Editorial: Stability in doubt after odd campaign

The tendency in any election is to look backwards, not forward. Voters coming to their decision consider the record of the Government as much as the promises of the campaign, especially when the governing party is promising more of the same and no other party is offering a compelling view of the future.

Yet the future has suddenly cast an ominous cloud over this election. Some fearful turbulence has struck world stockmarkets in the wake of corporate accounting scandals in the United States. The slump that loomed last year, particularly after September 11, continues to haunt major economies and could easily be triggered by a sustained slide on Wall St.

The New Zealand economy has enjoyed a charmed ride on high commodity export prices and a low dollar through the Government's first term. But even without a world downturn, our weather may be about to change. Fonterra's forecasts this week suggest that dairy farmers have banked the last cheque of the price boom and official projections of other farm incomes are no more encouraging. The dollar, meanwhile, has risen sharply in recent months, though it fell abruptly yesterday, possibly from election jitters.

If financial speculators are asking themselves how well the likely winner of our election will face the challenges ahead, voters should be asking the same question. Labour has had a cautious, fiscally responsible first term but in the campaign there have been disturbing hints that it wants to give the Reserve Bank a looser inflation target when it appoints a permanent replacement for Don Brash.

It seems untroubled to learn that inflation has already eroded wages to a degree that real incomes rose by less in its first term than they did under National. Labour's constituency, particularly public sector employees, have largely restrained their expectations through the first term. The teachers' action during the election campaign could be the portent of a dam about to burst.

The campaign has been a peculiar one, and not because the election result seemed predictable. The last election, when this Government displaced a three-term National Administration, was equally predictable. So was the 1990 election, when the previous Labour Government fell, and the election before that, when it was returned for a second term. If this campaign has felt different the reason is probably that for first time in perhaps 25 years contentment reigns.

The Government has convinced most people the country has no further need of unpleasant economic reform, and in some respects, notably state services, Labour has put things in reverse. National, which is still associated with the last phase of the reforms, has preferred to campaign on more popular issues. So has Act. Both concentrated on crime and treaty issues - although Winston Peters had those, and immigration, in his three-fingered thrust.

Crime, the treaty industry and immigration are all subjects of genuine concern to many people but the country's harmony and development are unlikely to be advanced by calling a halt to treaty settlements or cutting immigration to a sub-replacement level. It may be that harsher sentences could deter some violent crime but any party that aims to "fix it" would need far more than punitive policies. Child welfare, family stability, education, employment and a closer watch on the mentally ill would all come into a serious discussion of the subject.

Serious discussion is hard to arrange in an election campaign. In the absence of that sort of debate between the main parties, it fell to Labour and the Greens to wrestle over a decision that could crucially affect the country's future course. The Greens' non-negotiable demand for a continued moratorium on modified gene releases has been the most potent issue of the campaign.

It so poisoned relations between the prospective centre-left partners that a coalition now looks unlikely. The "contaminated" corn book cast the Prime Minister's campaign into a humourless mood for a week or two, causing Labour's polls to drop rapidly and with them its hopes of returning with a majority in its own right. The Greens suffered likewise. As their polls dropped, undecided voters turned with interest to Peter Dunne. So did Helen Clark, making it apparent she would find it easier to "do business" with him to her right than the Greens to her left.

On the results of our poll today Labour, with Jim Anderton's Progressive Coalition and Mr Dunne's United Future, would probably be short of a majority of seats and relying on the Greens or NZ First to govern. Conversely, National, NZ First, Act and United Future would also be short of 50 per cent. On those figures, a centre-left government would be the only possibility and it would be a shaky one.

Labour has fulfilled its few promises, restored much-needed trust in politics, maintained most of the essential reforms and promoted ideas of economic improvement, albeit lacking urgency. But it requires a reliable partner besides Mr Anderton, and preferably only one. A government surviving from vote to vote on the whim of two or more mutually antagonistic parties is not a recipe for stability and good decisions let alone bold ones. The campaign has been a test of how prospective partners might work together and the lessons are salutary. Use the lessons well.

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