The seven strangest things in the NZ election twilight zone

Viewed from afar, New Zealand's election campaign and the possible outcome may seem downright bizarre.

Incredibly, a stable centre-right government led by a popular Prime Minister that is presiding over a fast-growing economy, with falling unemployment, may yet fail to win re-election for a third term.

"New Zealand's voters, media and politicians have been in some… policy-free twilight zone, dominated by the bizarre, the inconsequential and the downright dirty."
Bernard Hickey, Publisher at Hive News

Opinion polls show John Key's National-led Government faces a near-hung Parliament and may need support from other smaller, Clive Palmer-style parties to return to power after the September 20 election.

A distinctly different set of policies offered by the centre-right and centre-left parties were barely debated.

The choices included whether to impose a capital gains tax, whether to introduce higher income tax rates, whether to introduce compulsory superannuation, and whether to change monetary policy. There were plenty of real policy differences to chew over.

Instead, New Zealand's voters, media and politicians have been in some sort of alternative universe – a policy-free twilight zone, dominated by the bizarre, the inconsequential and the downright dirty.

Here's the catalogue of the unexpected from New Zealand's election campaign:

1. Two maverick conservative politicians who want to ban foreign residents from buying land and houses may hold the balance of power in a hung parliament.

2. Winston Peters, a cannier and wrinklier version of Palmer with a knack for appealing to New Zealand's elderly isolationists, leads the New Zealand First Party. Opinion polls show his support is sitting comfortably above the 5 per cent threshold needed to win seats in New Zealand's parliament under its Mixed Member Proportional (MMP) system of proportional representation.

3. Colin Craig, a skinnier and more earnest version of Palmer, who questions the moon landings and believes in chemtrails, could drag his Conservative Party into Parliament and demand a ban on foreign buying in a coalition with John Key. His main claim to fame is his opposition to a law banning the smacking of children.

4. There's an outside chance a German Internet millionaire facing extradition to the United States by the FBI on criminal copyright theft charges could nudge a Labour-Green coalition into power. Kim Dotcom spent more than $NZ3 million creating an Internet Party that joined up with the Maori nationalist Mana Party. On current polling it could get two or three MPs under the byzantine rules of MMP, which would be enough in a tight result to decide who wins. Dotcom's express aim is to bring down John Key's Government.

5. An anonymous hacker called 'Rawshark' using a twitter account called 'Whaledump' and a blogger called 'Whale Oil Beef Hooked' have dominated the headlines and indirectly forced the resignation of a potential successor to Key, Justice Minister Judith Collins. Hacked emails from the blogger, the National-party aligned Cameron Slater, appeared to show Collins campaigning to discredit her own Serious Fraud Office director, forcing her to resign.

6. A book written by an avowedly left-wing activist journalist called 'Dirty Politics' detailed Slater's connections to Collins and a staffer in Key's office. The allegations, vehemently denied as a left-wing smear campaign by Key, are that Slater worked with Key's office to coordinate a dirty tricks campaign against the Opposition Labour Party. A publishing sensation, 'Dirty Tricks' has sparked two official inquiries and embarrassed various National Party figures. It was based on Rawshark's hacked documents and gripped the nation for weeks with details of expletive-laden rants, hunts for prostitute-using politicians and a series of vendettas against media and politicians of all colours.

7. John Key's own personal popularity has been affected by the 'Dirty Politics' controversy, given he has acknowledged talking to Cameron Slater regularly and his 9th floor office in the Beehive is implicated in the tactics revealed in 'Dirty Politics'. New Zealand politics has never seen its like.

Contentious, fevered, dirty

The 2014 election campaign is widely viewed as the most contentious, fevered and 'dirty' in New Zealand's political history. 

It could also be one of the closest, with opinion polls showing National sitting on around 48 per cent support going into the last week, while the centre-left Labour-Green block have 40 per cent between them (Labour on 27 per cent and Green on 13 per cent).

That leaves New Zealand First and Conservative, who have combined support of around 10 per cent, holding the balance of power, even if only one of them makes it over the 5 per cent threshold.

The National Party can also count on smaller parties with about 3 per cent of the MPs, but it would be tight. A wafer-thin majority would also leave little room for National to carry out planned reforms of resource management laws to increase house building and to change employment laws.

Most expect New Zealand First's Peters would support a National Government, although he would be expected to extract some concessions on foreign buying of assets and a register of foreign land ownership.

Peters himself has been cagey about which side he would side with, except to say he would talk to National first. His policies actually have a lot more in common with the Labour-Green side.

So there remains the potential for a change of Government and a massive change of policies that would affect businesses on both sides of the Tasman.

A Labour-Green coalition Government would introduce a 15 per cent capital gains tax on all assets beyond the family home, introduce a new 36 per cent top personal tax rate and trust tax rate (on top of the current 33 per cent top rate) and widen the Reserve Bank's targets beyond inflation to include employment and the currency.

It would also ban foreign buying of land and houses, introduce a state-owned single buyer of wholesale electricity and tighten water quality standards to restrict the growth of dairying.

Labour is planning to build 100,000 houses to sell on to first home buyers within 10 years, while the Green Party is also planning to fund an unspecified number of new homes in a rent-to-buy scheme. Those are the policies they have broadly in common.

If elected in its own right, Labour would turn the current opt-out KiwiSaver scheme into a compulsory one and would raise the age of eligibility for the current state-funded universal New Zealand Superannuation scheme to 67 from 65 between 2020 and 2026. The Green Party doesn't favour these policies, making them less likely.

Green policies not supported by Labour include a carbon tax to fund a cut in the corporate tax rate and a higher 40 per cent income tax and trust tax rate.

Overall, there's no shortage of policy choice or financial implications. Not that an observer from the planet Mars or even across the Tasman would have known it.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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