If voters swallow John Key's line that a vote for Labour is a
vote for higher interest rates, they will swallow anything
the prime minister puts in front of them.
And if they do not, Mr Key's less-than-subtle scare campaign
on interest rates suggests he will ram it down their throats.
Mortgage interest rates are perhaps the most sensitive of all
hip-pocket issues. And they are going up during National's
watch. Mr Key's recurring nightmare would be to wake up the
day after the election having lost by a handful of votes,
prompting two words which would haunt him for the rest of his
life - ''if only'', as in ''if only I had done this or done
There will be no ''if-onlys'' when it comes to interest
rates. Mr Key is out to at least neutralise the issue.
No doubt fuelled in part by National's focus group research
of voter fears of what will happen to the cost of borrowing
under a Labour-Greens coalition, Mr Key rounded on the major
opposition party in a brazen bid to spread the blame for the
current increases by predicting Labour's addition to
government spending would result in even bigger hikes.
Labour's profligate spending would overstimulate the economy
and ramp up inflationary pressures. Those pressures in turn
would force the Reserve Bank to hike rates by well above the
two percentage points already foreshadowed over the next two
Labour could have bet the ranch that sooner or later National
would dust off its old ''tax and spend'' refrain to remind
voters of Labour's spending binge at the tail end of the
Clark government. It is the only evidence available to Mr Key
to press his case.
What was surprising - given the Prime Minister's political
acumen - was just how ponderous and muddled the attack on
Labour turned out to be.
Maybe it was a deliberate attempt to muddy the waters. For
example, he absolved National of responsibility by arguing
that the current sequence of small increases in the official
cash rate simply illustrated the renewed strength of the
economy under National.
Not only was Mr Key claiming victory when interest rates went
down, but also when they went up.
This was not Mr Key's finest hour. But when this prime
minister is (rarely) misfiring there is usually an
explanation which is not immediately obvious.
Wind the clock back a few months and you might have heard
Finance Minister Bill English talking about how - with the
economy now on course for solid and sustained growth - the
politics of recession had been supplanted by the politics of
It was a statement of the obvious - but not so obvious that
many people picked up on it.
Mr English had realised the whole ball game had changed - and
not necessarily to National's advantage. With the Treasury
forecasting a return to surplus, political parties suddenly
had options again.
They could spend more, tax less or pay off debt - or a
mixture of all three. The first surplus in 2014-15 will be
small, but will start to bulk up in following years.
This will not be carte blanche for another Labour spend-up.
David Cunliffe has said Labour will run surpluses so many
times that his credibility now hangs on it. Labour will
explain how once it has factored in Treasury's forecasts and
projections for things like tax revenue.
What must worry Mr Key is that Labour has become well-versed
in making a little go a long way.
With its ''baby bonus'' plan, Labour got the headlines
(though not necessarily ones they wanted). By then delaying
the programme's introduction, Labour can argue it is sticking
to the fiscal straight and narrow.
What the prime minister was really trying to do this week was
to fit Labour into a fiscal straightjacket.
To do this, Mr Key sought advice from the Treasury as to what
level of new spending the economy could absorb before it
started to overheat. Mr Key would not reveal the actual
figure. While it was obviously higher than the $1 billion
National has set aside for new spending in the Budget, he let
it be known it was not that much higher.
Labour is hardly going to model such a garment. It is instead
trying to shift the debate on economic management down to a
personal level rather than having abstract arguments about
arcane budgetary matters.
Labour's strategy involves getting people to ignore the
statistical evidence of National's success in moving beyond
the politics of recession and instead question whether they
are benefiting from the recovery - and if they ever will
It is trying to weave a ''narrative'' which prompts voters to
ask themselves whether New Zealand can still claim to be an
egalitarian society and whether they are worried if it is
Labour knows, however, that it must capture minds as well as
hearts. Labour is thus appealing to more base instincts by
getting people to ask themselves another, more direct
question: do you believe you are getting your fair share?
It is a clever question because - bar the wealthy - no-one is
going to answer such a question with an emphatic ''yes''.
The ''fair share'' theme is very much part of the story which
seeks to isolate National from the great bulk of voters -
those on middle incomes downwards - by highlighting things
like National's tax cuts and the machinations surrounding the
SkyCity national convention centre as National helping only
its supposed ''rich mates''.
This narrative has yet to strike a chord with voters,
That may be down to there being a major difference between
this coming election and previous ones.
For the first time in a very long time, the New Zealand
economy looks like it will enjoy solid and sustainable growth
for some time.
The placid mood of the electorate nationwide - and National's
continued high opinion poll ratings - are a reflection of the
current optimism that New Zealand has finally turned a very
It is a mood which is the harbinger of one of the most
dangerous forces in politics - rising public expectations of
what politicians can and must deliver.
That has yet to happen. The public still has its fingers
crossed that this time the recovery really is real.
- John Armstrong is The New Zealand Herald political