Helen Clark on the campaign trail

Helen Clark is ready to defend her Prime Ministerial title. Picture / Amos Chapple

Helen Clark happily mingles outside on the deck with the blue-collar smokers of a Carterton paua factory, trying hard not to appear disapproving. After a spread of savouries, sandwiches and paua patties in the staffroom for afternoon tea, the Prime Minister talks to the 40 or so staff about election issues.

With no more than nine weeks to go until election day, she set a pace this week on the campaign trail for her Labour team. Four points behind National means the fight of their lives and every visit counts.

At the paua factory, she drops her usually excellent Maori pronunciation, and she talks about "bucks" instead of dollars.

She takes questions on rest homes, hate speech and the two hours it took for one man to get through to Inland Revenue.

There are no questions about tax cuts. Clark made sure of that by front-footing the issue that has dogged the Government since the chewing-gum Budget, so-called because the best the low-paid will get is 67c a week in three years.

She won't be saying anything about tax cuts, she tells her audience, because Labour is not offering them. It is offering "tax relief" to low and middle-income families.

It is the same line she used at the public meeting a couple of hours earlier.

This is Labour's new post-Budget tactic, to promote Steve Maharey's Working for Families as tax relief.

It's not that Working for Families is not tax relief - large parts of the $1.1 billion conglomeration of allowances and tax credits are. But in all the millions that have been spent publicising the package since it was unveiled in last year's Budget it has never, until now, been promoted as tax relief. But Labour has had to find a way to attack the backlash from the Budget.

The election is inextricably linked to the Budget: what Michael Cullen had planned as a proud legacy - the workplace savings scheme - and an election-winning Budget suddenly became a potential election-losing Budget.

It means Labour has to campaign harder to be in the game. It has tested Labour's famous self-belief in another way: if the party's leadership could cock-up in such an unforeseen way over the Budget, perhaps it could do so over the campaign too.

Within Labour, Clark emerged from the Budget in better shape than Cullen.

In her frequent forays around the country this year her political antennae detected some disquiet in the electorate over tax, well before the post-Budget polls.

Fairly late in the Budget process she argued that Labour had to address it in the Budget. It was not instantly embraced in the heart of a party that had nailed its anti-tax cuts colours firmly to the mast over the past five years. But, after some debate, Clark won the day. Then the question was how to address it.

It was Cullen's initiative to offer an increase in tax thresholds as a way through - a move that could be argued primarily on grounds of fairness, avoiding ideology, as well as putting a few bob more in people's pockets.

To also index the thresholds against inflation was a major policy concession by any finance minister. But with the decision made, Cullen gave no regard to how meagre the figures might be received or how it might be presented politically.

The figures were a surprise, even to some ministers. The result pleased no one.

Cullen has publicly accepted responsibility - he could do little else - his fallibility humiliatingly exposed.

Suggestions by insiders that the Budget tested the relationship between him and Clark are vehemently denied by Cullen and there are certainly no outward signs of it.

So pivotal is the Clark-Cullen pairing to the success of the fifth Labour-led Government that neither would let it get beyond good working order.

And both served in a previous Government that was mortally damaged when the leader-Finance Minister relationship broke down.

Colleagues report that Cullen is over the rough-Budget blues. He is firing away on the campaign trail too, happily convinced that tax will continue to recede in its importance in voters' minds.

(The words "tax threshold" are as commonly used now as "Closing the Gaps", so bitter is the memory for Labour.)

Cullen's challenge is to keep his own tax policy off the agenda, but to talk-up National's yet-to-be revealed tax cuts to inflate expectations that Labour hopes cannot be met.

Earlier this year, Labour was relying on the inexperience of National leader Don Brash to help it into a third term. Brash's success since the Budget shattered that confidence.

Labour is regaining it, buoyed by Brash's slip-ups - thinking aloud about cutting GST is the latest example - and fundraising efforts by Labour President Mike Williams.

On Wednesday in Auckland, he had five appointments with business contributors who last election gave the party $40,000 in total. This week he bagged $120,000.
Labour is also buoyed by Clark's class act on the hustings, where she is at her humble best.

"You don't ask for a third term lightly," she tells the paua-shell workers. "Your work's never done in this business. There's always more things to do."