly growing economy might bring.

But his tagline: "That's why I'm supporting Bill English ... " was a dead turn-off.

National could also have made strong inroads if it had fronted list candidate Allan Peachey on the teachers' strike and education issues.

As principal of New Zealand's largest secondary school, Rangitoto College, Peachey has admirable credentials.

Likewise, activist Guy Salmon could have been better used to attack the Green vote.

Act has made good progress. It may not get an electorate seat, but it will continue taking support from National to retain a strong presence in the next Parliament.

This week is the last chance to get the debate back firmly onto the nation's future.

Labour is on the attack. Its weekend advertisements were designed to knock the Greens and NZ First back down the popularity ratings.

But there is still time to put the focus back on Labour and ask why its scorecard ranking is so low and what the party will do to rectify it.

The stakes at this election are too high for government to be treated as a spectator sport.

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