KEY POINTS:
You can feel the political ground moving towards the Government. The Labour Party is having its election year party congress this weekend. Despite the party having a truly terrible start to the year, I think it has found its footing. It started in recent weeks when Helen Clark and Michael Cullen went on the offensive against John Key and landed real blows. Key and National wilted under Labour's attacks.
Key's inexperience is starting to come through. He can't think on his feet and appears lost when he is put on the spot. His stumbling over Maori seat policy and the Auckland Airport sale options was embarrassing. Key's likeability and National's political strategy not to scare middle New Zealand with hard-right dogma has worked a charm until now.
The Act party argument that the Key-led National Party is really just Labour-Lite is true. But National is so desperate to not alienate anybody that when a decision to pick a side is required, its dithering makes it look evasive. The spectacle this week of senior National MPs Lockwood Smith and Maurice Williamson fleeing reporters like frightened rabbits rather than answering questions about their denial over global warming must have had National's spin doctors cringing.
In contrast, Labour is getting on with election-year politics. That is, using our tax surpluses to distribute good news and largesse before election day. Two weeks ago it raised minimum wages by 75 cents to $12 an hour, as promised. This is on top of two similar increases during this term. It has followed it through to most 16- and 17-year-olds, resulting in students working part-time earning up to $4 more an hour than they were three years ago. Labour also increased student allowances, superannuation and other benefit payments by 3.8 per cent. That's a higher lift than most employers are paying their workforces.
Some employers who initially moaned about having to contribute 1 per cent of their workers' KiwiSaver from April 1 have been sweetened with a $20-a-week tax credit. I have always had major doubts about this scheme. After all, it is effectively privatising superannuation. But if you do join KiwiSaver it is a good deal to you personally, and half a million Kiwis now signed up makes it a political winner. National won't dare attack it, even if it is eating up millions it wanted for tax cuts.
To neutralise employers, Labour has also given them a 10 per cent cut to business tax. This means many employers will pay less tax on their profits than their workers pay on their wage packet. I can't remember Labour getting a vote of thanks from the business community for granting employers such a large tax reduction. But then the employer groups have always been ungrateful sods.
But there was one tax reduction I approve heartily of which has gone relatively unnoticed. That's a tax rebate for redundancy payments. It's always traumatic when a business makes their workers redundant but from now the poor workers losing their jobs get a 6 per cent tax rebate on their redundancy compensation. I understand that Peter Dunne was influential on this, and needs thanking.
Workers in New Zealand have had a pretty good month when we take into account increases to family support and paid parental leave, as well as the announcement a couple of weeks ago that meal and rest breaks will become law. None of this would have happened had Labour not been in Government.
If Clark and her party get the credit for these benefits, they should be able to win back a large number of workers who have drifted to National. But if Labour can regain its working-class constituency it should get back more than 40 per cent of the vote, which should be enough to pull off a fourth term. In fact, if National doesn't get 46 per cent, I think it is toast. Labour has the Green Party, which will surely get back, making the two blocs on that scenario equal.
The irony is that the return of Roger Douglas to Act makes it harder for National. Any vote Act gets will come off National, making the gap between the two major parties smaller. But it's worse than that for National. Act has given Labour a wonderful tool to frighten its wayward supporters back into its camp.
Douglas thinks his only mistake was limiting himself to hard-right economic reforms and not going far enough. If he gets back into cabinet, he'll take his knife to social programmes, health and education.
I can see Labour's campaign now. If you vote National, you get Rogernomics - Part II. The higher the vote for Act, the better for Labour.
If Labour continues to deliver to its working-class constituency, it may well win. Obviously, National can't offer a big tax cut if Labour has already given it away. The Government's Free Trade Agreement with China won't harm it much. Any traditional left opponents to the deal are likely to vote Green anyway, adding to the centre-left total numbers.
So the Labour Party faithful who turned up to Wellington this weekend should have been pretty confident they were in with a chance for a fourth term, despite the earlier long odds.
