Editorial: Time for serious reflection

To universal relief, the election campaign enters its final week. It is clearly to the relief of the leaders, who have followed punishing schedules of public appearances, publicity stunts and the daily ping-pong of accusations, explanations and clarifications as they try to stay up with the latest barbs and embarrassments of their opponents. The public comes to the final week no less weary of the mud-slinging and madness. But there is a constructive side to the fatigue that always arrives at this point in a campaign. With the finishing post in sight the public and politicians seem to get real and focused, put the nonsense aside and concentrate on what really matters.

What really matters, of course, is the social and economic welfare of the country. Ultimately everybody's personal welfare depends on that. There is no point in pocketing a tax cut if it comes at a cost to the police and other social services that contribute to personal health and safety. But tax cuts can also contribute to the social and economic welfare of the country. No government should take more than it strictly needs out of its national income if its economy is to operate at maximum value. Taxation has to be competitive with that of other countries to ensure we keep enough of our brightest and most energetic people.

The National Party's tax package was the central issue at the beginning of this campaign and it is likely to be the central issue again if attention takes its usual serious turn in the final stretch. Attention should also be drawn to what the package contains. Its most important element is probably the new attitude it brings to debt management. National proposes to let official debt levels rise again, ending an era in which economic reformers worked to steadily reduce the government debt. National's finance spokesman, John Key, clearly believes the country has become too averse to borrowing for public investment and that now is the time to move into expansive mode. Debt was too high, he told the Herald's "Mood of the Boardroom" breakfast last week, when state spending exceeded its income. "That dragon has been slain," he said.

With more borrowing, additional public spending and more income left in the private pockets, National's package offers a considerable economic stimulus. And the first impact would be felt next year when, on present predictions, the economy will grow at a slower rate. The concern remains, of course, that if the predictions of a slowdown are wrong - again - National would be politically committed to cuts that would be inflationary in those circumstances. Voters need to consider the risks as well as the personal and social gains.

The race could hardly be closer, on the evidence of the latest Herald-DigiPoll survey. The campaign has clarified the coalition possibilities, if not the important policies. The decisions of New Zealand First and United Future to talk first with the winning major party have effectively set up a two-horse race to the winning post. Minor parties are going to be squeezed as voters do their utmost to ensure their preferred main party is first past the post.

After six years of sustained economic growth, the Labour Government must wonder why this is such a close race. It has not helped itself by belated offers to students with tertiary loans and modest income earners with dependants. Most of them were probably voting Labour all along. The largess has only undermined the Government's claim to fiscal rectitude and reinforced National's contention that there is ample revenue for tax cuts. Now for the run to the wire.