John Armstrong: One step too far for Cullen

What Michael Cullen thought he was doing, on Tuesday evening, with his apparent threat to pull a piece of tax legislation in retaliation for the Herald's coverage of Labour's pledge card rort is difficult to fathom.

It looked like a case of the morning after the night before.

Cullen realised he had gone too far. The Finance Minister issued a fresh statement on Wednesday morning denying his earlier remarks meant he had intended withdrawing the retrospective legislation, which is of financial benefit to the Herald's owners.

However, the tone of the initial statement was not so easily swept under the carpet.

Not only had Cullen done Labour no favours by pouring more petrol on the already raging conflagration over election advertising, but the implication that he might retaliate over a newspaper's criticism of retrospective legislation validating unlawful spending on such advertising took Labour into territory last inhabited by Sir Robert Muldoon.

That Cullen pulled back so quickly is evidence - if it was really needed - that he is no Muldoon.

Nor is he the Robert Mugabe-like figure which Don Brash sought to paint him.

That over-the-top comparison somewhat detracted from the point Brash was making - that Labour had now stooped to intimidate opponents into silence by highlighting their tax affairs; that, as with taxpayers' funding of its pledge card, Labour was now in the habit of using the machinery of the state for its own ends.

To be generous to Cullen, he seemed seized by a desire to highlight that the Herald was denouncing one piece of retrospective legislation while quietly supporting the passage through Parliament of another.

However, Cullen's statement was not written in haste. The wording left the threat hanging in the air.

Neither is this the first time that he has accused the media of being venal.

Following the Budget, he claimed senior press gallery journalists were pushing a tax cut agenda because they personally wanted them.

The latest confrontation also follows an incident in Parliament a couple of weeks ago when National was putting the heat on Immigration Minister David Cunliffe over the representations made by Mangere MP Phillip Field to ministers on the visa applications of would-be migrants.

Out of the blue, Cunliffe suddenly started talking about the representations made by National's Wayne Mapp, who last year sought approval for work permits for three overstayers who ran a Thai restaurant in his electorate.

Cunliffe concluded by saying he trusted that Mapp had never accepted "even as much as a morsel of food or drink in that establishment without paying the full price".

It is most unusual for a minister to publicise the representations made by another MP in a constituency capacity - especially for such naked political purpose.

The sporadic nature of these incidents does not suggest Labour is embarked on some "dirty tricks" campaign.

However, they do fit a pattern of behaviour that has seen Labour becoming tougher and more uncompromising.

The hardening of attitude is most evident in Labour's refusal to show any contrition for the pledge card rort, while showing no qualms in flailing the Auditor-General for his finding that Labour's spending was unlawful.

Such stubbornness would seem to be counter-productive. However, Labour believes it can get away with it.

The Prime Minister said as much when she was asked this week why Labour's poll rating had not been damaged by the damning contents of the Ingram report on Field, given last week's One News-Colmar Brunton poll had 62 per cent of respondents agreeing Labour had not handled things very well.

She cited "Beltway" politics. The Beltway is the road which encircles Washington DC. Inside the Beltway live the politicians, bureaucrats, lobbyists and media who feed on the minutiae of day-to-day politics.

Beyond the Beltway, the rest of the population simply get on with their lives.

Clark is correct. The fixations of those inside the Wellington Beltway - Field, David Benson-Pope and tennis balls, David Parker's resignation, Winston Peters' perverse behaviour in Washington, and so on - do not resonate very much beyond the Beltway.

Outside the Beltway, Labour is holding its own.

Labour's rolling average in polls since the last election has been consistently between 40 and 42 per cent - higher than the party registered when it came to power in 1999.

Whether deserved or not, Labour gets huge credit for "managing" the economy successfully, even in the current slowdown.

It is getting the pay-off from pumping hundreds of millions of dollars into the suburbs through Working for Families, alongside rates rebates and abolishing interest charges on student loans.

When the Government has been found wanting - the Auckland power crisis, for example - the Prime Minister has ordered ministers to fix it - and pronto.

Inside the Beltway, however, Labour is finding life is far from comfortable. The limitations of minority Government are now much greater.

National is making things difficult - though not by as much as it should.

Parliament sits again next week and National will hammer Labour over the findings in the Auditor-General's draft report on election spending. Neither is National finished with Field.

With its back far more to the wall than last term, Labour will naturally be more aggressive.

It is not willing to concede anything to National. It knows the next election will be as close and as difficult as the last one, if not

more so.

However, the comfort zone of Beltway politics allows Labour to treat the small nuisances - like Field - in expedient fashion as long as it gets the big things - like the economy - right.

Labour has the additional advantage that the Prime Minister is heavily in credit with the electorate when it comes to all-round management, competence and credibility.

Just look at her preferred prime minister ratings, which remain extraordinarily high for someone in her seventh year in Premier House.

She would have judged it worth cashing in some of that credit to keep Field in the Labour tent. She will likely do so if different circumstances so require.

For National, the lessons are obvious. However successful in winning battles inside the Beltway, it has to start winning the bigger arguments outside.

Since last year's election, only one thing comes to mind where National holds the upper hand - hospital waiting lists.

The other lesson is that Labour will not do the decent thing and quietly expire in the fashion expected of third-term governments.

Knowing it will have to fight even harder to hang on to power, Labour is already showing it has fewer scruples about how it goes about doing so.