Editorial: Final thoughts on issues that matter most

Tomorrow, voters must deliver their own judgment in the solitude of the polling booth. What the Herald has sought to do this election is to aid understanding of what is at stake by providing information on, and appraisal of, policy.

Our investigations suggest the issues that interest or worry people revolve around tax, the economy, "handouts" to Maori, student loans, and leadership and management. We suspect that when all the transient nonsense of the campaign is put to rest today, these issues will decide the election. We have had our say on them as parties released their policies and the campaign developed. It may be worth reprising our views.

On taxation

Labour has extended tax relief through its Working for Families package to 60,000 more families, bringing to 350,000 the number who will benefit. Yet there are many struggling lower-income and a fair number of middle-income earners who do not have children, or at least children of dependent age, who will not benefit at all.

National puts the cost of its tax reductions at $3.9 billion when fully in force. That is more than twice the amount Labour has allowed for in its family package. Not all of National's figure is likely to come from Budget surpluses. Some of it will depend on savings in government spending and borrowing.

Not long ago National's priority was to reduce the corporate tax rate to a level competitive with Australia, and to do away with the top personal rate, 39 per cent, needlessly introduced by the present Government. Now it has decided that it may not be able to reduce the company rate to 30 per cent until 2008, and the best it can do about the top personal rate is to raise the threshold to $100,000 on income in 2007.

Labour's "tax credits" are welfare payments in all but name. The money is collected from pay packets and returned, much like any other welfare entitlement, to those alert enough to know they qualify for it. The mechanism needlessly turns self-respecting income-earners into applicants for state support.

There is no point pocketing National's tax cut if it comes at cost to the services that contribute to personal health and safety. It is never a good idea to accept tax cuts from politicians who have not yet cut their cloth accordingly. Tax cuts are the easy side of the equation; spending cuts carry a cost to political popularity.

But tax cuts can also contribute to the country's welfare. No government should take more than it strictly needs out of national income if the economy is to operate at maximum value.

On the economy

Labour has presided over six years of quite remarkable uninterrupted growth. The prosperity has been built on the reforms of the previous 15 years but any government that presides over such a sustained expansion is doing something right. Labour has increased spending, largely putting the increase into state service payrolls but also into infrastructural improvements. And it has done so while running big Budget surpluses.

National proposes to let official debt levels rise again, ending an era of steady effort to reduce the public debt. With more borrowing, additional public spending and leaving more after-tax income in private pockets, National offers a considerable economic stimulus.

The concern remains that if the predictions of an economic slowdown are wrong - again - National would be politically committed to cuts that would be inflationary, prompting the Reserve Bank to offset the lower tax with high interest rates. National's leader, a former governor of the bank, knows the risks well.

On race relations

Imposing a deadline on treaty settlements is likely to be an ultimately self-defeating exercise. National, which once promised to settle all outstanding grievances by the year 2000, now wants claims to be filed by next year and all settlements completed by 2010. Labour, formerly opposed to any time limits, wants all claims lodged by 2008, so that its timetable for all settlements by 2020 can be met. Both parties are imposing unnecessary and unfair pressure and compromising the chance of arriving at durable settlements.

National has also promised to abolish the Maori seats, at the very time those seats seem about to provide distinctive and assertive, as well as necessary, representation for the first time. There is no public clamour for their urgent removal and multi-party consensus should be sought on such an issue.

On student loan relief

Cynicism and desperation abound in equal measure in Labour's $300 million-a-year pledge to abolish interest on student loans. Only four months ago New Zealanders were told that despite a higher than expected surplus of $7.4 billion, economic circumstances did not permit the lavishness of across-the-board tax cuts.

National has pledged to make interest payments on student loan tax deductible at a cost of $70 million a year. This would help, but the problem is much overstated. The average student owes about $15,000, and it is taking graduates an average of 9 1/2 years to repay their loans. The vast majority seem to be handling their debt very well.

On leadership and management

Dr Brash's campaign has had to survive a litany of mistakes and tactical errors. Too often, the National leader was found wanting on policy detail, and failed to foresee problems.

Helen Clark has also failed to inspire. In large part, this was the result of a Labour strategy based on negativity, rather than one emphasising the strong points of its six years in office and its plans for a third term.

Policies ought to leave voters with visions of each party's intentions for the country. A governing party cannot afford to rest its case entirely on the status quo, no matter how prosperous its record, for the status quo never continues. If Labour continues in power, it will probably be in partnership with the Greens. That is a prospect voters need to consider.

Labour deserves credit for six years of sustained prosperity, high employment and healthy public accounts. Yet public unease continues over some of its social policies.

National is promising a substantial payback in private incomes and an expanded public debt, a significant change. There are national effects as well as personal gains to consider.

An abrasive campaign, with an acutely divided electorate, probably presages a period of abrasive politics.

Who, and in what combination, will best take the country forward is now for you to decide.