The debate was at times heated, as the leaders traversed topics from poverty, tax policy including tax cuts, the Canterbury recovery and Nicky Hager's book Dirty Politics.
The Prime Minister took aim at Labour's tax policy, asking repeatedly: "Tell me this: if I own a house in a trust, do I pay a capital gains tax on it?"
John Key claimed that 300,000 homes in family trusts would be caught by Labour's capital gains tax (CGT), because they were owned by a trust.
In a moment reminiscent of the "show me the money" incident in a leaders' debate before the 2011 election, where then-Labour leader Phil Goff was caught out not knowing policy details, Mr Cunliffe avoided the question and tried to turn attention to Mr Key's position on GST.
After the debate, Mr Key said a CGT on the family home was a "shocking revelation", and said a tax practitioner had told him the 300,000 figure.
Mr Cunliffe said he did not answer the question in the debate because he wanted to check his facts.
"A family home does not incur a capital gains tax, whether it's owned by a trust or not. I thought it better to check that one before answering. John Key got it wrong. The fine legal niceties of a CGT will be worked through by a panel of experts ... but of course those details aren't appropriate for a free-flowing, fast debate like that."
The discussion became tense when it turned to the Canterbury rebuild. At one point Mr Cunliffe called Mr Key a "school-yard larrikin" in response to his repeated interjections of "whatever".
Mr Cunliffe criticised the inquiry into Judith Collins' conduct as being so narrow that it would be a "joke".
Mr Key responded by taking a swipe at the "three or four" staffers in Mr Cunliffe's office that write in the left-wing blogosphere.
"It's a known fact that Jason Ede in my office talked to a blogger. There are people in your office who have written on blogs. It happens on your side and you know it."
Mr Key condemned Whale Oil blogger Cameron Slater for allegedly running a smear campaign against the Serious Fraud Office, and confirmed that the blogger's emails will form part of an inquiry into Judith Collins' conduct.
And he hinted that his plan for tax cuts for low to middle income-earners, to be announced next week, would not be more than $30 a week.
"Even if it's a small amount, we want to reward New Zealanders for working hard, whether it's $10 or $20 or $30 bucks [a week], it adds up to $500 or $1000 for an individual or a couple [a year]."
The leaders also discussed different approaches to lifting people out of poverty. Mr Cunliffe pointed to government assistance, including Labour's Best Start payment for parents, while Mr Key said employment was the best path out of poverty.
Mr Cunliffe retorted: "There are 100,000 children growing up below the poverty line where parents are working. It's not just about work."
Mr Key said the minimum wage promises from Labour and the Greens would cost jobs.
"You want to send 16,500 people to the dole queue, David."
- By Derek Cheng of the New Zealand Herald
