Heather Roy's Diary
The Political Situation

There is an adage that elections that change governments tend to be vicious.

That is looking like a distinct possibility in the run up to this election. Expect the gutters to run with blood over the next few months.

The Labour party spin machine has been so efficient that the Labour front bench have begun to regard themselves as minor deities. They have been shaken by last week's NBR poll, which showed National edging ahead, and New Zealand First holding the balance of power. This all sounds like a repeat of 1996 when Winston came third and had the privilege of deciding if Helen Clark or Jim Bolger would become Prime Minister. The Labour party, New Zealand First and National promptly voted themselves $500,000 to cover the costs of "coalition negotiations" and began some intense haggling. After weeks of uncertainty, Winston declared for National and promptly began one of the most unsuccessful coalitions of all time.

There are many myths and pieces of disinformation about the coalition negotiations, mostly emanating from the Labour party. Labour disinformation has it that National was prepared to concede more to New Zealand First and so Labour ended up in opposition from 1996 to 1999 on a point of principle.

Others say that Labour was prepared to match anything that National offered. My own feeling as to why Winston opted for National was that New Zealand First and Labour did not have a clear majority between them and would have required support from the Alliance. During the election that was how most people thought things would stack up. An Alliance/ Labour/New Zealand First coalition was dubbed the "gloom gang" by Jim Bolger and was seen as an anti-National grouping. However to get this group into government would have required Helen Clark and Winston Peters to jointly approach Jim Anderton. Winston was not about to admit that another star shone as brightly in the firmament as his and he opted for National.

Under the coalition agreement Winston Peters became Treasurer and during his time in that position New Zealand went through a steep recession. In his post as Treasurer Winston had some difficult situations to deal with. The economies of several East Asian countries melted down freezing exports, there was a drought and he could not see eye to eye with the Governor of the Reserve Bank. But other countries thrived and Australia managed 5% growth in production in 1997, while New Zealand went backwards. In the late 1990s, New Zealand was the only English speaking country that wasn't booming. The irony of it all was that New Zealand suffered a heavy migration loss as overseas opportunities beckoned and young New Zealanders went overseas in their droves. It was ironic because Winston had ridden to power on, you guessed it, an anti- immigration ticket.

Both Winston Peters and Helen Clark correctly diagnosed that by the late 1990s New Zealand had reform fatigue and introduced policies that involved protecting the status quo and increasing public spending. The problem is that situation cannot continue forever. Public spending has been rising much faster than the total economy has been growing and as those of us who are in opposition never tire of pointing out, much of the spending is of low quality. Public spending simply cannot rise faster than the general economy forever.

The situation for ACT

Recent polling suggests the battle is shaping up with Labour and the Greens on one side and New Zealand First and National on the other. This is not the two horse race the big parties have been trying to predict. Neither Labour nor National can govern alone and the election result will be determined by the votes won by the smaller parties. Winston will not announce with whom he would form a coalition until after the vote but many voters will find the above choices unpalatable and they will be looking for an alternative.

ACT understands that there is a mood for change and we have spent our years in opposition developing a plan to effect a change in the direction the country is moving. New Zealanders had expected tax relief in the 19 May budget - instead we got economic policy that will result in more bureaucracy. ACT's plan is to cut tax to 25% for those earning above $38,000 and 15% for those on less. Safer streets, education standards with international recognition, first class healthcare and a crack down on welfare abuse are all part of the plan. ACT is the only party that will stand firm on these issues, issues that National talks about but can't be trusted to enact on their own.

Those who clearly remember the 1996-1999 period do not want to see a situation whereby Winston Peters has a monopoly on the balance of power. One way to make sure this doesn't happen is to give your party vote to ACT.

ENDS

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